March 30, 2021
Charles Lutwidge
Process Costing Explanation and Example
Definition When we assign a cost to a product, we can use job costing if it is a unique product or a service and we can assign the costs directly. In some cases, though, it is going to be too...
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March 30, 2021
Charles Lutwidge
What is Net Realizable Value? How to Calculate NRV?
Inventory values can fall over time, especially for items that are subject to stiff competition or the life cycle of the product declines with time. Thus, we need a way to accurately reflect the true financial value of such assets....
March 30, 2021
Charles Lutwidge
Simple Explanation of SG&A Expenses
Definition Selling, general, and administrative expenses is an accounting term that you will see on the Profit and Loss report. What exactly are these expenditures? It is actually very close to its name. The definition of SG&A is the sum...
March 30, 2021
Charles Lutwidge
Break Even Point: What is it and Why is it important?
Definition The main purpose of a business is to make a profit, which is the main source of finances for the current activities of the enterprise and its future development. Since profit plays a major role in the company’s activities,...
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...
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...
