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Is there a perfect age for getting Life Insurance?

Ahuja Sahil
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Is there a perfect age for getting Life Insurance?

With life insurance, timing is everything. Many people may be unsure about when to consider getting cover or whether to buy a certain age. But is there an ideal age to get life insurance?

 

What is the best age to get Life Insurance?

There is no perfect age for getting life insurance coverage, as it depends on individual circumstances and needs.

It can be recommended to apply for cover when you have dependents or finances that your death would affect. This could include a spouse, children, mortgages, or other debts.

Getting life insurance at a younger age may be more cost-effective, as premiums tend to be lower. However, it is never too late to get life cover, and still provide financial protection for your loved ones.

 

Life Insurance in your 20s

Although life insurance is often seen as something for older people, getting cover in your 20s can be a smart move.

When you are in your 20s, you are presumed to be at your healthiest and likely to qualify for a low-cost policy. This allows you to lock in lower premiums and your loved ones’ peace of mind.

It can be a valuable form of protection if you’re getting married or are about to have children. That way, your spouse or children won’t be struggling financially if anything were to happen to you.

 

Life Insurance in your 30s

Some say 30 is the new 20. That said, many people put off getting life insurance until they reach their 30s.

At this stage in life, you may have more financial obligations – like a mortgage – that must be protected. You may also have started a career and had children. All can add additional expenses that would need to be covered by life insurance if something were to happen to you.

If you are looking to cover a mortgage, then decreasing term life insurance could be a good option. This policy decreases in value over time as you pay off your mortgage. So if you die before it’s repaid, your family may have enough money to pay off the remaining amount.

 

Life Insurance in your 40s

Your 40s are typically when people start to think seriously about securing their financial future, and this includes life insurance.

At this point, you may have more assets, such as investments or properties that need protection. That’s why it’s important to make sure you have enough life insurance to cover all your debts and obligations.

You may also want to consider critical illness cover, which provides a lump sum if you become ill with a covered condition. This can act as a replacement for income if you cannot work.

It’s also common to think about retirement. In addition, how to ensure that your loved ones will be taken care of when you no longer earn an income. This is where permanent (whole) life insurance can be helpful, as it lasts your entire life.

 

Life Insurance for over 50s

For many of us, our 50s are when we put plans into place for our retirement or eventual funeral. Even if you have yet to buy life insurance, it’s not too late to get covered.

At this point a standard policy may be more expensive, however there are still options available. Over 50s life insurance is designed specifically for people aged 50-80 years old. In most cases, acceptance is guaranteed – even if you have a pre-existing medical condition.

As a result, premiums for over 50s cover are typically higher than the average policy. With that in mind, buying cover early can avoid higher monthly costs.
Taking out cover in your 50s also gives you the chance to leave an inheritance to your loved ones. If you opt for a whole-of-life policy, it pays out when you die – even if that’s many years later.

 

How does age affect the cost of life insurance?

Age is one of the biggest factors that determine the cost of life insurance. Younger people are seen as less of a risk and, therefore, are offered more competitive premiums.

The older you are, the higher your premiums will be as you are more likely to die or develop health issues during the policy term. Importantly, buying life insurance when you are young and healthy, can be cheaper. In addition, you won’t have to worry about any medical conditions you may develop in the future.

That being said, having cover is better than no cover at all, so even if you are over 50 it’s still worth looking into the options available.

 

Benefits of getting life insurance at a young age

There are several benefits to getting life insurance at a young age. Here are some key advantages:

  • Lower premiums: Premiums for life insurance are typically based on the age and health of the insured. By getting cover at a young age, you can secure lower premiums compared to if you wait until you are older.
  • Financial protection for dependents: If you have a spouse, children, or ageing parents, they can be supported in the event of your death.
  • Financial obligations: can help cover outstanding debts and financial obligations, such as student loans, credit card debt, or a mortgage.
  • Peace of mind: Knowing that you have life insurance at a young age provides peace of mind. This way, you can go about your life without worrying about what would happen to your family if you passed away.

 

To sum up

It should be noted that there is no perfect age for getting life insurance, as individual circumstances vary. Nevertheless, it’s essential to assess your financial situation, long-term goals, and health status when considering life insurance. Get in touch with an advisor or broker to get guidance on which type of policy is best for you.

 

 

Estimated Useful Life of an Asset

Ahuja Sahil
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Definition and Meaning

The term “estimate” means to evaluate or judge the value of something roughly. When it comes to bookkeeping, there are many things to estimate, and one of those things is assets.

An asset’s estimated useful life is the duration for which it is expected to remain in productive use before it becomes outdated or completely broken. Firms use it to estimate how long the asset will be valuable to them.

Many financial statement items cannot be measured accurately because of the uncertainty of the business environment. Estimation relies on current information and historical trend analysis to make judgments. There are times when estimates are needed for provisions, valuations, inventory, depreciation, etc.

Estimated Useful Life of an Asset

 

Examples

For a better understanding of the concept, let’s look at the following examples.

Example 1 – Estimated useful life of a tangible asset

Car: Imagine you buy a brand-new car for your taxi business. You estimate that this car will be able to run smoothly and efficiently for about 10 years before it starts experiencing significant breakdowns or becomes outdated. The scrap value is estimated to be nil.

In this case, the estimated useful life of the car is 10 years. After 10 years, the car might not be as reliable or cost-effective to operate, so you might consider replacing it with a newer model.

 

Example 2 – Estimated useful life of an intangible asset

According to an agreement, ABC Ltd. registers a copyright for five years. In this case, the cost of the asset can be amortized for only five years, and it is expensed on a straight-line basis.

 

Example 3 – Estimated useful life of a ‘Land’ (exceptional case)

In the case of land, as there is no wear and tear and obsolescence, the useful life is indefinite. As a result, land is not a depreciable asset.

Related Topic – Why is Depreciation Not Charged on Land?

 

How to Determine Useful Life?

The task of determining the estimated useful life of an asset is handed over to the Managers or Accounting Committee (if any) or the Senior officers.

There is no standardized process or an absolute formula. Instead, it is a matter of professional judgment by considering the data available.

Points that might be considered for determining the useful life of an asset:

  1. Related Laws – Refer to the applicable tax laws for depreciation/amortization and follow the guidelines mentioned there.
  2. Manufacturer Specifications – The manufacturer may be able to provide information based on the asset’s experience with other clients.
  3. Industry Benchmarks – An industry benchmark is a performance measure or guideline set in a particular industry.
  4. Past Experience – Historical data about how long similar assets have lasted in the past within your own company can provide valuable insights. If you have records of when similar assets were purchased and when they needed to be replaced or repaired, you can use this information to make a more accurate estimate of the useful life of an asset.

Related Topic – Difference Between Asset and Inventory

 

Useful Life and Depreciation

Depreciation: The useful life of an asset is closely related to depreciation. It refers to the gradual decrease in the value of an asset over its estimated useful life. Wear and tear, obsolescence and changes in market conditions reduce an asset’s value as it ages. When the useful life of an asset ends, it becomes fully depreciated.

The estimated useful life of an asset is a key component in calculating depreciation. Assets with longer useful lives will have lower annual depreciation expenses, while assets with shorter useful lives will have higher depreciation expenses.

Matching Principle: Depreciation aligns with the accounting principle of matching expenses with revenues. As an asset contributes to generating revenue over its useful life, its cost is gradually matched with the related revenues in the income statement.

Overall, depreciation is built upon the understanding of an asset’s useful life. It guides how the asset’s cost will be spread over time to accurately reflect its diminishing value. It is crucial for businesses to understand this concept so that they can plan for replacements, upgrades, and financial reporting.

Related Topic – How to Calculate the Scrap Value of an Asset?

 

Change in Estimated Useful Life

An estimate is a prediction based on circumstantial evidence, but due to the dynamic business environment, things might change. These modifications can be due to changes in external factors like the economic environment, laws, technology, etc.

Changes can also be due to internal factors like the company’s change in vision, change in policy, manufacturing process, etc.

For example, if a piece of machinery was initially estimated to have a useful life of 10 years, but after a year of use, it becomes clear that it will remain operational for only 5 more years, the estimated useful life has reduced.

In addition, this change may affect how depreciation is calculated and the depreciation method. It may potentially extend the depreciation period.

Related Topic – Fixed Assets Ratio

 

Factors Affecting the Useful Life of an Asset

An asset’s useful life may be affected by the following factors:

  1. Usage & Maintenance
  2. Environment
  3. Technological Advancements
  4. Government Policies
  5. Type of Asset, etc.

 

Impact on Income Statement

The effect of a change in the useful life of assets should be included in the determination of net profit or loss in the:

  • The period of the change, if the change affects one period only
  • The period of the change and future periods (if both are affected)

The effect of a change in an accounting estimate should be classified using the same classification in the statement of profit and loss used previously for the estimate.

This is to ensure the comparability of financial statements of different periods, the effect of a change in an accounting estimate which was previously included in the profit or loss from ordinary activities is included in that component of net profit or loss.

 

Disclosure Requirements 

The nature and amount of a change in an accounting estimate which has a material effect in the current period or which is expected to have a material effect in subsequent periods should be disclosed. If it is impractical to quantify the amount, this fact should also be disclosed.

Related Topic – Calculate Depreciation Rate Percentage from Depreciation Amount

 

How to extend the useful life of an asset?

  1. Repair & Maintenance
  2. Machine Operator Training
  3. Following User Manuals & Guidelines
  4. Buying the right asset in the first place
  5. Using Original Spare Parts, etc.

 

>Read Quiz on Accounting Principles and Concepts

 

Foreign Exchange as an Asset Class

Ahuja Sahil
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0

As financial landscapes change, asset classes have undergone considerable transformation. While traditional asset classes like stocks, bonds, and real estate have served as cornerstones of investment portfolios for decades, thanks to digital technology and global markets’ expansion, new asset classes with distinct risk/return characteristics have emerged.

One such asset class that has gained considerable traction among sophisticated investors is the Foreign Exchange Market, or Forex, as it’s commonly referred to.

 

Forex as an Asset Class

Forex was traditionally considered an asset class used for international trade and investment. However, in recent years, it has evolved into an asset class, offering unique benefits to investors. Today the Forex market boasts a daily trading volume exceeding $6 trillion and operates 24/7 to provide investors with unmatched flexibility and potential profit gains.

Blue Chart Forex

 

Capturing Forex Market With Metatrader 5

Effective Forex traders require reliable trading platforms with advanced analytical features, real-time data feeds, and user-friendly user interfaces. MetaTrader 5 stands out among multi-asset platforms by offering advanced analytical features, real-time feeds, and mobile trading capabilities that enable traders to make informed decisions quickly while efficiently placing trades.

Metatrader is widely considered the go-to choice. It features technical analysis tools, automated trading systems, and mobile trading capabilities, giving traders all they need for informed trade execution and efficient decision-making.

 

How Does Forex Differ From Other Markets?

As an asset class, Forex boasts several distinct qualities that set it apart from more conventional asset classes. First is high leverage — Forex allows investors to control large positions with relatively minimal capital.

Second, it offers opportunities to profit from both rising and falling markets by trading currency pairs. Finally, the Forex market’s sheer size and decentralization make it less susceptible to manipulation by market manipulators.

 

Forex and the Digital Revolution

The digital revolution has had the biggest influence on the rise of Forex as an asset class. Online trading platforms have broadened access to currency trading globally. Fintech innovations enhance the trading experience by providing sophisticated tools for market analysis, risk management, and trade execution.

These innovations shape the future of Forex trading, making it more accessible, efficient, and transparent.

White chart forex

 

Impact of Economic Policies on the Foreign Exchange Market

The Foreign Exchange Market is intimately tied to countries’ economic policies. Central bank policies related to interest rates and money supply enormously affect currency values. For example, an increase in interest rates tends to strengthen the market and attract foreign capital.

Similarly, fiscal policies like government spending or taxes can affect economic growth or inflation, thus shaping forex trading trends and making informed trading decisions easier for traders. Understanding economic dynamics like these is vital to traders, as it allows them to anticipate currency movements more accurately while making smart trading decisions.

 

Forex and Geopolitical Events

Geopolitical events — ranging from elections and policy changes to conflicts, natural disasters, and trade disputes — can profoundly affect the Forex market. Such events can alter an economy’s outlook, shifting currency values accordingly.

Political unrest can weaken an individual country’s currency due to increased uncertainty. At the same time, developments such as resolving trade disputes may strengthen it. So, keeping track of geopolitical affairs is integral to Forex trading.

 

Technical Analysis in Forex Trading

Technical analysis — or the study of price patterns and trends — is widely employed in Forex trading and is based on the premise that history tends to repeat itself. Price movements follow specific trends that traders can identify using charting tools and indicators.

Technical analysis provides traders with a systematic approach to trading while complementing fundamental analysis, which looks more deeply into economic aspects.

 

Risk Management in Forex Trading

 

Risk management is crucial in Forex trading due to its inherent volatility and leverage. Risk management can take the form of setting trading limits, using stop-loss orders, diversifying trading strategies to limit potential losses, maintaining a disciplined approach, and monitoring market conditions continuously.

Although potential returns could be high, traders should remain mindful of any associated risks within their risk tolerance threshold levels when trading forex.

 

The emergence of Algorithmic Forex Trading Systems

Algorithmic trading — using computer programs to automate trading decisions — has quickly gained prominence in the Forex market. Based on predefined parameters, algorithms allow for fast analysis, trade execution, and risk management beyond human abilities.

While algorithmic trading offers numerous advantages — including speed, efficiency, and reduced emotional bias — it requires extensive knowledge of programming and financial markets to operate successfully. As technology progresses, algorithmic trading will likely become a more prevalent feature of Forex market operations.

