While an income statement can tell you whether a company made a profit, a cash flow statement can tell you whether the company generated cash. A balance sheet shows a snapshot of a company’s assets, liabilities and shareholders’ equity at the end of the reporting period. It does not show the flows into and out of the accounts during the period. A company’s balance sheet is set up like the basic accounting equation shown above. On the right side, they list their liabilities and […]
There are different types of businesses, but one thing they all have in common is that they must provide consumers with services, products, or both. Learn the definition and characteristics of a business, and explore some real-life examples of businesses. Job cost sheet is a document used in a job-order costing system to record all the costs incurred on a job. In addition to job identification details such as job number, customer name, etc., it includes particulars of direct material, direct (m […]
GDPR requires data controllers and processors based within the EU must appoint a DPO to assist in monitoring their internal compliance. The DPO is usually appointed from the organisation ’s staff and must have expert knowledge of data protection laws and practices. If an appropriate individual is not found within the organisation, they may hire a third-party contractor to act as a DPO. However, the DPO may not hold a conflict of interest and must be impartial in carrying out their role. I […]
As noted above, expenses are almost always debited, so we debit Wages Expense, increasing its account balance. Since your company did not yet pay its employees, the Cash account is not credited, instead, the credit is recorded in the liability account Wages Payable. Purchase discount is an offer from the supplier to the purchaser, to reduce the payment amount if the payment is made within a certain period of time. For example, a purchaser brought a $100 item, with a purchase discount term 3/10, […]
Outstanding shares are simply shares that have been bought by stockholders. So, common shares outstanding refers to the number of shares of common stock that have been purchased by stockholders. To figure out the number of common shares outstanding, we’ll usually have to do a little extra math, using the information in the stockholder’s equity section of the balance sheet. On the balance sheet, it will tell us how much money the company received for selling common shares, along with […]
Therefore, the cost driver for your business was products returned by customers. It is hard to determine the exact basis for the cost drivers to get the actual costs, which will defeat the ultimate goal of the business to find the actual cost of the product. These are an advantage for a product as they bring out the actual cost incurred on the products based on the correct allocation of the processes or activities. We are going to look at the following example in order to get a clear picture of […]
Regular audits of the inventory are carried out to check the frequency of stock-outs of different items. Advanced modelling tools and frameworks are used to determine the economic order quantity that will minimize the stock out and also the inventory carrying cost. A shortage of working capital may limit the value of orders that can be placed each month. This could be caused by poor cash flow management or other inventory issues such as too much cash (more…) […]
The members of the credit unions are the ones that own accounts in the institution; hence, the depositors are also partial owners and receive dividends. A depository allows traders and investors to hold securities in dematerialized form; thus, eliminating the risk related to holding physical financial securities. The buyers and sellers now do not need to check whether the securities have been transferred successfully without any loss or theft. The depository system reduces such risks by allowin […]
All acquisitions of raw materials are recorded in a raw materials control account when purchased. Additionally, it needs reliable suppliers that can always deliver parts quickly, and the ability to efficiently assemble machines that put together its vehicles. Other methods for eliminating waste and saving storage costs is by using dropshipping or consignment inventory. You can compare these two inventory models and see what might work for your business so you can focus on growing sales. The pro […]
When a company uses the weighted-average method and prices are rising, its cost of goods sold is less than that obtained under LIFO, but more than that obtained under FIFO. Inventory is not as understated as under LIFO, but it is not as up-to-date as under FIFO. A company can manipulate income under the weighted-average costing method by buying or failing to buy goods near year-end. However, the averaging process reduces the effects of buying or not buying. An inventory valuation allows a compa […]
