*Blackwell Part 2 Flashcards
what percent of revenue do credit card merchant fees typically make up?
1.5-2.5%
what are some “forgotten costs” of doing business in a vet hospital?
credit card merchant fees, bad debt, CE, finances charges for buying a practice/equipment, staff turnover, staff management, overtime, free/discounted services
define depreciation
cost to acquire capital assets to expense over the useful life of the asset, AKA loss in an assets value over time
define fair market value
price a willing buyer would pay a willing seller for something
define intrinsic value
the decided upon worth of an asset by the practice owner, including how an asset generates value to the practice
define net book value
historical asset cost minus total depreciation since purchase date
what type of depreciation is most commonly understood and easiest to implement?
straight line depreciation
define section 179 depreciation
tax provision that allows small businesses to claim a deduction for an asset in the first year of use
maximum election = $500K
what kind of depreciation uses a 200% declining balance method for 3/5/7/10-year property and straight line for 27.5/39-year real estate?
MACRS (Modified Accelerated Cost Recovery System)
what is the limit of depreciation that can be written off for a vehicle?
$3160
define accrual accounting
accounting based on when a service is performed and expense earned
define cash based accounting
accounting based on when a transaction actually occurs
what principle requires the use of accrual accounting and describes the principles that govern the preparation of financial statements?
Generally Accepted Accounting Principles (GAAP)
if you are a sole proprietor, what is the benefit of hiring your <18 year old children in your practice?
you are exempt from the Federal Insurance Contributions Act (FICA), Medicare, and unemployment taxes
if a shareholder DVM employed in an S-corp proved DVM services to that S-corp, then reasonable compensation is required to be paid before any non-wage distributions, which is classified as ________.
return of capital