 

Conclusion

Forex offers investors endless potential, but those willing to navigate its complexity face an uphill climb to success, as they would in any investment market. Forex will continue to evolve under the influence of technology, economic developments, and ever-shifting global financial markets.

 

 

Role of Billion to Crore in Finance: Explained with Calculations

Ahuja Sahil
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0
Role of Billion to Crore in Finance: Explained with Calculations

In the world of finance, dealing with large numbers is a common occurrence. One such instance is the conversion between billion and crore. Understanding how these numbers relate to each other is crucial for accurate financial calculations and business analysis.

In this blog, we will delve into the concept of billion-to-crore conversion, exploring its significance in finance and providing practical examples to enhance your understanding.

 

What is a Billion?

A billion is a numerical term which epitomizes a numerical value of 1,000,000,000. It is frequently used in finance and different industrial sectors to quantify large sums of money.

In the context of finance, a billion represents a substantial amount that can significantly impact financial decisions and outcomes.

 

What is a Crore?

A crore, on the other hand, is a term predominantly used in the Indian numbering system. A crore represents a numerical value of 10,000,000, which is equal to 10 million.

The crore unit is widely utilized in accounting transactions and discussions in India and neighbouring countries.

 

The Relationship between Billion and Crore

Understanding the relationship between billion and crore is essential when dealing with international finance or analyzing data from different regions.

The conversion between these two units provides a standardized way of comparing financial figures.

 

Conversion Formula

To convert a value from billion to crore, the following formula can be used:

Amount in Crore = Amount in Billion × 100

By multiplying the value in billion by 100, we can obtain its equivalent in crore.

To convert a value from crore to billion, the following formula can be used:

Amount in billion = Amount crore / 100

By dividing the value in crore by 100, we can obtain its equivalent in billions.

 

Practical Applications of Billion to Crore Conversion:

The billion-to-crore conversion is particularly useful in various financial scenarios. Some important practical applications of billion-to-crore conversions in the finance sector are given below:

1. International Business (IB) Transactions:

When conducting business across different countries, converting financial figures to a common unit like crore facilitates accurate comparisons and negotiations.

2. Investment Analysis

Financial analysts often deal with data from different markets. Converting figures to a standardized unit allows for easier interpretation and evaluation of investment opportunities.

3. Economic Indicators

Converting billion-dollar economic indicators to crore can aid policymakers, economists, and researchers in analyzing data and formulating effective strategies.

Challenges in Dealing with Large Numbers

Working with large numbers can pose challenges due to their sheer magnitude. Some common difficulties include:

4. Perplexity

The human mind may struggle to comprehend the true scale and significance of numbers in the billions or crores, making it crucial to break them down into relatable contexts.

5. Burstiness

Large numbers can disrupt the flow of information if not presented in a well-structured and organized manner. Using headings, subheadings, and paragraphs helps maintain clarity and readability.

 

Tips for Accurate Financial Calculations

To ensure accuracy in financial calculations involving large numbers, consider the following tips:

1. Be Diligent

Pay attention to decimal points, commas, and units when working with large figures. Mistakes in these areas can lead to significant errors.

2. Use Technology

Leverage calculators, spreadsheets, and financial software to automate calculations and minimize human error. A billion-to-crore converter is an online source to convert numbers in billion to crores and vice versa to get accurate results.

3. Double-Check

Always review your calculations and verify the results to avoid costly mistakes.

 

The Importance of Conversion Accuracy in Finance

Accurate conversion between billion and crore is essential for reliable financial reporting, investment decisions, and economic analysis.

Even minor errors in conversion can lead to substantial discrepancies, potentially impacting business outcomes and financial stability. Here in the following, we will explore the importance of conversion accuracy in finance.

International Trading:

Companies trading internationally rely on accurate currency conversions as even a minor currency conversion error can cause a big loss for the companies creating a dispute between the traders and companies. So, it is mandatory and necessary to precise currency conversions doing imports and exports business activities across the border.

Decision Making:

Accurate conversion plays a crucial role in the finance sector during decision-making. Finance managers organize their strategies according to precise financial data. Conversion errors may lead to wrong decisions, unacceptable strategies and an incomprehensible sense of the applicability of planned strategies.

Risk Management:

Conversion accuracy keeps a core dimension worth in the finance sector to root out risk management since currency fluctuation can smash the financial status of companies while doing international transactions and can significantly impact potential assessments.

Financial Reporting:

Multinational organizations keep their branches in various countries and conduct transactions internationally. To stabilize and enhance financial statements for companies as well as to come up with a comprehensible performance picture of a company, accurate conversions are very important.

 

Calculation

Let us discuss some examples to demonstrate the conversion process.

Example 1

Suppose we have an investment portfolio worth 2.5 billion dollars. Convert this amount into crore.

Solution:

Step 1: Given data

Amount (in billion) = 2.5

Step 2: Apply the following formula to convert the given amount in crore.

Amount in Crore = Amount in Billion × 100

Step 3: Place the given value (in billions) into the formula.

Amount in Crore = 2.5 x 100 = 250

Therefore, a portfolio worth $2.5 billion is equal to 250 crore.

Example 2:

Let us consider an amount of 4753 crore that is to be paid as a national debit. Convert this amount into a billion.

Solution:

Step 1: Given data

Amount (in crore) = 4753Step 2: Apply the following formula to convert the given amount in crore.

Amount in billion = Amount crore / 100

Step 3: Place the given numerical value (in crore) into the formula.

Amount in billion = 4753 / 100 = 47.53

Therefore, an amount of 4753 crore is equal to 47.53 billion.

 

Conclusion

Understanding the conversion between billion and crore is crucial for accurate financial analysis and decision-making. By following the conversion formula and applying it to practical examples, you can confidently navigate the complexities of dealing with large numbers in the finance domain.

Remember to remain diligent, use technology wisely, and prioritize accuracy in all financial calculations.

 

 

The Role of Accounting in Business Strategy Development

Ahuja Sahil
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0
The Role of Accounting in Business Strategy Development

Business strategy forms the bedrock of any successful enterprise, outlining the path a company will take to achieve its objectives. In developing a comprehensive and effective strategy, many different aspects of a business come into play. Among these, the role of accounting is pivotal yet often overlooked.

Accounting can provide invaluable insights that guide in formulation of a robust business strategy, enhance financial decision-making, and drive organizational growth. Here, we take a closer look at the role of accounting in business strategy development.

 

Accounting: Beyond Numbers

To better appreciate the role of accounting in business strategy development, it’s essential to realize that modern accounting extends far beyond mere bookkeeping. It encompasses a range of activities, from financial reporting and performance tracking to cost management and budgeting. More importantly, it serves as the language of business, providing a clear and accurate picture of a company’s financial health and operational efficiency.

 

Strategic Accounting for Decision Making

At the heart of business strategy development is the decision-making process. Here, accounting plays an integral role by offering data-driven insights that can guide these decisions. In your business, you find that a detailed analysis of revenue streams can identify which products or services are most profitable, thereby influencing future investment decisions.

This strategic accounting approach extends to all areas of financial decision-making. For instance, when determining how to accept credit card payments, a company must consider various accounting factors. These include the transaction fees associated with different payment processors, the cash flow implications of the timing of these payments, and the potential impact on revenue recognition.

 

Budgeting and Forecasting

Accounting also plays a vital role in budgeting and forecasting, both crucial elements of strategic planning. By examining past financial data and trends, accountants can create accurate budgets and forecasts, providing a roadmap for future business activities.

These budgets can also highlight areas where costs can be controlled or reduced, freeing up resources that can be reallocated to growth initiatives. Similarly, revenue forecasts can guide sales and marketing strategies, ensuring that efforts are concentrated on the most promising opportunities.

 

Risk Management and Compliance

The strategic value of accounting is further demonstrated in risk management and compliance. Accountants can identify potential financial risks, such as cash flow issues or changing market conditions, enabling the business to develop strategies to mitigate these risks.

Moreover, by ensuring compliance with financial regulations, accounting can protect the business from legal issues and potential penalties. This not only preserves the company’s reputation but also maintains investor and stakeholder confidence, which is crucial for strategic partnerships and growth.

 

Business Performance and Reporting

Lastly, accounting’s role in measuring business performance is crucial for strategy development. Performance metrics, often portrayed through financial statements and reports, can indicate the success or failure of previous strategies and guide the development of new ones.

Regular financial reporting allows businesses to track their progress towards strategic goals, making necessary adjustments along the way. By analyzing these reports, businesses can gain insights into operational efficiency, profitability, and growth, which are key inputs for strategic planning.

 

Conclusion

The role of accounting in business strategy development is multifaceted and significant. It provides the necessary financial intelligence to inform strategic decisions, aids in budgeting and forecasting, helps manage risks, ensures compliance, and measures business performance.

Businesses that embrace the strategic potential of their accounting functions stand a better chance at sustainable success. The key lies in comprehending the intricate language of numbers and harnessing it to chart a profitable, future-proof business strategy. Indeed, in the game of strategy development, accounting is not just a scorekeeper but an invaluable player.

 

 

Meaning of Capitalized in Accounting

Ahuja Sahil
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0

Meaning & Explanation

In accountancy, capitalization means recording a cash outflow as an asset in the balance sheet. Rather than recording it as a one-time expense on the income statement in the same year as it occurred. It is depreciated (expensed) over time.

Why is capitalization done?

The logic behind this approach is the matching principle of accounting which says that the expense should be recorded in the same accounting period in which the corresponding revenue is earned.

Some long-term assets like plant & machinery, land & building, office equipment, etc., provide their benefits in more than one accounting period. The cost should also be allocated over the period of their useful life.

This is done by capitalizing the cost of such expenses by recording them as assets and later depreciating them over their estimated useful life.

 

Example

ABC Ltd. purchased a car worth 50,000. The life of the car is estimated to be 5 years.

Since the life of the car is 5 years, the cash outflow should be recorded as an asset in the balance sheet and depreciated over 5 years of its life. This is called capitalization of an asset. Treating an expense as an investment and recording it on the firm’s financial statements over time.

You could say, “We bought this expensive vehicle for the business, and we’ll keep track of its value.” This helps the firm show a more accurate picture of its long-term assets and account for the benefits derived over time.

Example to explain the meaning capitalized in accounting

The cost incurred to purchase the car = 50,000

This cash outflow of 50,000 will be capitalized and recorded on the Asset side of the balance sheet. The scrap value is assumed to be Nil.

Capitalization shown inside the balance sheet

Asset capitalized and shown in the balance sheet

 

Calculation of depreciation expense for year 1

Depreciation = (Total Cost of Asset – Scrap Value) / Estimated Useful Life

= (50,000 – 0) / 5

= 10,000 per annum

Hence, only 10,000 will be recorded in the profit and loss account as an expense.

Related Topic – What is capitalized expenditure?

 

Journal Entry for Capitalization

Continuing the above example, the following journal entries will be recorded in the books of ABC Ltd.,

At the time of incurring the expenditure (Capitalized)

Car A/C 50,000
 To Bank A/C 50,000

(Being car purchased for cash)

 

Depreciation expense for 1st year

The capitalized amount is distributed each year as depreciation.

Depreciation A/C 10,000
 To Car A/C 10,000

(Being Depreciation charged on machinery)

 

Profit & Loss A/C 10,000
 To Depreciation A/C 10,000

(Being depreciation expense transferred to Profit & Loss Account)

Note: The above two entries will be repeated in the next four years in order to record the depreciation expense each year.

Related Topic – Journal Entry for Bought Goods in Cash

 

The benefit of Capitalization

Since costs incurred on these long-term assets are generally very high, recording them as a one-time expense in profit and loss can show a distorted image of the financial performance of the company.

Recording the cost as an expense will result in huge losses in the year in which the assets are purchased and an incorrect amount of profits in the subsequent years during which the assets are used.

Conditions for capitalization

  • The cash outflow incurred must have some future economic benefits associated with it.
  • The estimated useful life of the recognized asset should be more than 1 year.

 

Capitalized Vs Expensed

Basis Capitalized Expensed
Meaning It involves capitalizing the cash outflow and expensing the cost of Long term assets over their estimated useful life Recording the cash outflows as an expense in the statement of profit and loss all at once
Effect on Profit and Loss Indirect through depreciation or amortization. Direct since the cost is directly debited to the income statement
Example Purchase of Machinery Payment of monthly salaries to employees

Related Topic – Difference Between Revenue and Profit 

 

Practice (Capitalize or Not?)

  1. Paid 8,000 to purchase stock for trade – Not Capitalized
  2. Paid 90,000 for installing solar panels with a life of 10 years – Capitalized
  3. Paid 15,000 for regular service and maintenance of the machinery – Not Capitalized
  4. Paid 40,000 for acquiring a patent with a life of 10 years – Capitalized

Note – Once an asset is capitalized, any subsequent expenditure that increases its capacity, thereby increasing its future economic benefit, should also be capitalized.

Any other expenditures on assets that are day-to-day maintenance shouldn’t be capitalized but instead should go into the profit & loss account.

Related Topic – Accounting Quiz on Capital Expense

 

Amortization Vs Capitalization

Capitalization

  • It’s when you record some costs as assets on the balance sheet instead of expenses.
  • Depreciation or amortization is applied over time as the asset’s value is used up or benefits are realized.

Amortization

  • Amortization is the process of spreading the cost of an intangible asset, such as patents, copyrights, or trademarks, over its useful life.
  • Intangible assets are amortized to match when they generate revenue and provide benefits to the company.

 

>Read Format of a Balance Sheet

 

Understanding Outsourcing Software Development Costs in 2023-2024

Ahuja Sahil
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0
Understanding Outsourcing Software Development Costs in 2023-2024

Outsourcing software development has become an increasingly popular strategy for businesses looking for cost-effective solutions and access to an international talent pool. Understanding the IT outsourcing costs is vital in making informed decisions and forging successful partnerships. In this article, we explore outsourcing software development costs in 2023-2024 by delving into key factors affecting pricing as well as offering insight to help navigate the outsourcing landscape successfully.

