ALL THINGS ACCOUNTING, TAXES, AND RELATED TOPICS

Navigating the financial intricacies of real estate investments, particularly rental properties, can be a complex endeavor. Among the key considerations for landlords are operating expenses and capital expenses, which play a significant role in determining the overall profitability of a rental property. Operating Expenses: The Ongoing Costs of Property Ownership Operating expenses represent the ongoing costs associated with owning and maintaining a rental property. These expenses are incurred on a regular basis and are directly related to the property's operations, such as: Property taxes: Assessed by local governments, property taxes are based on the assessed value of the property. Salaries and wages: Compensation paid to employees for their services. Insurance premiums: Landlords typically purchase insurance to protect against potential risks such as property damage, liability, and lost rent. Maintenance and repairs: Maintaining the property in good condition is crucial...

Cost of Goods Sold (COGS) and Cost of Goods Manufactured (COGM) are two important accounting concepts for businesses that produce or sell physical goods. While they are related, there is a key difference between the two. As mentioned in our previous blog Cost of Goods Sold: Only for Inventory-Based Businesses , COGS (Income Statement line item) comes from Inventory-on-hand (Balance Sheet line item) and typically it simply is the wholesale cost of the merchandise or inventory that was sold to customers. It includes the cost of direct materials, direct labor, and overhead costs. COGS is deducted from revenue to calculate gross profit, which is a key measure of profitability. COGM is the total cost of producing all finished goods during a given period. COGM then becomes part of the Inventory-on-hand (Balance Sheet Item) dollar amount. A COGM report is an internal management report. It is not part of the external financial statements presented to the public, investors, banks, and other...

Cost of Goods Sold (COGS) is an important accounting concept for businesses that sell physical goods. It represents the direct costs associated with producing or acquiring the goods that were sold during a given period. COGS is deducted from revenue to calculate gross profit, which is a key measure of profitability. What is COGS? COGS (Income Statement line item) comes from Inventory-on-hand (Balance Sheet line item) and typically it simply is the wholesale cost of the merchandise or inventory that was sold to customers. Taking a deeper look, you can also say that COGS includes the following costs: Direct materials: The cost of raw materials that are directly used in the production of goods. Direct labor: The cost of labor that is directly associated with the production of goods. Overhead costs: Certain indirect costs associated with the production of goods, such as factory rent and utilities. Why COGS is important for inventory-based businesses COGS is impo...

In-kind donations are non-cash gifts made to nonprofit organizations. They can include goods, services, time, and expertise. Individuals, corporations, and businesses can all make in-kind donations.   For donors, in-kind donations can be a great way to support the nonprofits they care about, even if they don't have the financial resources to make a cash donation. In-kind donations can also be a more tangible way to give, as donors can see the direct impact of their donation on the nonprofit's work.   For nonprofits, in-kind donations can be essential to their operations. They can help nonprofits to save money on goods and services, expand their services, and reach more people in need.   Here are some of the benefits of in-kind donations: Flexibility:  In-kind donations can be more flexible than cash donations. For example, a nonprofit that provides food to the hungry may need specific types of food at a particular time. A donor can donate those specific items...

Nonprofit and governmental organizations often receive donations and grants that are restricted to being used for specific purposes. These restricted funds can be a valuable source of funding for organizations, but it is important to understand the different types of restrictions and how to manage them properly. Types of Restricted Funds There are two main types of restricted funds: temporarily restricted funds and permanently restricted funds . Temporarily restricted funds  must be used for a specific purpose, but the restriction expires after a certain period of time or when the purpose is achieved. For example, a donor may give a gift to a nonprofit organization to be used for a specific program or project. Once the program or project is completed, the organization can use the remaining funds for any purpose. Permanently restricted funds  must be held in perpetuity and used for a specific purpose. The principal of the fund cannot be spent,...