Fixed Asset Records

Your fixed asset purchases are an important part of business for a number of reasons. They are capital investments, which show how you’ve invested profits back into the company. That is part of the reason why they are listed on your balance sheet and not as an expense. The other reason is because they have an expected life of more than one year. Because they will be providing benefits to the company over a longer period of time, the expensing of their value is spread out over the useful life of the asset. We do this by recording depreciation expense for each of your assets.
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Income Statement Breakdown (Part 1): Revenue

Your business’ most basic numbers are revenue, expenses and profit and most people just pay attention to those. That might work at a basic level but “revenue minus expenses equals profit” is too simple. Business owners need to know how various expenses impact their business. In this 4-part series, we’ll break open the income statement so you can see how different elements work together and what each one means to you.

The first part of the income statement is the Revenue section. This is all the money that comes into your business. Gross Sales is counted here (which is all the money you get paid) and returns and discounts are taken off. At the end of this section is Net Sales.

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Don’t Believe the Fixed Cost Lie

Everyone loves to quote fixed costs when trying to get investors to invest or when trying to predict potential profitability. That’s because fixed costs seem nice and predictable. Since they aren’t impacted by customer fluctuations, they make for easy calculation. Unfortunately, many costs that we called “fixed” aren’t actually fixed.

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