 

Factors That Influence IT Outsourcing Costs

Location-Based Cost Variations

One of the primary factors impacting software development outsourcing prices is the geographical location of outsourcing destinations. Labour costs differ across nations and regions, impacting the overall project budget.

North American and Western European software development rates generally tend to be higher compared with Eastern Europe, Asia, or Latin America – assess cost differentials across potential outsourcing destinations to find an economical choice that does not compromise quality.

 

Hourly Rates of Outsourcing Developers

Hourly rates play a pivotal role when it comes to estimating outsourcing software development costs. They can vary significantly depending on factors like project complexity, required skills and expertise levels, and the location of development teams; more specialized skills like AI, blockchain, or machine learning may command higher hourly rates.

Ensure you take into account both your project requirements and budget constraints when reviewing hourly rates to achieve a balance between quality and cost-effectiveness when making this evaluation.

 

Complexity and Scope of Software Development Project

The complexity and scope of a software development project have an immediate effect on outsourcing costs. Projects with complex features, advanced functionalities, or larger scopes generally take more time and resources, driving up costs significantly.

Assess the complexity of your project before communicating the requirements clearly to an outsourcing partner; discuss projected timelines and resource allocation to gain a fuller picture of associated costs.

 

Development Team Size and Composition

The size and composition of the development team involved in your project can have an effect on outsourcing costs. Larger teams require more resources and coordination efforts, which can impact the budget.

Furthermore, a composition such as a mix of senior/junior developers can have an effect – senior developers may command higher hourly rates while junior developers might prove more cost-effective; make your decision according to project requirements and budget constraints.

 

Contract Type and Duration

The type and length of the contract also have a significant effect on outsourcing software development costs. Fixed-price contracts provide clear visibility into costs from the beginning, while time and materials contracts provide flexibility but may lead to overruns if managed incorrectly.

When choosing between fixed-price contracts or time and materials contracts for your project, think about its nature, the level of uncertainty involved, the flexibility offered, and longer contracts that provide stability while possibly offering lower hourly rates as the optimal contract type – the right contract type depends entirely on both factors.

 

Vendor Reputation and Expertise

When it comes to software outsourcing costs, the reputation and expertise of an outsourcing vendor play an essential part. Established providers with established track records may charge higher rates due to their experience and quality assurance procedures; however, partnering with such vendors can bring long-term advantages such as reduced risks, better project management practices, and superior deliverables.

When assessing outsourcing costs, it is important to evaluate all these elements: portfolio reviews from clients as well as industry certifications of potential vendors.

 

Hidden or Additional Costs

When estimating outsourcing software development costs, it is critical to factor in any hidden or additional expenses that may arise during project execution.

Such expenses might include project management fees, infrastructure setup expenses, legal expenses, or travel costs related to on-site visits. Be sure to negotiate these upfront with your outsourcing vendor to prevent surprises and ensure a transparent budgeting experience.

 

Communication and Collaboration Expenses

Strong communication is integral to successful outsourcing partnerships. However, communication expenses like international phone calls, video conferencing tools, project management software licenses, or project management platform fees can significantly add up during an outsourcing partnership project. 

When selecting the tools required for collaboration or assessment of any associated costs, it is essential that these tools fit within budget; consider cost-effective communication platforms as well as scheduling regular meetings in order to optimize collaboration without incurring excessive expenses.

 

Conclusion

Knowledge of IT outsourcing costs in 2023-2024 is vital for making informed decisions and optimizing the value of outsourcing partnerships. When considering location-based cost variations, hourly rates of outsourced developers and other factors mentioned above should be taken into consideration.

 

A Deep Dive on Patriot Gold Group and Other Investment Companies

Ahuja Sahil
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A Deep Dive on Patriot Gold Group and Other Investment Companies

Nowadays, it’s not exactly unusual for us to see advertisements and social media campaigns surrounding the idea of investing. After all, during times of uncertainty (like we’re experiencing now), most of us are out there looking for ways to keep our futures secure while not putting too much of a strain on our wallets in the immediate future. How can we navigate this situation?

As you may or may not already know, there are a ton of different ways to invest. Whether you want to opt for something like stocks and bonds or you’d prefer to go with commodities and other assets, you have choices available. Curious about what some of those are and what it means to invest in them? You can check out this page for some further details before we dive in.

No matter what type of investment you’re opting for, it doesn’t hurt to learn more about it before you sink a ton of cash into it. Additionally, there are companies for pretty much all of the different fields of investment that can offer some valuable insights into how the process works. If you’re feeling stuck on any of the aspects of it, that may be a good place to start.

That all said if you’d like to get some more perspectives on how these companies operate, as well as whether or not it’s worth working with them to improve your own investment portfolio, then you’ve come to the right place. We’ll be covering all of that and more, so make sure to follow along!

 

Understanding Investing

Now, before we go any further today, let’s examine what investing is in the first place. Luckily, it’s a pretty simple concept. For the most part, it involves using our money in the moment to buy some sort of future or “stock” (whether that be literal or figurative) to hopefully generate more income down the line.

Something to keep in mind, though, is that there isn’t necessarily a guarantee that you’ll get your initial money back. That’s where some of that inherent risk comes into play, which you’ve probably heard at least mentioned at some point when learning about investing in the past. Although it may not seem like that big of a deal, it’s definitely one of the parts of investing that is the biggest “downside” to it.

Of course, with that said, there are ways to mitigate our risks, if not avoid them entirely. This largely will be based on what you decide to add to your portfolio. For instance, certain assets and commodities are less risky than others. In fact, most experts consider gold to be a fairly low-risk type of asset in general.

Groups like Bonds Online discuss this in more detail on their websites if that’s something that interests you more. For now, though, we’ll be focusing on some of the specifics of gold investing and why it’s considered in this category. After all, to understand the companies trying to sell their services related to it, we have to know the basics first!

 

Precious Metals: What are They, and How Can we Invest in them?

With the basic concept of investing out of the way, we can turn our attention to the “good stuff.” By good stuff, we mean the main meat and potatoes of today’s topic! Now, for anyone who wasn’t aware, there are several types of precious metals. They are gold, silver, palladium, and platinum.

Each has special properties that make them unique. Their high conductivity but low corrosiveness and reactivity make them quite popular in all sorts of manufacturing, beyond just the “traditional” uses for them such as jewellery and other collectables. Typically, that’s how we think of them, but this isn’t entirely correct.

Precious metals are fairly rare, which is another aspect of why they’re called that in the first place (as well as how they ended up in that classification). The rarest ones are in the platinum family, and the most common one is of course silver. Out of all of them, gold is the most popular investment.

Why is that? There are a few reasons (as you can probably expect), but it’s mostly because as an asset, it’s the most accessible while still providing good returns. Silver is easier to buy when it comes to bullion (bars), but it just isn’t as strong of a market. The prices fluctuate much more as well.

From that perspective, it’s not hard to see why so many investors gravitate towards gold. As far as what type of asset it is, it’s considered a “commodity.” Commodities are simply asset class that are raw materials used in manufacturing or other types of processes. So, they’re not a finished product (most of the time).

We can invest in them in all sorts of ways, though. Realistically speaking, we can check out pages like this one, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1023694, to get some information on the commodity side of it. Otherwise, checking out stocks and bonds for companies involved with the processing of precious metals might be the route for you to take.

 

Investment Companies

Next on the docket, we have the entire concept of investment companies. In the market for precious metals, they can serve as advisory groups as well as brokers for the metals themselves. Finding places to purchase bullion isn’t always easy otherwise. What can they do for us, then?

Setting up a gold IRA (individual retirement arrangement) is one of the biggest services. You see, that’s a specialized process that involves creating a self-directed IRA, which isn’t something that many of us specialize in. So, these companies such as the one mentioned in the title are there to assist us along the way.

Beyond just that, though, they can serve as an advisor for these sorts of circumstances. Certain times are inevitably going to be better to establish a retirement account that revolves around precious metals (usually gold) than others. Right now, we’re seeing a boom in the precious metals market.

Likely, this is because of all of the inflation that we’ve been seeing across the world. Paper currency loses value over time – that’s just kind of how it works. In contrast, platinum, gold, palladium, and silver tend not to lose nearly as much value, if they lose any. So, it’s hard to ignore the fact that they’re a type of investment that is relatively risk-free compared to stocks and bonds.

 

Are they Worth Turning to?

Even the most experienced investor can get some useful information and insider information if they decide to work with one of these groups and/or companies. That’s their purpose, really – they’re here to be an asset for all different types of investors, no matter where you are on your financial journey. No matter what, it can be a real challenge to figure out what to put your money into.

This is especially true when it comes to retirement, which is often what these sorts of companies focus on. Although we wouldn’t necessarily recommend that you sink all of your net worth into gold for your retirement years, having some in the form of bullion or an individual retirement arrangement can help mitigate any stresses that you have down the line.

Life is often unpredictable. Having a safety net is never a bad thing, in that sense. Setting that up is the hard part, especially in times like this where so many of us are strapped for cash. Investing can feel like it’s impossible, even.

If you’re feeling this way, don’t lose hope. Advisors and finance companies like these can help you figure out options that can work for you without breaking the bank. You don’t have to empty your wallet to accomplish it, either.

The important thing is that you find a company that is reputable. What might that look like, though? Being around for many years is a big one. Decades is preferable since we want experts who really know what they’re talking about.

High levels of customer satisfaction are another huge aspect that we can prioritize. No one really wants to deal with shoddy customer service or poor knowledge of the field, so check out some reviews before you decide to get an advisor or buy into a group like this. Some of the resources we’ve provided above might help with that.

 

 

Journal Entry for Cheque Received from Debtor

Ahuja Sahil
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0

Introduction

In your business, a debtor is a party that owes money to you. Imagine you run a small stationery store. When someone comes into your shop and buys something but chooses to pay later, they become your debtor. In simple terms, they have an outstanding expense to settle with you for the items they bought.

In future, they may issue a cheque to settle the dues. The term “cheque received” does not always mean the immediate receipt of money. When a business receives a cheque from a customer or another party, it represents a promise of payment.

The actual receipt of money occurs when the cheque is deposited into the bank account and the funds are cleared. Whenever debtors pay their bills via cheque, it is recorded with the help of a journal entry.

 

Received Cheque from Debtor Journal Entry

  • When the cheque is received but not deposited in the bank on the same day,
Cheque in Hand A/C Debit
 To Debtor’s A/C Credit

Modern Rules

  • Dr. the increase in ‘Assets’. It is a legal promise to pay & considered a receivable.
  • Cr. the decrease in ‘Assets’ as debtors/receivables are reduced.

Golden Rules

  • ‘Cheque in Hand’ is a Real A/c; therefore, Dr. what comes in.
  • ‘Debtor’ is a Personal A/c; therefore, Cr. the giver.

 

  • When the cheque is received and deposited in the bank on the same day,
Bank A/C Debit
 To Debtor’s A/C Credit

Modern Rules

  • Dr. the increase in ‘Assets’ as money comes into the business.
  • Cr. the decrease in ‘Assets’ as debtors/receivables are reduced.

Golden Rules

  • ‘Bank’ is a Personal A/c therefore, Dr. the receiver.
  • ‘Debtor’ is a Personal A/c therefore, Cr. the giver.

Related Topic – Debtor’s Turnover Ratio

 

Example

  • When the cheque is received but not deposited in the bank on the same day,

Example – PQR Ltd. received a cheque from Mr A for 50,000 as payment for goods sold last week. Pass the journal entry in the books of PQR Ltd.

Cheque in Hand A/c 50,000
 To Mr A’s A/c 50,000

 

  • When the cheque is received and deposited in the bank on the same day,

Example – PQR Ltd. received a cheque from Mr A for 50,000 as payment for goods sold. It was deposited in the bank on the same day.

Bank A/c 50,000
 To Mr A’s A/c 50,000

Related Topic – Journal Entry for Money Received from Debtor

 

Effect on Financial Statements

Income Statement: The cheque receipt itself does not directly impact the income statement.

Balance Sheet: Cheque-in-hand is treated as an asset for the organisation. It is shown under the heading ‘Cash and Cash Equivalents’ on the ‘Assets’ side.

Balance sheet - effect of cheque received from debtor 1Related Topic – What is the Difference Between Debtors and Creditors?

 

Honour and Dishonour of Cheque

In the scenario of receiving a cheque from a debtor, the honour or dishonour of the cheque impacts the collection of payment. The terms “honour” and “dishonour” refer to the outcome of the cheque when presented for payment.

There are various reasons which lead to the dishonour of cheques. Some of the reasons for the dishonour of cheques are insufficient balance in the drawer account, stop payment, mismatching signatures, etc.

When a cheque received from a debtor is honoured, it has an impact on the accounting records.

Cash Receipt: The amount mentioned on the cheque is considered cash received by the business. This increases the cash balance on the balance sheet.

Debtors/Accounts Receivable: The accounts receivable balance decreases by the same amount as the honoured cheque. This reflects the fact that the debtor has fulfilled their payment obligation, and the outstanding amount owed by the debtor is reduced.

Revenue Recognition: If the payment received represents payment for goods or services, the revenue associated with the sale is recognized in the income statement. This increases the revenue and ultimately impacts the net income of the business.

 

>Read Journal Entry for Cash Received

 

Journal Entry for Money Received from the Debtor

Ahuja Sahil
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0

Introduction

In your business, a debtor is a person or another business that owes money to your firm. For example, let’s say you have a small grocery shop. When someone comes into your shop and buys something but chooses to pay later, they become your debtor. They owe you money for the items they purchased.

