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Category Archives: Accounting

Leveraging and personal finance

Dave Ramsey definitely caters to a particular audience. That is an audience that has little control over their spending and little, if any, financial intelligence. But I’d be very surprised if Ramsey has never encountered the term “leveraging“. I’m very sure he has. It’s a term that is very common in business finance, but the […]

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Accounting for Fractional Reserve Banking

Fractional reserve banking. “Creating money out of thin air”. Debasing the currency. It can certainly be a confusing concept. Banks we are told have the ability to create money “out of thin air”, and they do this through loans, thus keeping the actual money creation linked to an actual demand for that money. How this […]

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Misunderstanding profit

When it comes to business reports, the concept of profit has to be one of the most misinterpreted items on a company’s balance sheet. What is it, what does any particular number mean, and why are some companies posting insane profit numbers while not “sharing the wealth”? Well let’s get into this. Now “profit” is […]

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Why are forgiven debts treated as income?

Why are forgiven debts treated as income? After all it doesn’t really make sense: you don’t actually receive any money when debts are written off, but the IRS may require you to report it anyway. There are a lot of articles on the Internet that tell you that canceled and forgiven debts are considered income, […]

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