April 12, 2021
Charles Lutwidge
Contribution Margin Explanation and Importance
What is the contribution margin? There are two ways to look at contribution margin. One way would be that it is the money that is used to pay off fixed costs. Another way to look at it is that contribution...
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April 12, 2021
Charles Lutwidge
What Is Going Concern Principle?
Going concern is one of the easiest to understand accounting concepts but at the same time an important concept that every business entity should apply. This concept becomes even more important when considering the current events and conditions around the...
April 09, 2021
Charles Lutwidge
What does MM mean? Explanation and Examples
Financial documents are an important part of success in the financial world. Thus, being able to accurately read financial statements is crucial if you are a business owner, an investor, or an individual who interacts with financial documents in one...
April 09, 2021
Charles Lutwidge
Direct vs Indirect Cash Flow Statement Preparation Methods
Cash Flow Statement Cash is a valuable resource for every organization. The movement of funds accompanies and supports almost all aspects of the economic activity of the enterprise. To effectively manage cash flow, you need to know its amount, its...
March 30, 2021
Charles Lutwidge
Accumulated Depreciation Explanation and Calculation Example
Definition Fixed assets are subject to gradual depreciation during their use, so they gradually transfer their value to finished products or rendered services. Depreciation is defined as the process of deterioration of fixed assets due to their use or obsolescence....
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...
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...