The amount of time for debtors to pay the money varies from business to business; however, as a general rule, they have between 30 and 90 days to do so. Whenever debtors pay back their bills, it is recorded with the help of a journal entry for money received from the debtor.

Such payment might be made by the party in various ways, like cash, cheque, electronic transfer, bank drafts, etc.

 

Received Money from Debtor Journal Entry

Upon a general assumption that the money received from the debtors is via electronic transfer, the following journal entry will be passed,

Bank A/C Debit
 To Debtor’s A/C Credit

Modern Rules

  • Dr. the increase in ‘Assets’ as money comes into the business.
  • Cr. the decrease in ‘Debtors’ as receivables are reduced.

Golden Rules

  • ‘Bank’ is a Personal A/c; therefore, Dr. the receiver.
  • ‘Debtor’ is a Personal A/c; therefore, Cr. the giver.

Note: The “Cash A/c” will be debited instead of the “Bank A/c” if the money is received in cash. It is also possible to credit the “Accounts Receivable A/c” instead of the “Debtor’s A/c”.

Related Topic – Debtor Vs Creditors

 

Example

XYZ Ltd. received 80,000 from John through electronic transfer as payment for goods sold to him a month ago. Pass necessary journal entry for money received from the Debtor (XYZ Ltd.)

Journal entry for receiving money from John

Bank A/C 80,000
 To John’s A/c 80,000

Bank A/c is debited due to an increase in assets, and John’s (debtor) A/c is credited due to a decrease in receivables.

 

Effect on Accounting Equation

Assume a firm’s opening balance is [Assets at 50,000, Capital at 50,000, and Liabilities at zero]. As a result of recording journal entry for money received from the debtor, the accounting equation will be impacted as follows:

Assets = Liabilities + Capital
Opening Balance 50,000 0 50,000
Bank A/c 80,000 0 50,000
John’s A/c (Debtor) (80,000) 0 50,000
Total 50,000 0 50,000

Related Topic – Debtor’s Turnover Ratio

 

Effect on Financial Statements

Upon receiving money from debtors,

  • There would be no effect on the income statement. It represents the collection of revenue that was already recorded when the sales were made. The affected accounts are both assets.
  • The balance sheet will show a decrease in debtors and an increase in bank balance. There would be no change in the total assets.
  • The cash received from debtors is also recorded as an inflow in the operating activities section of the cash flow statement. As a result, the company’s core operations generate more cash, increasing cash flow from operating activities.

Effect of journal entry for money received from the debtor on the Balance sheet :Balance sheet showing effect of money received from debtors

Related Topic – Difference between Debt and Liability

 

Discounts & Allowances

Both discounts & allowances are a reduction in the selling price of goods or services.

Discounts are offered to customers as a percentage or fixed amount of reduction from the regular selling price. It may motivate the customer to make an early payment or buy large quantities. It is an expense for the business and is therefore debited to the Income statement.

  • Cash Discounts are given to customers for paying their invoices early. It is a reduction in the invoice amount if the customer pays within a specified period, often within a certain number of days.
  • Trade Discounts are given to customers for buying large quantities. It is a reduction in the listed price of a product or service, typically represented as a percentage.

Allowances are usually granted to customers to adjust for issues or defects with the goods or services they have purchased. Also, when a business sells goods that are of lower quality or do not meet the expected standards, it may provide allowances to the buyers as a form of compensation or adjustment.

Suppose the customer gets a damaged product; the seller may offer an allowance to make up for it. Allowances can also be given for returns and complaints. The adjusted selling price is calculated by subtracting allowances from revenue.

 

>Read Quiz on Discount and Rebates

>Read Provision for Discount on Debtors

 

Zero Balance Accounts Explained: How to Open One Online

Ahuja Sahil
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0
Zero Balance Accounts Explained: How to Open One Online

Technology has made managing finances quicker and easier, from instant transfers to tap-and-go payments. One popular innovation is zero balance savings accounts – a financial solution that provides flexibility and simplicity.

A zero-balance savings account is a bank account with no minimum monthly balance requirement. Unlike regular savings accounts that require maintaining a certain balance, a zero balance account allows you to keep your balance at zero or whatever amount works for you. You’re not tied to any minimums.

Whether you want to start saving or need a reliable emergency fund, a zero-balance savings account offers numerous benefits. Let us begin a digital banking journey that gives you power over your money without all the hassle of maintaining a minimum balance! This guide will walk you through opening a zero-balance account online, step by step.

 

Why Should You Consider Opening a Zero Balance Account?

There are many reasons to open a zero-balance account online.

Convenience: Opening a zero-balance savings account online is incredibly convenient. You can open one using your phone or your laptop. It can save you time and help avoid hassle.

Secure Access: With a zero-balance account, you can deposit or withdraw funds whenever necessary. This flexibility ensures your money is always accessible when you need it.

Interest Earned: Even though it’s a zero-balance account, you can still make interest on the money you keep there.

Emergency Fund: A zero-balance account can serve as an emergency fund. You’ll have funds for unexpected expenses or emergencies by keeping a certain amount in the account.

Modern Features: Zero-balance accounts often have up-to-date features that enhance your banking. These include mobile apps, online banking, and 24/7 customer support!

Overall, opening a zero balance account online provides simplicity, flexibility and accessibility that can benefit your finances. Additionally, another financial tool you might be interested in is a lifetime free credit card!

 

Opening a Zero-Balance Savings Account Online – Steps On Opening An Account

Now that you get the benefits of a zero-balance savings account, here are the quick and easy steps to open one online:

Step 1: Go to the bank’s official website

Visit the bank’s website or app on your phone or laptop. Go to the website page, where it shows you can open a new savings account. Click on it and enter your mobile number to get started with the process online. The bank will then send an SMS or call to verify it’s you applying for the account. This confirms only you can access the account.

 

Step 2: Gather the required documents

To open a zero-balance savings account online, you must provide some personal info and documents. The typical documents include:

  • Aadhaar Card: If you have it, you won’t require any other identity or address proof.
  • Address Proof: You will need a driver’s license or a passport to prove your address.
  • Form 16 (if needed): If you don’t have a PAN card, you can provide Form 16 from your employer to show TDS was deducted from your salary.
  • Passport Photos: Have two recent passport-sized photos ready for the application process.

 

Ensure these are ready to upload photos or scan/send copies as required during the online account opening process.

 

Step 3: Do the Video KYC verification

Many banks let you complete the process online for KYC (Know Your Customer) checks. During this step, allow the bank access to your phone’s camera, microphone and location. Then, a video call with a bank representative will confirm your identity.

During the video call:

  • Follow the representative’s instructions.
  • Show your valid ID and address proof to the camera.
  • The representative may ask you a few questions to confirm your application for the account.

The video KYC verification ensures the bank knows who they’re opening an account for in an easy and convenient online process.

 

Step 4: Login and start using your account

Once you complete the video KYC check, the bank will give you a customer ID and account number. Use those login details to access your new zero-balance savings account through the bank’s website or app.

From there, you can:

  • Transfer funds into your account
  • Make deposits
  • Withdraw money
  • Check your balance
  • Benefit from your newly created account!

You now have full access to manage your account and take advantage of the flexibility, simplicity and control a zero-balance savings account provides.

 

In conclusion, zero-balance savings accounts and lifetime free credit cards are useful financial tools that simplify your banking experience. Opening a zero balance account online provides convenience, security and flexibility, while a free credit card offers cost savings and potential rewards. Take advantage of these modern options to gain more control over your finances now!

If you also want to know, “What is a debit card?” It’s a card that allows you to access the money in your savings account to make purchases. You can access it right from your main bank account! You can consider getting a debit card, your zero balance savings account, and a free credit card to enjoy the full range of possible financial benefits. With these three tools – a zero balance account, free credit card and debit card – you’ll have a complete financial system that works only for you!

 

FAQs

What is a lifetime free credit card?

A lifetime free credit card is a credit card with no annual fee. Yet you still get all the benefits and features of a regular credit card. The “free for life” part means big savings long-term.

What is a debit card?

Did you know that a debit card connects to your bank account? It’s a convenient way to access your funds without carrying cash around. It lets you make purchases, withdraw cash from ATMs and make online payments using funds from your linked account.

Can I still earn interest on a zero-balance savings account?

Yes! Although zero-balance savings accounts are designed for no money in the account, you can still receive interest on any funds deposited. The interest rates may vary between different banks and institutions.

 

 

Bought Goods for Cash Journal Entry

Ahuja Sahil
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0

As a general accounting term, “Goods” refer to tangible products or merchandise that a business buys or manufactures for the purpose of selling to customers. These goods can include various items such as electronics, clothing, furniture, groceries, etc.

The acquisition of goods by an entity for resale to its customers is recorded as a purchase. It is shown on the debit side of a Trading A/c.

Purchase can be of two types,

Cash Purchase: The purchase of goods is considered a cash purchase if the payment is made immediately after the purchase.

Credit Purchase: When payment is made at a later date, the purchase is considered a credit purchase.

 

Journal Entry for Purchased Goods in Cash

Purchase A/c Debit
 To Cash A/c Credit

Modern Rules Applied

  • Dr. the increase in ‘Expense’ as expenditure is increased for the firm.
  • Cr. the decrease in ‘Assets’ as cash goes out of the business.

Traditional Rules

  • ‘Purchase’ is a Nominal A/c; therefore, Dr. all expenses & losses.
  • ‘Cash’ is a Real A/c; therefore, Cr. what goes out.

Related Topic – Quiz on Rules for Debit and Credit

 

EXAMPLE

ABC ltd. purchased goods worth 10,000 from ZY Motors. The company paid the total amount in cash on the date of purchase. Show the journal entry for the transaction.

Purchase A/c 10,000
 To Cash A/c 10,000

 

In the Trading Account, 10,000 purchases made in cash will be recorded as a debit.
Trading Account Showing PurchasesRelated Topic – Simple petty cash book

 

Effect on the Accounting Equation

ASSETS = CAPITAL + LIABILITIES

As per the accounting rules, this equation must always be balanced. The transaction, ‘bought goods for cash,’ affects both sides of the accounting equation.

To understand it more clearly, let us take an example.

Company XYZ Ltd. has 50,000 cash as its capital. It purchases goods from AP Ltd. worth 20,000 and pays immediately with cash. Show its effect on the accounting equation.

The company has,

  • A combination of 50,000 ‘Cash’ & 30,000 as ‘Capital’.
  • It has purchased goods worth 20,000 in cash.
Assets = Liabilities + Capital
Balance 50,000 0 50,000
Cash A/c (20,000) 0 0
Stock A/c 20,000 0 0
Total 50,000 0 50,000

 

>Read Sold Goods for Cash Journal Entry

 

Sold Goods for Cash Journal Entry

Ahuja Sahil
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0

As a general accounting term, “Sales” refers to the revenue generated by a business by selling products or services. This is the income generated by the business’s core business operations.

A firm records sales of its products or services as revenue on its financial statements. The amount of sales recorded is based on the selling price of the goods or services sold and any applicable taxes or discounts.

Sales can be of two types,

Cash Sales: When the payment for the goods sold is received immediately, it is considered cash sales. The buyer makes payment at the time of purchase of goods.

Credit Sales: When the payment for goods sold is received later, it is considered credit sales.

 

Journal Entry for Sold Goods in Cash

Cash A/C Debit
 To Sales A/C Credit

Modern Rules Applied

  • Dr. the increase in Assets as cash comes into the business.
  • Cr. the increase in Income as sales increase income.

Traditional Rules

  • ‘Cash’ is a Real A/c; therefore, Dr. what comes in.
  • ‘Sales’ is a Nominal A/c; therefore, Cr. all incomes and gains.

Related Topic – Journal Entry for Amortization

 

Example

Mr. Y  has a business of trading furniture and fittings. He sold fittings to Mr. Z for 10,000 on a cash basis. The journal entry for the above transaction will be:

Cash A/C 10,000
 To Sales A/C 10,000

(Being fittings sold for 10,000 to Mr. Z)

  • Depending on your specific business and chart of accounts, the specific amounts and account names may differ.
  • Based on your company’s accounting system, enter the correct date, amounts, and account names.

The sales of 10,000 made in cash shall be recorded on the credit side of a Trading A/c of the entity. Below is the extract of the Trading A/c, showing the same.Trading Account Showing Sales

Related Topic – Difference Between Revenue and Profit

 

Effect on the Accounting Equation

ASSETS = CAPITAL + LIABILITIES

As per the accounting rules, this equation must always be balanced. The transaction, goods sold for cash, has an effect on both sides of the accounting equation.

To understand it more clearly, let us take an example.

Company XYZ Ltd. has 50,000 cash as its capital. It sold goods worth 20,000 at 25,000 for cash. (Profit margin 25,000 – 20,000 = 5,000). Show the effect on the accounting equation.

Assets = Liabilities + Capital
Balance 50,000 0 50,000
Cash A/c 25,000 0 5,000
Stock A/c (20,000) 0 0
Total 55,000 0 55,000

 

>Read Bought Goods for Cash Journal Entry

 

How to Convert IRA to Gold – A Guide

Ahuja Sahil
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0
How to Convert IRA to Gold – A Guide

Have you ever given any thought to the possibility of diversifying your retirement portfolio by purchasing gold? As the state of the global economy remains unstable, an increasing number of investors are seeking the financial protection that can be found in precious metals.

Are you prepared to take charge of your retirement funds and investigate the world of individual retirement accounts (IRAs) that contain gold? Let’s get started and find out how to convert your IRA into gold and the potential benefits this could have for your future! Take a peek at this page for more

So, are you ready to have some fun?

What exactly is a transfer?

A gold IRA can be funded through a rollover or transfer from an existing retirement account.

With a rollover, you can transfer funds from your current IRA to a new gold IRA within 60 days after receiving the withdrawal proceeds from your current IRA custodian. If you take the money out before you turn 59.5, you’ll only have to pay a 10% penalty.

