Absorbed Cost Explained
Jennifer edwards Absorbed cost in a business can be defined as the indirect cost related to the manufacturing of products of the business. In order to understand absorbed cost let take an…
How to record Intangible Assets of a Business
An intangible asset of a business can be defined as an asset that do not exist physically like other assets but have equal importance in profitable performance of a business.…
Financial Accounting Vs Managerial Accounting
Financial accounting and managerial accounting are two different but equally important branches of accounting. Overall accounting includes calculation of financial figures such as tax, profit, expenses, income and many others.…
Business Benchmarking
Business bench marking is a procedure of increasing overall efficiency of the business that may result in increase in your profit. Sometimes you may not be aware that your business…
Depreciation in context with Income Statement and Balance sheet
Depreciation is one of the basic accounting terms that is applied to the degree of wear and tear that happens to a firm’s assets. With the help of depreciation accountants…
General Ledger
General Ledger General ledger is one of the basic entity is the basic accounting cycle that is used to store transactions that are further used in income statement and balance…
Statement of Retained Earnings
Statement of retained earnings is also a financial statement like income statement and cash flow statement. This statement records the changes in the retained earnings of a company for a…
Basic Accounting Terminologies
As we know the process of accounting is that of recording monetary transactions of a business in an organized and transparent form and to prepare financial statements related to assets…
Retail Inventory Method
As we all know an inventory is a detailed record of all the stored goods or items business posses for a certain period of time. Inventory gives the status of…
Contribution Margin Explained
It can be defined as the marginal profit earned by a firm or a business at the sale of each unit of the product. Contribution margin is used to measure…
Debit and Credit Explained
As we all know that accounting is an art of recording and writing down monetary transactions in organized and disciplined form. Modern day concepts of accounting were introduced by Luca…
Calculating Net Income after Taxes
Net income of a company is the overall income that is left with the company at the end after subtracting expenses, losses, interest, costs, depreciation and taxes from the revenue…
Principles of Revenue Recognition
Principle of revenue recognition is also included in general accounting principles with other common principles. This is one of the basic principles of accrual accounting. According to this principle the…
Explaining Unearned Revenues
Unearned revenue can be defined as the cash piles that are generated due to several business transactions however is are not actually earned by the business. For example advance payments…
Trial Balance Sheet
A trail balance sheet is one of the most important financial documents of the double entry system. Trial balance of a business can be done at any time of the…
Difference between the Equity and the Cost Method of Accounting
These are two different methods of accounting that are used in different circumstances and situations. The equity method of accounting is used when the influence and control of the firm…
Accounting Profit Formula Explained
Accounting profit formula is used to calculate profit that incurred after selling the goods. Profit can be defined as the difference between the cost price and the sale price of…
Explaining Assets in terms of Accounting
Whenever we analyze or examine the balance sheet of a company the first heading that comes is that of current assets. Current assets may be referred to cash or other…