Cost of Credit
Jennifer edwards The cost of credit is a financial calculation that is done to find out the cost of the discount that a business is going to offer on an early payment.…
Liquidity Index
The liquidity index is a financial indicator that is used to indicate the number of days required by a company to convert its trade receivables and inventory into cash. The…
Basic Accounting Principle
There are a number of basic accounting principle that contains norms and rules according to which accounting is conducted within a business. A few of these principles can be explained…
Writing Off a Bad Debt
Whenever a customer invoice is tagged as uncollectible this means that the amount receivable is not going to be received and is converted into a bad debt. If an invoice…
Time Value of Money
The concept of time value of money states that the cash received today at this point of time is more valuable as compared to the cash received in future at…
Variable Annuity
Variable Annuity is a kind of retirement annuity as it offers death benefits and other integrated features associated with death benefits. Most of the insurance companies offer variable annuities under…
Annuity Due
Annuity Due can be explained as a series of payments that posses certain characteristics as compared to the other form of the payments. The first characteristic of this kind of…
The Sales Tax Calculation Process
Sales tax is a kind of tax that is to be paid by the consumer and the seller receives it on the behalf of Government and has to pay all…
Back flush Accounting
Back flush accounting is a type of accounting where the accounting procedures are not conducted until the final manufacturing of the product is not completed. After the completion of manufacturing…
Beginning Inventory Explained
Beginning Inventory can be defined as the recorded cost of the inventory at the beginning of every accounting period. In other words beginning inventory can be defined as the cost…
Mixed Cost
Mixed cost is a cost that contains both the fixed cost and a variable cost component. It is important to understand the mixed cost so that one can find out…
Ending Work in Process
Work in Process is a kind of inventory in which all the goods are near to be finished but still some work needed to be done to count these goods…
What is an Inventory Change?
The aggregate difference between the all types of inventory of the last reporting period and the current reporting period is called inventory change. In most of the companies where the…
How to calculate Efficiency
The efficiency is the comparison of the output to the input of a given operation. This means that what is the ratio between the given output and the input of…
How to Account Warranties
Every business has a warranty or claim policy under which a business promises to its customers that it will repair or replace the defective or broken goods within a certain…
Deferred Compensation
Deferred compensation is a type of employee compensation that depends upon the performance of the employee. The arrangement of deferred compensation depends upon the time period for which it is…
Asset Retirement Obligation
Asset retirement obligation can be defined as a liability that has to be fulfilled by a firm on the retirement of certain fixed asset. The most common example of asset…
Standard Costing
Standard costing is an accounting technique where the actual cost is substituted with standard costs or expected cost in the accounting records. After recording the costs the next step is…