The transfer process involves no physical movement of funds; rather, your current IRA custodian will send the funds electronically to your new gold IRA custodian. This is the most common option because it’s convenient (you won’t have to handle the money alone), and it eliminates the risk of waiting longer than 60 days. Find out more info here.

 

How to open an account?

Opening a gold IRA account can be an exciting thing to do, but you shouldn’t do it rashly. All of you newbie investors need to locate a firm that deals exclusively with gold IRAs (officially known as self-directed IRAs) in order to open an account.

After opening an IRA, you can invest in gold and other metals by instructing your account custodian to make purchases on your behalf as long as they meet certain criteria set forth by the Internal Revenue Service (IRS). Your financial assets will be safely stored after they’ve made the purchase for good. How amazing is that

 

How to make the big transfer?

Once the account has been set up, we want you to know that the transfer process is pretty much a piece of cake!

So, here’s what you need to do, folks:

Get in touch with the IRA service provider handling your current account and let them know that you’d like to start a transfer.

Then, you would have to complete the necessary paperwork, and you’ll need to specify the new account details and the amount you wish to transfer.

Once that’s done, you should pretty much wait for the money to be transferred to your gold IRA from the account administrator. And once the funds are here, you can start your epic journey of buying precious metals. This will be a dream come true for any investor, folks!
If you’re dead set on gold, for instance, you need to choose what gold you want to buy. For example, you can look into coins and bars.

Tell the custodian of your gold IRA account to make the final purchase. They will utilize the money in your account to acquire the metals you want.

And now it’s time for the utmost protection of your assets. But don’t sweat it because a custodian is responsible for the safety of your precious yellow metal. They will tuck it in safely within a secure vault, so you’ll have peace of mind knowing that your wealth is protected!

Even while some companies will tell you otherwise, it’s usually not a good idea to store your gold at home. Keep an eye out for anyone making such a claim, as doing so can result in severe fines from the Internal Revenue Service.

Not just that, but thieves are often looking for victims to steal from. Imagine if your precious assets land in the hands of a thief because you’ve decided to store your gold home. Yikes!

That’s why it’s always better to have it stored in a secured vault.

And from then on, make sure to keep an eye on your account statements and the growth of your investments. The wise idea is to take a look at different websites, like BMOGAM Viewpoints, to find out more about what this transfer means for your financial health.

 

What are the perks of this transfer?

We’re so glad you’ve asked this question because you NEED to be aware of the benefits or risks before making a final decision. Perhaps if you know why so many folks decide on this option, you will decide more quickly.

Protection from inflation

Throughout times when inflation is high, our wallets pretty much suffer the most. This type of scenario is one of the reasons why so many people want to convert their IRAs to gold!

Gold has, on average, preserved its value over the course of history, and it’s frequently seen as a trustworthy asset for storing money in periods of economic unpredictability.

People move their retirement savings into gold to hedge against inflation and maintain their purchasing value in old age.

Economic security

When it comes to money, everyone pretty much wants to feel secure, right? So, we want you to know that putting some of your money into gold may help cushion the blow if the economy or perhaps even the stock market takes a downturn. Pretty awesome, right? Be sure to check out this page for more https://www.wikihow.life/Put-Gold-in-an-IRA.

Growth opportunity

As gold prices have increased over the past decade, its potential worth may continue to rise. If this amazing trend continues, your investment portfolio will also increase in value. Yay!

Diversification

Placing all of your money in a single investment or asset is a high-risk strategy. It’s quite alright if you feel you can’t handle several investments at the same time, but know that sticking to just one for a long time is a big no-no.

Awesomely enough, gold and silver provide an outstanding opportunity to diversify away from any other investments that you may already have, therefore lowering the amount of risk that is associated with your portfolio.

 

Are there any fees associated with the transfer?

When transferring gold from an IRA, you won’t have to pay any transfer fees to the IRS or any other agency. Your account administrator may charge a fee, although the amount will vary based on the company’s policies.

Talk to your current IRA custodian about any fees or charges that can be incurred if you make a transfer to a gold IRA. Discover more here.

 

A few final words

Ah, gold! Have you ever wondered where we’re all be right now if it wasn’t for gold? That’s how much of an influence it has over the world.

So, if you’re contemplating converting your good ol’ IRA to this awesome and shiny precious metal, be sure to understand everything there’s to know about the transfer. Sure, we’ve offered you some helpful insight, but it’s always good to check out other posts and articles as well.

The more you know, the more sure you’ll be in your decision. After all, we want what’s best for you and your finances. So, good luck!

 

 

Why Do FD Rates Increase?

Ahuja Sahil
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Why Do FD Rates Increase?

If you are considering investing in a fixed deposit account, you should know about one thing that stays constant – the fluctuation of its interest rate. FD rates increase and decrease more than you can imagine. In this article, we’ll look at the reasons that affect the change in FD rates and things to remember before investing in FD for maximum profit.

Do the FD Interest Rate Change Frequently?

Based on the inflation situation in the country, FD rates increase. This happens because the RBI (Reserve Bank of India) loans commercial banks at a decided period on an interest rate called the repo rate. The increase in this repo rate raises the bank’s interest rate on their loan from the RBI, resulting in increased FD rates.

 

What Affects the Increase in FD Rates?

  • Change in the Repo Rates

The first reason that causes the constant change and increase in the fixed deposit interest rate is the increased inflation rate. In order to get positive returns from the bank, an investor should always keep an eye out on the changing situation of inflation because this is the main cause of changing FD rates.

  • Enough Liquidity

If a bank with your fixed deposit account has sufficient liquidity, they won’t rely on the market-based FD rates as they will not need to be competitive to stabilise their position. This is generally a situation banks adopt in times of tight liquidity.

  • Demand and Supply Conditions of Lending

The next thing that causes increased FD rates is the demand and supply chain conditions in the lending world. Banks usually decrease their FD rates if there’s less demand for lending in the market. And if there’s a great demand for borrowing in the financial sector, banks usually increase their fixed deposit rate.

  • The situation of Call Money

Call money is used for short-term loans granted between banks or financial institutions. They are usually given for one day and typically attract a higher interest rate than other types of loans. One way it can cause an increase in FD rates is through its impact on the overall liquidity position of banks.

When banks have more funds to lend, they tend to reduce their deposit rates to encourage customers to borrow more. However, when there is a shortage of funds, banks may increase their deposit rates to attract more deposits and improve their liquidity position, affecting FD rates.

  • Fall of a Bank’s Fund Cost

The fall of the fund cost of a bank causes an increase in the FD rates because even with the high interest rates, the base rates revision is based on retail loans, causing revision of the fixed deposit interest rates.

Further, this falling rate also showcases the high liquidity of a bank in the market, leading to borrowing shortly from the call market. And if the call market borrows on lower rates, it can cause a change in the retail deposits.

 

What to Know When Investing in an FD?

Now that you know what causes a huge stir-up in fixed deposit rates, it’s time to understand the right time to invest in this financial tool and what to keep in mind when investing in an FD for maximum profit.

  • Taxable Income

The FD interest is taxable, so whatever interest rate you earn on your fixed deposit will be taxed. If the interest of your FD in one financial year is more than ₹40,000 or ₹50,000 for senior citizens, you’ll be taxed 10% TDS.

So, if you are ready to have taxable investments and savings and have thoroughly researched the taxable amount and what influences the tax rates, you can start investing in this fruitful financial product.

  • Laddering

As established before, the fixed deposit rates fluctuate on a large scale. But if you don’t want to lock in your money at a low interest rate, investing in FD with varying maturity periods is a wise choice. This is called laddering, and it helps reinvest short-term fixed deposits when FD interest rates increase.

  • Market Research

Conduct extensive market research to monitor the interest rate of fixed deposits by NBFCs and banks. This will help you understand the pattern of when FD interest rates increase and decrease.

Bottom Line

Market changes are never easy to predict, so studying the market before you invest and giving it much-needed time to get stable is necessary for maximum profit. This helps you prepare for any unfortunate event.

 

 

Debit Balance of Profit and Loss Account

Ahuja Sahil
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There are two sides to accounting: debit and credit. Profits & incomes are placed on the credit side (right). This is because we gain money, and in accounting terms, this is credit. Similarly, the debit side (left) shows all the expenses & losses.

Now, if we have a debit balance in the Profit and Loss account, it means the debit side is larger than the credit side. The money we spent (debit) was more than the money we earned (credit). Layman explanation of debit balance of profit and loss accountSo, if you hear someone say, “We have a debit balance in our Profit and Loss account”, it’s like saying, “We spent more than we earned. We have a loss!”. Therefore Debit Balance of Profit and Loss Account means “Loss” or “Net Loss” for a business.

 

Meaning and Definition

The income statement or Profit & Loss account is a financial statement that provides a summary of a company’s expenses, losses, incomes, and gains over a specific period of time. As a result of this account, the company can determine whether it can grow revenue or lower costs in order to generate profit.

Debit balance, in layman’s terms, means the “Debit Total > Credit Total”.

In the world of accounting, Profit and Loss accounts have a debit balance when the debit side (expenses & losses) exceeds the credit side (incomes and gains). Such a balance is called Net Loss, and it is adjusted from the reserves or capital. If continued over a longer period, it could lead to the insolvency of the company.

Net loss reduces the overall capital invested by the owners. For stakeholders, this reflection gives them a good idea of how the company is doing financially.

Similarly, a credit balance means that the “Credit Total > Debit Total.”

Related Topic – Assets have a Debit Balance, and Liabilities have a Credit Balance

 

Example

Following is the Profit and Loss account of PQR for the year ending Dec 20YYExample showing debit balance in profit and loss account (net loss)In the above example, the debit total is 20,000, and the credit total is 10,000. The balance of 10,000 on the credit side represents the balancing figure, which has been highlighted in red.

The above example shows a debit balance of the Profit and Loss account. The firm incurred a loss during the year even though there was a Gross Profit. This simply means that the indirect expenses of the firm are higher than the income generated.

10,000 will be reduced from the Capital account, thereby reducing the total capital invested in the business.

Related Topic – Debit and Credit Balance in Trial Balance Quiz

 

Debit Balance of Profit and Loss Account shown in the Balance Sheet

At the end of a financial year, the net loss is transferred to the balance sheet and shown as a deduction from Capital. This indicates that the company has not made enough money to cover its costs.

It is reflected as a negative amount, indicating the company has suffered losses. This reduction in equity signifies that the company’s overall financial position has been negatively impacted.

The image given below shows the transfer:

debit balance of P&L account shown in the balance sheetNet Profit

When the credit side of the Profit and Loss account is greater than the debit side, it is a credit balance. This credit balance is called Net Profit. It means that the indirect income of the business is more than the expenses. The net profit is added to the capital.

Related Topic – Profit and Loss Suspense Account

 

Gross Profit and Gross Loss

In the trading account, the terms “gross profit” and “gross loss” refer to the financial results of a company’s core trading activities, specifically related to the buying and selling of goods. It shows all the direct incomes and expenses like Sales, Purchases, Wages, etc.

Gross Profit – In simple terms, it means the “Revenue Earned from the Sale of Goods > Total Cost of Goods Sold.” It is the profit generated before considering indirect expenses, taxes, and interest.

A company’s gross profit tells you how profitable and efficient it is at managing its direct costs of production or acquisition. This shows a credit balance in a Trading account.

Gross Loss – On the other hand, a gross loss means that the “Revenue Earned from the Sale of Goods < Total Cost of Goods Sold.” It indicates that the company has incurred more costs in acquiring or producing goods than it has generated in sales income.

A gross loss or debit balance in a Trading account tells you the company’s direct costs are too high or its pricing strategy isn’t generating enough revenue to cover those costs.

  • Both gross profit and gross loss are critical measures in assessing the profitability and performance of a company’s trading activities.
  • They provide insights into the efficiency of cost management, pricing strategies, and the overall success of the company’s core operations.
  • GP & GL are further analyzed and used in combination with other financial statements to evaluate the overall financial health of the business.

 

>Read Credit Balance of Profit and Loss Account

 

Profit Sharing Ratio

Ahuja Sahil
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Imagine that you and your friend own a grocery store together. The place was found by you, the supplies were arranged, and everything was set up by you. Your friend invested some money and worked at the counter.

Both of you agree that since you worked harder, you should get more money from the store’s profits. You and your friend decide you’ll get 60%, and your friend will get 40%.

This is your profit-sharing ratio: 60:40. It means that for every 100  the store makes, you get 60, and your friend gets 40.

Profit Sharing Ratio ratio example in a pie chart

Definition

A partnership business is a type of business structure where two or more people come together to start a business. In a partnership, each person contributes resources like money, assets, skills, etc.

The profit-sharing ratio refers to the ratio in which the profits and losses of the business are distributed among the partners. It is determined under a written agreement known as the partnership deed which is prepared as per the terms agreed upon by the partners.

Normally, the partnership deed specifies the split percentage on which the partners will bear losses or distribute profits. However, in some cases, the ratio may differ for the distribution of losses.

However, in the absence of any information in the partnership deed about the profit-sharing ratio, the partners are assumed to be sharing the profits and losses equally.

Related Topic – What is the reconstitution of a partnership?

 

Factors Affecting the PSR

There are a lot of factors depending on which the partners decide upon this ratio. Some of them are mentioned below:

  • Sharing profits on the basis of the effort and skills each partner brings into the business is a common practice.
  • Division on the basis of responsibility taken, i.e. the ratio may be based on the role of each partner in the business.
  • In some cases, the profit-sharing ratio may be based on the past performance of each partner in the business.
  • On the basis of capital contribution, i.e. the partner who contributes a greater share of capital earns a greater percentage of profits, or
  • Division on the basis of consideration of both the above-mentioned factors, or
  • Any such clause or terms as the partners may agree upon.

