Expense Allocation
Jennifer edwards Expense allocation is a process of assigning indirect costs to the cost objects within the business. A cost object is an entity or any other thing with the help of…
What are Stock Repurchases?
Stock Repurchases is a process of buying back shares from the investors of the business. There are a number of reasons due to which a company undergoes repurchase process. Sometimes…
No Par Value Stock
This a type of the common stock that is issued without having a par value on the face of the stock certificate. As we know that the par value is…
Earned Capital
The net income of a business is sometimes given the name of the earned capital and may be referred to the retained earnings of a business that is left with…
Negative Retained Earnings
As we all know that retained earnings are the earnings that are left with the business after paying dividends to all the share holders from the profit earned by the…
Driving Inventory Balance
Sometimes a business doesn’t have exact inventory balance or inventory level at a certain period of time. In such cases the inventory balance can be derived by using current liabilities,…
Defensive Interval Ratio
Defensive interval ratio is a variation of the quick ratio. The ratio uses the same figures used by the quick ratio to determine whether a business has an ability to…
How to Calculate Average Accounts Payable
Accounts payable is one of the most important financial figure in a firm’s accounting and is used to calculate a number of other financial figures such as current ratio, working…
Transaction Error Rate
It is quite common to observe transaction error while conducting the financial transactions. The cost of correcting these errors is far greater than the cost of prohibiting these errors initially.…
Sales to working Capital Ratio
In order to generate and maintain sales a business needs to invest some of its working capital. This working capital is invested in accounts receivable and the inventory of the…
Return on Capital Employed
The return on the capital employed is a financial indicator that is used to measure the proportion of adjusted earnings of the business to the amount of capital and debt…
Reorder Level
Reorder Level is a term related to refilling the inventory. It is the level where a business, company or firm should order for a new purchase or start manufacturing a…
Accounts Receivable Collection Period
The accounts receivable collection period can be defined as a period that is required to collect the accounts receivables for a business. In order to calculate the accounts receivable collection…
Accounts Payable Days
Accounts payable days is the measure of the number of days that a company needs to pay its suppliers. If the number of days required for the payment increase from…
Sales Backlog Ratio
The Sales Backlog Ratio is a financial measurement of the ability of a business to maintain the current level of the sales of the business. This ratio is recorded on…
Classified Balance Sheet
A classified balance sheet is a kind of balance sheet in which the assets, liabilities and equity accounts are further categorized into sub accounts or sub categories. The classification of…
Return on Operating Assets
The return on operating assets is a financial ratio that deals with the measurement of revenue that is generated only from those assets that are actively being used. The major…
Computerized Accounting
A computerized accounting system is a automated accounting system where the use of computer technology is used to manage the accounting processes of a business. A computerized accounting system is…