Category: Bookkeeping

A positive NPV suggests the investment will be profitable, as the present value of earnings exceeds the costs. Conversely, a negative NPV suggests a net loss, and the project should be rejected. An NPV of zero means the project is expected to earn exactly its required rate of return. The final input is the number…

Because you’ve been paid ahead of time, your company has a liability equal to that unearned revenue until you fulfill your end of the bargain. It’s like holding onto a friend’s concert ticket—you’ve got it, but it’s theirs when the show rolls around. Typically, unearned revenue is considered a current liability because you’ll settle this…

Interest from these bonds is taxable at both the federal and state levels. Because these bonds aren’t quite as safe as government bonds, their yields are generally higher. Companies can issue bonds, but most bonds are issued by governments. Because governments are generally stable and can raise taxes if needed to cover debt payments, these…

They bring the balance sheet accounts to their carrying values in order for companies not to overstate their financial position. The LIFO method in valuation accounts values inventory based on the assumption that the most recently acquired items are the first ones sold, affecting financial statement values. Organizing your business’ finances into the correct set…

How to Calculate Income Summary for Closing This action zeros out these accounts, preparing them to accumulate new balances in the subsequent accounting period. I imagine some of you are starting to wonder if there is an end to the types of journal entries in the accounting cycle! So far we have reviewed day-to-day journal…

For example, the entry might record a sale worth X dollars on the credit side, and X dollars worth of inventory delivered to the buyer on the debit side. https://velopyrenees.fr/bookkeeping/stock-dividends-and-splits-financial-accounting-2/ The totals of the debit column and the credit column are not recorded in each column, only the final balance is recorded. Rather than use…

Cost of goods manufactured schedule These cutting-edge solutions enable manufacturers to monitor components with exceptional precision, fostering an environment that is both more productive and competitive within the industry. This separation between them is essential for precise financial documentation and developing a robust pricing approach. My Accounting Course  is a world-class educational resource developed by…

Ensuring accuracy in your Bill of Materials requires double-checking all listed items and quantities and confirming that all components work together correctly. Use quality assurance inspections during production as well as additional measures such as supplier performance monitoring for further accuracy in your BOM. The BOM should consider the quality of the parts and materials…

Activity-based costing is the most accurate, but it is also the most difficult and costly to implement. It is more suited to businesses with high overhead costs that manufacture products, rather than companies that offer services. Companies that manufacture a large number of different products prefer an activity-based system because it gives more accurate costs…

grammar It was the best ever vs it is the best ever? English Language Learners Stack Exchange When I see a colleague of mine writing such a phrase, I usually point out that it is a kind of old-fashioned affected valediction which, probably, nowadays, a native English speaker wouldn’t write. In the context of a…