Related Topic – Meaning and Methods of Valuation of Goodwill

 

Calculation & Formula

Ideally, there is no need to calculate the profit-sharing ratio as the ratio is mentioned in the partnership deed, and if no partnership agreement exists, then the profits are deemed to be equally divided between the partners.

However, there can be a few cases under which we calculate the ratio. The cases are mentioned below :

Case 1: If two partners, Y and Z, invest amounts of 100 and 200, and the partners decide to share the profits in the ratio of the amounts invested. Calculate the new profit-sharing ratio.

Y:Z = 100:200

Y:Z  = 1:2

Profit-sharing ratio = Ratio of Invested capital

 

Case 2: If two partners, E & F, each invest an amount of 100 for a period of 12 months and an amount of 200 for a period of 12 months, and they decide to share the profits in the ratio of amount multiplied by the period for which such amount is invested. The profit-sharing here would be,

E:F = 100*12/12 : 200*12/12 

E:F = 1:2

(Note: The time weights shall be taken in common units of measurement)

Profit-sharing ratio = Ratio of capital invested*Period of investment

Related Topic – What is Realisation Account in a Partnership?

 

Example of Profit Sharing Ratio

A, B, and C decide to start a business together. They form a partnership firm and introduce capital as 40,000, 30,000, and 20,000, respectively. They further decided to share profits and losses in the ratio of their capital. Thus their profit-sharing ratio is calculated as follows:

Particulars A B C
Capitals 40,000 30,000 20,000
Ratio 4 3 2

The profit-sharing ratio will be 4:3:2

Related Topic – 100 Most Important Accounting Terms for Interviews

 

New and Old Profit Sharing Ratio

There could be several reasons that necessitate a change in the profit-sharing ratios in a partnership. Here are a few: Such change in profit sharing ratio is the consequence of events such as:

  • Change in capital contribution
  • Admission of a partner
  • Retirement of a partner
  • Death of a partner
  • Mutual consent among the partners

The new profit-sharing ratio is the ratio in which the partners will divide the future profits and losses of the firm. The current percentage split becomes the old profit-sharing ratio.

The old profit-sharing ratio might be the initial agreement or the result of a previous reconstitution as agreed upon by the partners.

 

Example of Old and New Profit Sharing Ratios

Old Profit Sharing Ratio

Consider two partners, A and B, who run a business together. Their existing (old) profit-sharing ratio is 1:2. This means for every 3 units of profit, A receives 1 unit and B gets 2 units.

Introduction of New Partner and New Profit Sharing Ratio

Now, they have decided to bring in a new partner, C, to help expand the business. They all agree that the profit will now be shared equally among the three of them.

So, the new profit-sharing ratio between A, B, and C will be 1:1:1. This means for every 3 units of profit, each partner (A, B, and C) will receive 1 unit.

Related Topic – What is Revaluation Account in a Partnership?

 

Sacrificing Ratio and Gaining Ratio

Gaining Ratio: is the ratio in which one or more partners gain a share of profit. It is generally calculated at the time of retirement or death of an existing partner as the outgoing partners lose their share of profit, and hence the remaining partners gain that. The formula for calculation is:

Gaining Ratio = New Profit Sharing Ratio – Old Profit Sharing Ratio

Example: X, Y, and Z are partners sharing profits and losses in the ratio of 4:3:2. Partner X retires. Therefore, Y and Z decide to share the profits and losses in the future at 5:4. Calculate their gaining ratio.

Y Z
Old Ratio 3/9 2/9
New Ratio 5/9 4/9
Gaining ratio (New – Old) 2/9 2/9

In the given case, partners Y and Z each have gained 2/9th of the share of profits due to the retirement of partner X.

 

Sacrificing ratio: is the ratio in which partners of a firm forego their share of profits. It usually comes into play at the time of admission of a new partner as the old partners sacrifice a part of their current share in favour of the incoming partner.

Such sacrificing partners are compensated by the gaining partner(s) in the form of goodwill. The formula for the calculation of sacrificing ratio is,

Sacrificing Ratio = Old Ratio –  New Ratio

Example: A, B, and C are partners sharing profits and losses in the ratio of 5:3:2. A new partner, “D”, is admitted to the firm, and the new sharing ratio is 4:3:1:2. Calculate the sacrificing ratio.

A B C
Old Ratio 5/10 3/10 2/10
New Ratio 4/10 3/10 1/10
Sacrificing Ratio (Old-New) 1/10 0 1/10

Hence, in the given case, partners A & C have sacrificed 1/10th share of profit each for the new partner. Partner B loses nothing.

 

Gaining Ratio Sacrificing Ratio
1. This is the portion of profit sharing that each partner receives when the profit-sharing ratio changes due to admission, retirement, or death. 1. It represents how much each existing partner has given up or sacrificed to accommodate a new partner or adjust for a partnership agreement change.
2. New Ratio – Old Ratio 2. Old Ratio – New Ratio
3. Analyze the profit share gained by each partner. 3. Calculate how much profit share each partner has given up.
4. Increase in a partner’s share of profit. 4. A decrease in a partner’s profit share.

All these ratios are essential tools for managing a partnership. They ensure that all partners are treated fairly and understand exactly what portion of the profits (or losses) they are entitled to and what they stand to gain or lose when changes are made to the partnership structure.

 

>Read Realisation Account Vs Revaluation Account

 

Why are Salaried Employees More Likely to Qualify for Instant Personal Loans?

Ahuja Sahil
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Why are Salaried Employees More Likely to Qualify for Instant Personal Loans?

Personal loans have become the go-to funding option in recent years, especially because they are super easy to get and several lenders offer online processing as well. When you are in need of funds and can get a loan online, it not only makes it convenient but also a reliable choice for salaried individuals.

Factors Responsible for Easy Approval of Instant Personal Loans for Salaried Persons

Let’s explore what lenders take into consideration when giving out instant personal loans for salaried individuals.

 

  • A Good Repayment Record

If you have a strong payback history, you have a better chance of getting authorised for an instant loan available for salaried employees. Lenders look at your payback history to determine your creditworthiness.

According to them, you are a responsible borrower if you have a history of paying your debts on time and managing your finances wisely. Thus, avoid late payments and defaults to keep your chances of getting a loan bright.

 

  • Employer Reputation

Your employer’s reputation might also play a vital role in obtaining a quick loan. Lenders consider it when determining your job security. Working for a respected firm recognised for paying its employees on time will boost your chances of obtaining loan approval.

So always check the ratings of an organisation before joining. This way, you’ll have one less thing to worry about whenever you need finance.

 

  • Handsome Annual Income

This is quite obvious! A high annual income might significantly improve your chances of being authorised for a quick loan. Lenders assess most of your repayment ability based on your income. It will benefit you to get a steady salary covering your monthly costs, loan payments, and savings commitments.

It demonstrates that you are financially secure and can manage your money appropriately. Who else can be a better borrower?

 

  • Healthy Credit Score

Lenders use your credit score to assess your creditworthiness. In fact, after salary, the most crucial factor in getting instant loans for salaried employees is a good credit score. This is because, along with high income, a higher reliability is desirable for a borrower.

A high credit score demonstrates you are a responsible borrower with a sound financial management track record. So always follow good money practices and keep a check on your credit score.

 

Reasons You Should Get an Instant Loan for Salaried Employees

Now that you know the factors responsible for the easy approval of instant loans for salaried persons, let’s see why you should get one.

  • These Loans are Extremely Easy to Get

Obtaining an immediate loan has never been easier, thanks to the arrival of FinTech. You may apply for a loan online. The procedure is straightforward. You won’t have to go to a bank or complete lengthy paperwork.

Moreover, the paperwork for an online loan is relatively swift. Many conventional banks are also following suit to remain relevant.

 

  • You Can Use Them for any Purpose

One of the major benefits of obtaining a quick personal loan is that it can be used for any purpose. Unlike regular loans, which require you to declare the intention of the transaction, an instant personal loan can be used for anything.

So whether you need to consolidate your debts or need some financial push for your next vacation – Just apply for an instant personal loan available for salaried individuals and get your thing done!

 

  • These Loans Include Hassle-free Documentation

Another advantage of obtaining a personal loan is the documentation process is easy. You won’t have to submit a mountain of paperwork or wait weeks for your loan to be authorised. Most lenders need simple documents such as your ID, address, and income proof.

You may only be asked for additional documents if your financial profile has some complications. Still, getting these loan approvals is quite simple.

 

  • The Approval and Disbursal are Quick

You apply for a personal loan mostly because you need the money urgently, and there is no other way to get it. Thus, one of the most significant benefits of obtaining an instant loan available for a salaried person like you is the speed with which it is approved and disbursed.

The lender will generally accept your loan within a few hours of receiving your application. The cash will be sent to your bank account within a few days.

 

In conclusion, if you are a salaried person, an instant loan might be an excellent alternative for you to arrange finance. You may receive the funds you need fast and efficiently. So, consider the points listed above and the benefits of these loans. Also, remember to find a reputable lender and thoroughly study the terms and conditions before applying for a loan.

 

>Read Personal Loans

 

IMPS, NEFT, or RTGS: Which Mode of Money Transfer Takes the Cake?

Ahuja Sahil
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IMPS, NEFT, or RTGS: Which Mode of Money Transfer Takes the Cake?

Over the past few decades, the payment scenario has undergone quite a tremendous change. With our reliance on online modes of transaction consistently increasing, more and more digital modes of money transfer have emerged. These modes of digital transactions not only provide convenience but also ensure security.

In addition to card payments and net banking, there are a variety of other modes through which you can transfer money online. NEFT, IMPS and RTGS are some of the most popular modes of digital transfer that have been in constant use for years now. They allow you to send a substantial amount of money from one bank account to another in a swift and secure manner.

However, at times, the services provided by each of these modes of online transfer can be easily confused.

Given below is a detailed analysis of each of these modes to provide better clarity.

 

NEFT

NEFT or National Electronic Fund Transfer is a digital mode of transferring funds that lets you send money from your account to the recipient’s. There is no maximum limit on the amount that you can transfer in a day. You can send money to any bank account, provided they are NEFT-enabled.

NEFT transfers are not real-time transactions. This implies that it takes a while for your transfers to be completed. Prior to December 2019, RBI had regulations as per which NEFT transactions could only be processed during fixed timings. This meant that you could only initiate transfers between 8 AM and 6:30 PM on weekdays. On Saturdays, you could make transfers between 8 AM to 12 PM. However, post-2020, the regulations were lifted and NEFT transactions can now be performed 24*7.

You would need to add the beneficiaries on your bank’s internet portal to carry out NEFT transfers. No fee will be charged on online NEFT transactions if you are a savings bank account user. According to the guidelines provided by RBI, NEFT payments are transferred in half-hourly batches throughout the day. You can make NEFT transfers through offline modes as well. Apart from transferring funds, you can also use NEFT to pay your credit card dues, foreign exchange remittances, loan EMIs, and so on.

 

You might now wonder how to make an NEFT transfer. Here’s how:

  • Visit your bank’s Internet portal
  • Select “Fund Transfer”
  • Opt for “NEFT” from the list provided
  • Tap on “Add Beneficiary”
  • Type out details such as name, IFSC Code, bank account number, etc. of the beneficiary
  • Select “Add” or “Confirm”
  • Type out the OTP sent to your number for authentication
  • It will take about 24 hours for your beneficiary to be added
  • Once that’s done, select the beneficiary, type out the amount, and confirm the transaction
  • Select “Confirm” and your NEFT transfer will be processed

 

RTGS

RTGS or Real Time Gross Settlement is generally used for transfers that are large in value and need to be cleared immediately. The minimum amount that you can transfer through RTGS is ₹2 Lakhs. There is no maximum limit unless your bank imposes one. For an RTGS transfer, you will need to make sure that your account as well as your recipient’s account is RTGS-enabled.

Although managed by the RBI, the difference between NEFT and RTGS is that an RTGS transfer can be done instantly, unlike an NEFT transfer. The amount that you send, reaches your beneficiary immediately as it is a real-time transfer. RTGS transactions can be done 24*7 except between 11:30 PM and 12:30 AM. There are no added charges on transfers made using RTGS. These transfers can also be made using offline modes.

Here’s how you can make an RTGS transfer:

  • Go to your bank’s Internet portal
  • Tap on “Fund Transfer”
  • Choose “RTGS” from the menu provided
  • Select “Add Beneficiary”
  • Fill in details such as bank account number, name, IFSC Code, etc. of the beneficiary
  • Tap on “Add” or “Confirm”
  • For authentication, fill in the OTP sent to your number
  • Your beneficiary will be added in about 24 hours
  • Post that, choose the beneficiary from the list, fill in the amount, and proceed with the transaction
  • Tap on “Confirm” and your RTGS transfer will be completed

 

Here’s a table to help you understand the basic difference between NEFT and RTGS:

NEFT  RTGS
Not a real-time transfer  Is a real-time transfer 
Has a minimum transfer limit of  ₹1 Has a minimum transfer limit of  ₹2 Lakhs
Settled in half-hourly batches  Settled one-on-one
Takes times Is an instantaneous transfer 
Can be performed 24*7 Can be performed 24*7, except between 11:30 PM and 12:30 AM

 

IMPS

IMPS or Immediate Payment Service is an online money transfer service managed by NPCI or the National Payments Corporation of India. An IMPS transfer has features of both NEFT and RTGS. Like NEFT, through IMPS you can transfer amounts as low as ₹1. These transfers, like an RTGS transfer, will take place in real-time. However, the maximum amount that you can transfer using IMPS is ₹2 Lakhs.

