June 05, 2021
Charles LutwidgeLIFO Reserve Explained with Example
Definition It often happens that companies choose to have the accounting records to be maintained based on methods that are not allowed by the law to be used for reports meant for tax returns or financing. Yet, these methods often...
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June 04, 2021
Charles LutwidgeWhat Is the Payback Period?
The return on investment comes with complex planning, accounting, calculation, and analysis process. To get a return on investment, you need to have experience and certain knowledge, otherwise, this task will be very difficult. Each investor is interested when their...
June 03, 2021
Charles LutwidgeUnits of Production Method of Depreciation: Explanation and Calculation
Definition One of the main tasks of the business owners, especially in the current conditions, is to preserve the financial capabilities of the enterprise – to pay wages, vacation and other payments to employees, taxes to the budget, and solve...
May 29, 2021
Charles LutwidgeAn Easy to Understand Explanation of a Debit Memo with an Example
Overview When dealing with merchandise inventory, some of the new terminology you might come across is debit and credit memo. What exactly does a debit memo mean? When a buyer purchases something from a business on a credit, both make...
May 28, 2021
Charles LutwidgeWhat Are Investing Activities in Accounting?
Definition Investing activities are a type of cash flow activities. Accordingly, you will see an investing activities section in the cash flow financial statement. They reflect changes to fixed assets, meaning transactions that increase and decrease the company’s long-term assets....
May 27, 2021
Charles LutwidgeStockholders’ Equity
Definition Any enterprise, be it an international corporation or a small local store, has some resources necessary for its operation. But what is stockholders’ equity? You can come across this concept both on the pages of textbooks on economics and...
May 26, 2021
Charles LutwidgeAbsorption Costing in Accounting
Definition Absorption costing is a costing method that does not just account for the direct costs in the calculation of the cost of goods. In other words, the cost of each unit of a product with this method includes the...
May 25, 2021
Charles LutwidgeTrade Discount Explanation with Example
Definition The idea of giving a trade discount is frequently used in the supply chain. A trade discount is usually a percentage reduction in the price of merchandise granted by the manufacturer to the wholesaler or the wholesaler to the...