March 30, 2021
Charles Lutwidge
Cost Principle Definition and Role in Accounting
Definition The definition of cost principle is a rule according to which business transactions are reflected in the accounting documents in accordance with their value at the time of the initial transaction (the cost paid to purchase the asset), and...
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March 30, 2021
Charles Lutwidge
A Simple Guide to Payroll Accounting
What is Payroll Accounting? Payroll is a process of calculating workers’ salaries, tax deductions, and paying them. Here are the basic steps you would follow in payroll accounting: Calculate and report an employee(s) gross pay Calculate employee(s) deductions Calculate employer(s)...
March 30, 2021
Charles Lutwidge
What Does Goodwill Mean in Accounting?
What Is Goodwill? Business acquisition When you are buying a business, you have a purchase price of $80,000. When you look at the company’s reports, you see that its tangible assets (plant, machinery, land, buildings, equipment, stock, and so on)...
March 30, 2021
Charles Lutwidge
Introduction to Pro Forma Financial Statements
Balance sheet, Income statement, and other financial reports is something that most individuals that deal with the business world are familiar with to some extent. As you might know, financial statements are usually prepared based on the accounting records for...
March 30, 2021
Charles Lutwidge
Meaning and Example of Credit Memo
When dealing with merchandise inventory, you might hear the term credit memo. What is the definition of a credit memo? What are these memos for? Let’s get to the bottom of it. Definition and meaning The definition of the term...
March 30, 2021
Charles Lutwidge
Activity-Based Costing
Definition and Explanation The definition of activity-based costing is a management accounting approach to the costing and monitoring of activities which involves identifying the activities the bring about specific costs. It is a costing system that focuses on activities performed...
March 30, 2021
Charles Lutwidge
Standard Costing Meaning and How It Works
Definition What is the definition of standard costing? This is an accounting system based on the determination in advance of what the good should cost to produce and revenue per unit. In other words, the standard cost is a cost...
March 30, 2021
Charles Lutwidge
Plant Assets: Explanation and Examples
The effective functioning of a company is possible with the availability of certain economic resources used for the production of products or the provision of services. In the financial world, everything that a firm has and uses in production is...