You can initiate an IMPS transfer through Internet banking, ATMs, SMS, and mobile payment platforms. You can access this service 24*7 on all days. An IMPS transfer is ideal for transfers that are comparatively smaller in value. On completion of the transfer, both you and the recipient will be instantly notified by your bank. Other than bank account transfers, you can also use IMPS for merchant payments, mobile banking, and so on.

Here are steps on how to make an IMPS transfer through mobile banking:

  • Go to your mobile banking app
  • Select the Fund Transfer option
  • Opt for “IMPS”
  • Enter the mobile number, transfer amount and MMID (Mobile Money Identifier) of the beneficiary
  • To authenticate your transfer, fill in your mobile PIN (MPIN)
  • Your transfer will be completed and a confirmation message will be sent to you

Given below are steps on how to make an IMPS transfer through Internet banking:

  • Visit your bank’s online portal
  • Choose “Fund Transfer”
  • Tap on “IMPS” from the list
  • Choose “Add Beneficiary”
  • Enter details like IFSC Code, name, bank account number, etc. of the beneficiary
  • Choose “Add” or “Confirm”
  • For verification, fill in the OTP sent to your number
  • In about 24 hours your beneficiary will be added
  • Once your beneficiary has been added, select the beneficiary from the list and enter the amount
  • Select “Confirm” and your IMPS transfer will be done

Online modes of fund transfer are fast, secure and hassle-free. Additionally, they also offer flexibility and choice with regard to how much money you wish to transfer and how instantly you want it done. Having read about NEFT, IMPS, and RTGS, you should now be able to choose a mode of transfer that best suits your transactional requirements.

 

 

How to Handle Volatility?

Ahuja Sahil
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0
How to Handle Volatility?

Everything in life is unpredictable. You can’t quite be sure of anything, can you? That’s just how things were. If predictions were real, by now, we could see billionaires everywhere. Just like that, the stock market also has volatility. Here, you would have to be careful about how things work.

So, here we go – let’s learn what to do when the stock market is volatile.

 

Tips to Handle Volatility

a) Your Financial Goal is Always Plan A

That is the most important thing for you to remember. If you look at the VIX chart for the previous nine years, you will notice that it has been on a downward trend. However, in the interim, there have been at least 8-10 occasions where volatility has surged significantly.

The main concept is to stick to your long-term financial plan. This strategy is geared towards your long-term objectives and has some built-in safeguards to deal with volatility. The systematic investment plan (SIP), for example, is intended to capitalize on market volatility.

Since SIPs are the foundation of your financial strategy, they are critical to ensuring that the power of compounding works in your favour. If you look at the performance of SIPs over the last nine years, they would have significantly exceeded the index since they have taken advantage of market volatility.

Even if you find the best-performing trading platform in India (like groww.in), when you don’t stick to your financial goal, it is all just moving in a directionless form.

 

b) Futures and Options Can Benefit You

Futures and options are viewed by many investors as a low-margin alternative to cash market trading. They are, in fact, superb risk management products. These derivative products should be used most effectively in volatile markets.

For example, if you are long on equities in a volatile market, you can use futures to lock in profits while still benefiting from roll premiums. Second, you can utilize put options to hedge your risk, as well as beta hedging with index futures to mitigate portfolio risk. If you are wholly willing to be a little more daring and aggressive, volatility tactics such as straddles and strangles can help you make the most of tumultuous markets. In unpredictable times, you truly have a lot of options.

c) Go Far and Beyond with Diversification

Understand that there is no Best trading platform or one-suits-all solution. So, expansion is the only way.

When markets are volatile, how do you manage your asset mix? During volatile times, certain assets do not exhibit the same degree of volatility as equities. When equities indexes are turbulent, debt markets, for example, tend to be more stable. As a result, debt in your portfolio brings stability and the promise of consistent income.

Similarly, gold typically gains from macroeconomic volatility. In these turbulent times, increasing your exposure to gold through gold ETFs can be beneficial. The moral of the story after all is to keep your asset mix diverse to fight volatility.

d) Stay Strong on that Emergency Fund

Your emergency cash savings act as a financial buffer during difficult times or when unforeseen needs arise. The conventional wisdom states that you need to keep three to six months’ worth of money on hand to meet any immediate requirements that may occur.

Consider increasing that to six to nine months or longer if you are experiencing economic hardship or the nature of your profession. It will give you more financial flexibility to assist you in getting through difficult times.

e) Financial Professionals Can Help

To help you feel confident that you are on track toward your financial goals, an experienced financial professional can assess your current plan or lead you through the process of building one.

Even if you are currently satisfied with your plan and investment portfolio, the economic landscape might change quickly. A financial professional can help you review your situation and change your plan as needed to protect or safeguard your financial position or take advantage of new market opportunities.

f) Don’t Run

In general, the answer is no (with some exceptions). Market volatility decreases, and prices rise over time. Maintaining a long-term plan through bad circumstances can also allow you to buy more stock when it is on sale. If you need the value of your assets fairly quickly or income to live on (for example, if you’re a retiree), it may be better to rotate out of stocks and into more conservative investments when volatility occurs.

g) Know Your Risks

Your investment approach is heavily influenced by the level of risks that you are willing to take. You will wish to from time to time.

h) Rebalance

Because market volatility can produce abrupt changes in investment prices, your asset allocation may deviate from your desired divisions following periods of intense fluctuation in either direction.

During these periods, you should rebalance your portfolio to bring it back in line with your investing goals and the level of risk you prefer. When you rebalance, sell some of the asset class that has grown to take up a larger portion of your portfolio than you’d like, and use the proceeds to acquire more of the asset class that has shrunk. When your allocation deviates by 5% or more from your original target mix, it’s time to rebalance.

You should also rebalance if an asset class has a divergence of more than 20%. For example, if you want emerging market equities to account for 10% of your portfolio but discover that they account for 8% or 12% following a significant market move, you may want to adjust your holdings.

 

Final Note

You could never know what is in store for you – so be ready for it all. This guide could help you know what exactly to do when the market is volatile.

 

How to Get a Credit Card for an LLC? The Complete Guide

Ahuja Sahil
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0

As a business owner, having a credit card for your LLC (Limited Liability Company) can be a convenient way to manage your business expenses and build credit for your company. However, getting a credit card for your LLC can be a bit more complex than getting a personal credit card.

Why do you Need a Credit Card for your LLC?

A credit card can be a necessary tool for LLCs for the following reasons:

Separating Business and Personal Finances

LLCs are separate legal entities, which means that they have finances that are distinct from the owner’s personal finances. Using a credit card specifically for business expenses makes it easier to keep track of business expenses and prevents the commingling of personal and business finances, which is essential for tax purposes and financial record-keeping.

Cash Flow Management

A credit card can help LLCs manage their cash flow effectively. For instance, if an LLC needs to purchase inventory or equipment but does not have the cash on hand to make the purchase, a credit card can provide a revolving line of credit that allows the business to pay for these expenses over time.

Rewards & Cashback

Many credit cards offer rewards programs and cash-back incentives that can benefit the LLC. These rewards may include points, miles, or cashback for purchases made with the card. This can be particularly useful for LLCs that make regular purchases for their business.

 

Steps to Get a Credit Card for an LLC

Let us check out the steps to get a credit card for your LLC.

Obtain an EIN (Employer Identification Number)

The first step in getting a credit card for your LLC is to obtain an EIN from the Internal Revenue Service (IRS). An EIN is a unique identifier assigned to your LLC for tax purposes. You can apply for an EIN online through the IRS website. You will need to provide information such as your LLC’s legal name, mailing address, and the names and Social Security numbers of the LLC’s owners.

Open a Business Bank Account

Once you have your EIN, the next step is to open a separate bank account for your LLC. This will help you keep your personal and business finances separate, which is important for legal and tax purposes. You will need to provide your EIN, business registration documents, and personal identification to open a business bank account.

Build Business Credit

To qualify for a credit card for your LLC, you will need to establish a credit history for your business. You can do this by paying bills on time, maintaining a positive bank account balance, and applying for credit lines or loans. Building business credit can take time, but it is an important step in getting a credit card for your LLC.

Research Credit Card Options

Once your LLC has established a credit history, it’s time to start researching credit card options. Look for cards that are suitable for your LLC’s needs and credit history. Some credit cards offer rewards or benefits that match your preferences and needs, such as cashback, points, miles, travel insurance, purchase protection, or extended warranties

Apply for a Business Credit Card

Once you have determined which business credit card is best for your LLC, visit the website of the credit card issuer and fill out an application. Provide accurate and complete information about your LLC, such as your business name, EIN, address, and income. Wait for the credit card issuer to review and approve your application.

Use the Credit Card Responsibly

Once your LLC has been approved for a credit card, use it responsibly and make timely payments to avoid accumulating debt and damaging your LLC’s credit score. It’s important to keep your personal and business finances separate to avoid confusion and ensure that your LLC is properly protected.

 

Tips to Choose a Credit Card for an LLC

Selecting a credit card for a Limited Liability Company (LLC) can be a critical decision that can have significant financial and operational implications for the business. Here are some tips to help an LLC select a credit card that suits its needs:

Determine the Primary Use of the Card

The first step in selecting a credit card for an LLC is to determine the primary use of the card. This will depend on the nature of the LLC’s business and the types of expenses it incurs. For example, an LLC that makes frequent purchases of travel or office supplies may benefit from a credit card that offers travel or office supply rewards.

Consider the Interest Rates and Fees

It’s important to consider the interest rates and fees associated with the credit card. Some cards may offer rewards and benefits but come with high annual fees or interest rates. An LLC should choose a card that offers competitive interest rates and fees. Just as the LLC annual fees by state differ, high credit card interest rates and fees could be a burden in certain instances.

As the cost and fees of forming an LLC differ from state to state,

Review the Rewards Program

If the LLC plans to use the credit card for regular business expenses, it’s important to review the rewards program carefully. Some credit cards offer cashback on purchases, while others offer points or miles. An LLC should choose a rewards program that aligns with its business goals and offers the most significant benefits for its spending patterns.

Check the Credit Limit

It’s important to check the credit limit on the card to ensure that it is sufficient to cover the LLC’s expenses. An LLC should choose a credit card with a limit that is high enough to accommodate its regular spending but not so high that it puts the business at risk of overspending.

Evaluate the Customer Support

A credit card issuer with responsive customer support can be a valuable asset for an LLC. The card issuer should have a strong reputation for providing timely and effective customer support in case of any issues or concerns.

Check for Additional Benefits

Check for Additional Benefits
Some credit cards offer additional benefits that can be useful for an LLC. For example, some cards offer rental car insurance or travel accident insurance. An LLC should choose a card that offers benefits that are relevant to its business operations.

By evaluating these factors, an LLC can choose a credit card that is a valuable tool for managing its finances and supporting its business operations.

 

Final Thoughts

Getting a credit card for your LLC requires a bit of legwork, but it can be a valuable tool for managing your business finances and building credit for your company. Selecting a credit card for an LLC requires careful consideration of the card’s interest rates, fees, rewards program, credit limit, customer support, and additional benefits. By following the steps outlined in this article, you can get a credit card for your LLC and help your business grow.

Having a credit card can be an essential tool for LLCs, as it provides benefits such as building credit, separating personal and business finances, managing cash flow, convenience, and liability protection.

 

 

Factors That May Affect International Shipping Rates in Your Business

Ahuja Sahil
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0
Factors That May Affect International Shipping Rates in Your Business

All shipping services are essential in the eCommerce industry since there are no other ways to deliver products to clients. While you may claim that consumers can pick up the products, this jeopardizes both parties’ confidentiality and safety. Furthermore, it is inconvenient for the clients, and with the current gas price, travelling across the country to pick up your goods would be prohibitively costly.

Shipping expenses are rising for businesses all across the globe. Rising delivery prices, particularly international freight charges, may be difficult for merchants and customers.

The cost of delivering items impacts every level of the supply chain. Hence price hikes to account for higher shipping costs are typical.

Many firms see high shipping costs as the most significant contributor to product prices and inflation. To ship products across borders as cheaply as possible, you must first understand why shipping prices are rising in the first place.

 

Package Price

A package value, often known as the Customs value, is the content value of a shipment that substantially impacts the price you are paid for shipping in eCommerce. Sellers that ship high-value items must insure their parcels, which raises the delivery cost.

In addition, the total monetary worth of all products in your shipment determines the import duty the recipient must pay. As a result, you should contact the postal service or the customs office to confirm that you are not shipping high-end merchandise.

Antiques, art artefacts, expensive rugs, porcelain, crystals, and record collections are examples of high-value things. You may come across a courier service that does not handle high-value products since they are prone to theft, loss, or damage.

 

Tariffs or taxes

A tariff is a levy levied by a particular country on an imported commodity at the border. Taxes help governments collect money while also protecting local manufacturers. This situation may impact your company if you develop your brand internationally.

Tariffs and taxes, in addition to the accessibility of most domestic products, play an important factor in why most customers purchase locally-made commodities. When you ship internationally, you must pay a fee before the shipment reaches its destination.

When shipping to a different destination country where you do not have a free trade agreement (FTA) to avoid customs and fees, unlike when sending to the United States, although there is little you can do about it, you may select a shipping company such as firstmile.com that provides cheaper shipping costs to compensate for foreign duties.

 

Fuel Prices

Fuel prices have soared for various reasons, including the war between Ukraine and Russia. These factors have an impact on you as a vendor as well.

If you’re wondering how fuel prices impact shipping charges, remember that, depending on the type of shipping service, gasoline costs may account for up to 60% of total shipment expenses. Worldwide fuel costs have already surpassed $100 per barrel for international shipping, significantly impacting shipping operations.

To maintain service standards, a shipping courier, whether international or domestic, must pay these expenses, which implies that the size of the package must also grow. If the UPS global shipping rate is also impacted, it is best to prepare for the worst to discover strategies to lessen the issue.

