A limited partner is a member of a partnership and as such incurs limited responsibility of the partnership’s obligations. The limited partner’s liability is limited to the amount of their individual investment in the partnership. Also a limited partner is not allowed to take an active part in the management of the partnership.
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Archive of posts filed under the Bookkeeping Articles category.
Limited Partner
Simple Interest
Interest computed on only the original principal. For example a deposit into a savings account that accumulated simple interest of 3% would only have the interest yield a yearly amount of $30 ($1000 x 3%) and interest would not be paid on the interest that accumulates in the account. Simple interest computation is [...]
What Is GAAP?
GAAP stands for Generally Accepted Accounting Principles and represents standards, conventions and rules to be followed by accountants in recording and summarizing financial transactions and preparation of financial statements. These rules and standards come from various authoritative organizations and documents such as the AICPA, FASB statements, APB opinions, AICPA Accounting Research Bulletins and the [...]
Revolving Fund
An account that is funded, used and then replenished and the cycle starts all over again. The most common example of this type of account is a Petty Cash Fund. A Petty Cash Fund is set up with a designated amount of money. Through out a period of time the fund is [...]
Note Payable
A Note Payable is a written document that commits the signer to repay a designated amount of money loaned within a future prescribed time. The terms of the note will include the principal portion of the loan plus a stated rate of interest. The note might also a schedule of payment dates and [...]
Cash Basis Accounting
Cash Basis Accounting is a method of recognizing income and expenses when cash is received or spent not as they are incurred. For example using a cash basis you would recognize income not when you sent out an invoice but when payment was actually received by you. Likewise, you would recognize an expense [...]
Direct Material
Direct material costs represent all expenses that become a part of a finished product and are posted to a work-in-process inventory cost account which resides on the balance sheet. When the product is sold then the unit cost of each item item sold is transferred from the work-in-process inventory cost to a cost of [...]
What Is A Good Bookkeeper Worth?
I am often asked what is a reasonable fee to charge my clients. And on the opposite side of the coin – what should I expect to pay for a bookkeeper? A bookkeeper who is honest, trustworthy, reliable and knowledgeable is worth their weight in gold. You might find a good honest [...]
Fiscal Year
A fiscal year is defined as the twelve consecutive months in which a business reports on its business financial operations. It is typical for a business to use the calendar year as their fiscal year which means their year runs from January 1st through December 31st. However many businesses use a fiscal year [...]
Land Improvements
These are assets that have limited lives including walkways, driveways, fences and any other improvements to the land mass. They are subject to depreciation and should be recorded in a separate account than the purchase cost of the land.
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Operating Revenue
Operating Revenue is defined as net sales plus any other regular income sources that are part of the normal business activities of the company.
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Promissory Note
A legal, formal written document promising repayment of a definitive sum of money with payments terms defined as on demand or for a specified date. The maker of the note is the person who signs the note and commits to the terms of the note. The person to whom the repayment is promised [...]
