Capitalize: What It Is and What It Means When a Cost Is Capitalized

The matching principle states that expenses should be recorded for the period incurred regardless of when payment (e.g., cash) is made. Recognizing expenses in the period incurred allows businesses to identify amounts spent to generate revenue. For assets that are immediately consumed, this process is simple and sensible. Items that

Cash flow: What’s the difference between the direct vs indirect method?

In short, the direct method is helpful when you need to make it easy for other people—like investors and stakeholders—to understand your cash flow. Accrual method accounting recognizes revenue when earned, not when cash is received. If you’re reporting month-on-month, a $30,000 sale closing at the end of the month

Cash flow: What’s the difference between the direct vs indirect method?

In short, the direct method is helpful when you need to make it easy for other people—like investors and stakeholders—to understand your cash flow. Accrual method accounting recognizes revenue when earned, not when cash is received. If you’re reporting month-on-month, a $30,000 sale closing at the end of the month