 

Dimensions and weight of the package

While larger goods tend to cost more, some organizations assess products by weight and parcel dimensions since certain items are transported in large boxes while being smaller in size for the shipment. Most couriers utilize this pricing strategy to optimize the space within the shipment container.

To save money on overseas shipping, ensure the package boxes have enough capacity to hold the contents; otherwise, you’ll have to pay extra. However, you may save money using shipping materials such as courier bags and Kraft envelopes for smaller products.

 

Distance between shipping and delivery

Shipping prices are also affected by the distance between the vendor and the customer. If the destination is closer to the branch, shipping costs will be lower, including UPS international shipping rates. However, the shipping charge will be greater if the location is farther away.

The computation begins at the package pickup point, usually the branch location, and ends at the recipient’s address.

 

Shipping Providers

Your shipping decision is the essential element influencing international shipping charges. Express shipping, such as priority mail international and priority mail express international, is more costly than regular or economy shipping since the arrival time is shorter.

Because the selected shipping service influences the delivery prices of the overseas cargo, following the best shipping strategy will help you locate the best shipping choice. For example, many businesses do not impose extra fees during the holiday season. However, delays are to be anticipated due to the high amount of products shipping around this period. As a result, the buyer may still need to choose the more costly shipping option, international priority, for the products to arrive on time.

A shipment schedule can prevent instances like these and relieve your clients’ financial hardship. You or your client do not need to choose the expedited delivery option since you specify exactly when you will send the products.

 

Shipping Security

Shipping problems are not commonplace in the shipping and delivery sector. However, the likelihood of their occurrence remains high. As a result, you must take all precautionary measures available to guarantee that nothing occurs to the items.

Aside from working with an overseas shipping firm, you may use shipment protection as a backup plan in case anything unexpected occurs. It will not refund your money but build trust between you and the consumer.

Build trust with your consumers since it will benefit your firm. Even the most respectable business and well-proven marketing plan have areas for improvement, so anticipate the buyer to be dissatisfied at times, despite the seller’s best efforts and earnest intentions. When you create trust, most consumers will overlook a mistake.

It may seem daunting with the costs, procedure, and everything else in between, but executing the correct approach will help you thrive in international shipping.

 

 

Tips to Help You Avoid Student Debt

Ahuja Sahil
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0
Tips to Help You Avoid Student Debt

As the cost of higher education continues to rise, many students find themselves struggling to pay for college. According to the College Board, the average cost of tuition and fees for the 2020-2021 academic year was $37,650 at private colleges, $10,560 for state residents at public colleges, and $27,020 for out-of-state students at public colleges.

The high cost of education often results in students taking out loans to pay for their college education, leading to significant student debt.

However, student debt can have long-lasting negative effects on a person’s financial health, including limiting their ability to buy a home, start a business, or save for retirement. Therefore, it is essential to take steps to avoid student debt as much as possible.

In this article, we will discuss practical tips to help you avoid student debt. Whether you are in high school, about to start college, or already enrolled, these tips can help you minimize your debt burden and set you on the path to financial stability. Let’s dive in!

 

Start with a plan

Before starting college, it’s essential to have a plan in place to avoid taking on excessive student debt. Here are some tips to help you get started:

  1. Research the cost of education: Research the cost of attending the colleges you are interested in, including tuition, fees, and living expenses. This information will help you create a realistic budget for your college years.
  2. Determine the funding options: Explore all your funding options, including scholarships, grants, work-study programs, and federal student loans. Be sure to fill out the Free Application for Federal Student Aid (FAFSA) to determine your eligibility for financial aid.
  3. Create a budget: Once you know how much college will cost and how much funding you have available, create a budget that accounts for all your expenses. This includes tuition, fees, textbooks, housing, food, transportation, and personal expenses.

 

Save money before college

Saving money before college can help reduce your reliance on student loans. We have some tips that can aid you in saving money.

  1. Work and save money during high school: Consider getting a part-time job during high school to save money for college. Every dollar you save is one less dollar you’ll need to borrow.
  2. Look for scholarships: Apply for as many scholarships as possible. Many scholarships are available based on academic merit, extracurricular activities, and other criteria. The cheap essay writing service offers a scholarship essay writing service to help you increase your chances of winning scholarships.
  3. Attend community college or trade school: Consider attending a community college or trade school for your first two years of college. These institutions often have lower tuition and fees, and credits earned can transfer to a four-year college or university.

 

Make smart decisions during college

To decrease your college expenses, it’s advised to make intelligent decisions while in college. To make the most of your college experience, consider the following suggestions:

  1. Choose an affordable college: Consider attending a public college or university or an in-state private college to save money on tuition and fees.
  2. Live off-campus: Living off-campus can be cheaper than living in a dormitory. Consider sharing an apartment with roommates to reduce your living expenses.
  3. Work part-time: Consider getting a part-time job during college to help cover your expenses. Be sure to balance your work and academic responsibilities.

 

Minimize expenses while in college

To reduce your overall college expenses, it’s a good idea to cut down on your spending while in college. Check out these saving tips:

  1. Buy used textbooks: Buy used textbooks or rent them instead of buying new ones. You can also look for digital versions of textbooks to save money.
  2. Use student discounts: Many businesses offer discounts to students. Always ask if a student discount is available before making a purchase. 
  3. Avoid unnecessary expenses: Be mindful of your spending and avoid unnecessary expenses, such as eating out or buying expensive clothing.

 

Stay in communication with your lender.

To effectively handle your student loans, it’s crucial to maintain regular communication with your lender. Here are some suggestions to assist you in managing your student loans:

  1. Know your loan terms: Understand the terms and conditions of your student loans, including the interest rate, repayment period, and repayment options.
  2. Stay in touch with your lender: Keep your lender informed of any changes in your contact information or financial situation. If you’re having trouble making payments, contact your lender to discuss your options.
  3. Consider loan consolidation: Consolidating your student loans can simplify your payments and may lower your interest rate. However, be aware that consolidation can extend your repayment period, which may result in you paying more interest over time.

 

Final words

In conclusion, taking steps to avoid student debt can have a significant impact on your financial future. By implementing the tips discussed in this article, you can minimize your reliance on student loans and reduce your overall college costs.

By being proactive and mindful of your finances, you can set yourself up for a more stable financial future and focus on achieving your academic and professional goals.

 

 

How to Find Homeowners Insurance by Address

Ahuja Sahil
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0
How to Find Homeowners Insurance by Address

Homeowners insurance (HOI) is an important part of owning property. Coverage may help you cover losses from thieves or help you get reimbursed for medical bills if you happen to slip and fall. Therefore, it’s important to know what HOI is, how it works, and how to find out information about policies in your area.

Thankfully, it’s not hard to find information about homeowners when you use an address lookup tool. Additionally, you can reach out to members of your community or look for more information. We’ll show you the fastest ways below.

 

What Is Homeowners Insurance?

Homeowners insurance (HOI) is a type of insurance that’s available for people who own homes or properties. Typically, it’s a single-premium insurance plan that covers property insurance and liability.

Depending on the insurance policy, damage from pets or severe weather may also be included in an HOI plan. Understanding what HOI is and how it works may help you determine the cost in your area.

 

How Much Does HOI Cost?

The price of HOI varies depending on where you live, the size of the home, and the type of coverage available. Another factor is how much it costs to rebuild a home if it becomes ruined by damage like fire.

HOI may also vary based on special provisions like insurance for war, floods, and severe weather. Insurance for damage caused by pets will also raise the premium.

 

Does Everyone Have HOI?

No, some homeowners may not have homeowners insurance. Legally, residents aren’t required by law to insure their homes, so there may be cases where people don’t have a policy.

That said, most companies that provide mortgages require homeowners to enrol in insurance plans to prevent a loss of capital if something happens. Additionally, mortgage insurance is also available for similar purposes.

 

How to Find Information About Homeowners Insurance?

Information about someone’s homeowner’s insurance is not always available in the public record, so you’ll have to contact them if you want to file a claim.

While it’s hard to find information about a specific HOI policy, it’s possible to estimate the cost of HOI or what policy types are available in an area with a public records search tool.

 

How to Find Information About HOI Policies in Your Area?

When it comes to public record search tools, you want to use the best possible tool. So, you’ll want databases that include accurate information that’s current or within at least one year. This is where Information.com comes into play, which is our favourite address lookup tool.

Information’s website has an address lookup tool that allows you to find information about an address. When you enter an address into the tool, you can learn about who lives there, estimations on the value of the home, and much more. Therefore, you can deduce some information about potential HOI policies and their cost in your area.

What’s more? It reveals additional information about properties.

You can find the following information about an address when you run a search with Information.com:

  • Owners of the home
  • Past owners of the home
  • Sex offender status of residents
  • Criminal records of residents
  • Court records of residents
  • Liens on the home
  • Purchase records

You may find some or all of this information when you look into an address.

 

How to Find HOI Policies Online?

Another way to find details about an HOI policy is online. It’s possible to Google policy providers in your area to learn about potential insurance plans.

Calling the company or visiting their website will provide you with the specific details you’re looking for. Online forums and other resources on Google will also help you find information about HOI in your area.

 

Find Information About Homeowners Insurance Today

Homeowners’ insurance is an integral part of owning a home. Without coverage, you’re liable for stolen goods, property damage, and other expenses like damage from severe weather. Therefore, it’s important to consider the options you have available in your area to find the best homeowners insurance that fits your needs.

To help you narrow down your search, public record search tools like Information.com will help you find common policy information in your area.

 

 

Understanding Freight Accounting and its Benefits

Ahuja Sahil
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0

As a shipping company owner, freight accounting helps you keep track of the costs of sending goods from one place to another.

You can sometimes send a product from a warehouse where it’s made to the company’s warehouse that sells the product. You can also send the product from a manufacturing company to a store or directly to the customer.

Regardless of how you send your products, paying close attention to freight accounting is vital as it will help you know about all the costs involved. Freight accounting will also help you know how your business is doing.

freight accounting infographic showing shipping box on belt

 

How freight accounting is important to your business

Freight accounting breaks down the amount of money your business spends shipping and receiving different products.

Some of your company’s freight costs may be negotiable or changeable, which could help you save money, while others are fixed, and there is nothing you can do about it. Your accounting team needs to track freight costs accurately to find these areas.

If you have a full picture of how and where you spend money, it’s easier to develop ways to improve efficiency and cut costs.

Knowing the health of your business also gives you peace of mind as you know what you need to do to keep your business operational.

 

Freight accounting best practices

If you have a shipping company such as https://www.shipnetwork.com/ and freight accounting is a significant part of your business, there are several things you should do to have a great time and save your company as much money as possible. Some of these things include:

Have a separate shipping account

To avoid mixing things up, you should set up a separate shipping account that is easy to access and manage. You put in all the costs of sending goods to customers or other businesses here.

Play by the law

Also, it’s crucial to ensure that your company’s shipping and accounting practices align with all laws, such as tax and environmental laws. A good rule of thumb is to ensure that your business:

  • Keeps accurate records of your money.
  • Sends all the necessary paperwork to the government.
  • Obtains any relevant permits.
  • Maintains records in a safe place.
  • Checks the records often.
  • Implements controls to safeguard data.
  • Stays up to date on all the rules in your city, state, and country

 

Prepare your accounts once a month

Cash flow statements, forecasts, and income statements should be made often, ideally at least once a month.

The reason for this is that as a logistics company, you have a lot of transactions, and it’s important to stay on top of them to keep the company’s finances in order and reduce risk.
Having up-to-date accounts will help you make better decisions and ensure you always have up-to-date information about how your business is doing.

Count your earnings only when the product reaches the customer.

You should only count money as income once all of the conditions in your contract with the customer have been met.

The contract will say what the shipping or transportation company needs to do to meet its obligations.

The related revenue should be counted either over time or at a certain point, depending on when control of the good or service is given to the intended recipient and what it is.

For example, a cruise ship should record revenue over time as the customer gets and uses the service.

A delivery company should count revenue when the customer receives the goods.

 

Follow the International Financial Reporting Standards (IFRS)

The International Accounting Standards Board puts out IFRS, which are accounting rules you should follow in your business.

The organization guides companies in making and sharing their financial statements in a way that is true, fair, and comparable to how other organizations worldwide do the same.

The standards are based on principles that provide a global framework that many see as the best way to do things.

The IFRS is critical for logistics and transportation companies because many work internationally and do business across borders.

A common set of accounting standards also makes it easier for investors to understand a company’s financial statements and spot investment opportunities.

 

Follow the laws in your area

As mentioned above, logistics companies should follow not only IFRS but also any local rules important to their business and how it works.

Logistics and transportation companies often work in more than one country. Because of this, you must know the laws in all the countries where you operate and the laws in the country where you file the annual reports.

 

Make use of modern accounting software.

Many businesses still use outdated accounting software that can’t meet their needs in the modern business world.

Companies are dealing with a growing amount of data that needs to be processed, recorded, and analyzed correctly so that it can be helpful to anyone who might use it.

Outdated accounting systems can only handle small amounts of data, making it hard to make good decisions and save time.

Newer accounting software that runs in the cloud has many valuable features, such as AI and business intelligence.

These more advanced systems can automate manual tasks, help people work together, and connect to other business systems to make them more efficient.

Cloud-based systems can benefit any logistics company dealing with a wide range of transactions and many moving parts.

While there are many companies you can get software programs from, each company is unique to the other.

A good rule of thumb is to take your time to research and find a reputable company with the software you are after. Working with a company specializing in software programs for shipping and logistics companies will be even better.

Besides the cost, support is another vital factor to consider when buying software. You want to get your software from a company you are sure will support you should there be a problem.

The last thing you want is to want to handle the accounting tasks, yet you can’t use the software because it’s faulty, and you can’t access the necessary support.
A good rule of thumb is to work with a company providing 24-hour support on its programs.

 

 

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