Reconstructing revenue - net worth and bank deposit methods
Not what you're looking for?
Please read and give your thoughts on.
While the net worth method focuses on the balance sheet and the increase in net worth for the year the bank deposit method looks at the money deposited and withdrawn throughout the year. The bank deposit method provides an ability to reconstruct gross revenue rather than adjusted income. The bank deposit method is appropriate when most of the income is deposited in banks and most of the expenses are paid by check.
Purchase this Solution
Solution Summary
This solution compares the net worth method with the cash deposit method as a means of reconstructing gross revenue.
Solution Preview
The above statement is true. Basically, what would be analyzed by the above includes any and all activity coming into and going out of the bank. The advantages to this method is that all deposits are accounted for. The business owner or individual cannot state that they made $30,000 in gross receipts when deposits for the year total $60,000, assuming that all deposits are business ...
Purchase this Solution
Free BrainMass Quizzes
Situational Leadership
This quiz will help you better understand Situational Leadership and its theories.
Balance Sheet
The Fundamental Classified Balance Sheet. What to know to make it easy.
Marketing Management Philosophies Quiz
A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.
Lean your Process
This quiz will help you understand the basic concepts of Lean.
Cost Concepts: Analyzing Costs in Managerial Accounting
This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.