When must a company announce earnings?

July 7, 2024 No Comments

A: The Securities & Exchange Commission (SEC) requires companies to file earnings reports no later than 45 days after the end of their first three quarters, and their quarterly and annual reports 90 days after their fiscal year end. Companies file quarterly earnings reports on

When should I use depreciation expense instead of accumulated depreciation?

July 7, 2024 No Comments

A: The most basic difference between depreciation expense and accumulated depreciation lies in the fact that one appears as an expense on the income statement, and the other is a contra asset reported on the balance sheet. Both pertain to the “wearing out” of equipment,

When should I use seasonally adjusted data from the consumer price index (CPI)?

July 7, 2024 No Comments

A: The Consumer Price Index (CPI) is the most widely used metric for consumer inflation changes over time and utilizes data based on consumer buying habits from a broad sample set of the population. Published each month by the Bureau of Labor Statistics (BLS), the

Where can I find fiscal year data for publicly traded corporations?

July 7, 2024 No Comments

A: Publicly traded corporations are required by law to publish their fiscal-year data to the public. The Securities and Exchange Commission, or SEC, regulates the securities markets, including securities exchanges, mutual funds and public company financial reporting. The SEC has established the Electronic Data Gathering

Which financial ratio best reflects capital structure?

July 7, 2024 No Comments

A: When analyzing the financial health and growth potential of a company, business owners and investors look to financial ratios that indicate how a company is funded and how effectively those dollars are being used. In ratio analysis, the debt to equity ratio is widely

When and why does goodwill impairment occur?

July 7, 2024 No Comments

A: Goodwill impairment occurs when a company decides to pay more than book value for the acquisition of an asset, and then the value of that asset declines. The difference between the amount that the company paid for the asset and the book value of

When and why were GAAP first established?

July 7, 2024 No Comments

A: Following the stock market crash of 1929, the U.S. government sought ways to regulate the practices of publicly traded companies and other major market participants. Authority to set standards on accounting practices was granted to the Securities and Exchange Commission (SEC). The SEC decided

When are expenses and revenues counted in accrual accounting?

July 7, 2024 No Comments

A: Under the accrual basis of accounting, revenues and expenses are counted when they are earned. This is different from the cash basis of accounting, where they are reported whenever cash actually flows in and out of the business. Most accountants consider the accrual accounting

When can you trade the stocks in the Dow Jones Industrial Average (DJIA)?

July 7, 2024 No Comments

A: The Dow Jones Industrial Average is an index that shows the average price of 30 large, publicly traded U.S. companies across many sectors. The index represents the performance of its constituents and is often used by investors and the media to portray an overall

When do you use installment sales method vs. the cost recovery method?

July 7, 2024 No Comments

A: There are four primary methods that accountants use to recognize business sales revenue: percentage of completion, completed contract, cost recovery and installment sales. In some circumstances, complications in a transaction make it uncertain as to how much revenue from a particular sale is collectible

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