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Sum of the years’ digits depreciation is another accelerated depreciation method. It doesn’t depreciate an asset quite as quickly as double declining balance depreciation, but it does it quicker than straight-line depreciation. Depreciation expense is recorded on the income statement as an expense or debit, reducing net income. Accumulated depreciation is recorded in a contra…

The choice of cash collection method depends on factors such as the nature of the business, the preferences of customers, and the need for convenience, security, and cost-effectiveness. Many businesses use a combination of these methods to cater to a wider range of customer preferences. Adding up the expected collections from each aging bucket will…

Construction in progress, or most commonly known as CIP, is a fixed asset account with a natural debit balance. At such times, it is better to switch to more advanced software and accounting methods like construction in progress accounting to ensure your business doesn’t lose its grip on finances. Once the asset is fully executed,…