Since an accountant deals with money, that coming in and that coming out, the borrowed, the credited, the owed and the paid, it’s not much of a stretch to realize that they also deal with bankruptcy. While we may know people who have declared bankruptcy or been in that position ourselves, some still may not know exactly what it is.
Bankruptcy is a legal process that is governed by federal laws and statutes and deals with the debts of an insolvent company or person being liquidated after being satisfied by the debtor’s assets, if there were any left of course. once that entity comes out of bankruptcy, they are set to start over, build their credit again and basically start over.
The bottom line. This is a saying that we hear a lot, day to day. But in accounting terms, the bottom line is actually the last line of a financial statement. It shows the net income and loss for whatever period the statement spans. Now we know.
Capital gains and expenditures are in the news a lot as well. What are they, exactly? Well, a capital gain is a part of the total gain that has been recognized on a sale of a non-inventory asset. This part of the total gain isn’t taxed as regular income,hence its name. A capital expenditure then is the paying of money to acquire or improve capital assets. The phrase you need money to make money comes to mind when talking about capital expenditures and gains.
What is a carry over? A carry over is a provision of the tax law that allows current losses or certain tax credits be utilized in tax returns of future periods. That is, you can keep some of those losses for another tax year instead of putting them all in the year they are obtained.
Much like the bottom line, a closing entry is just like it suggests–it is the last journal entry at the end of an account period. The closing entry is the end and then a new accounting period can begin. The closing entry will clear balances of temporary accounts and summarize things like expenses and revenue.
Accountants have to deal with much more than just money coming and going from a business. They are an integral part of any company and people that you just can’t run a business without. From accounts to taxes, they do it all.