The involuntary conversion of an asset occurs when an asset must be disposed of due to unforeseen circumstances, such as theft, casualty, or condemnation. The forced disposal of the asset may result in cash proceeds from the filing and payment of an ... Read more
Due to the practical difficulties of using actual costing, many companies instead utilize a normal costing system to obtain a close approximation of the costs on a timelier basis, especially manufacturing overhead costs. Direct materials and direct l... Read more
Report your result as “Net sales” below the sales discounts line on your income statement. The amount of net sales is the actual revenue you earned after accounting for discounts. Using the previous example, assume you had $20,000 in gros... Read more
Salary is also affected by the number of people available to perform the specific job in the employer's employment locale. Company Performance BonusesOccasionally, some companies like to celebrate excess earnings and profits with their staff collecti... Read more
The expense is then transferred to the profit and loss statement for the period during which the company uses up the accrual. Upon signing the one-year lease agreement for the warehouse, the company also purchases insurance for the warehouse. The com... Read more
Cash equivalents are also generally included with cash on a business’s financial statements. They are securities that can easily and quickly be converted into cash. For an investment to be considered a “cash equivalent,” it must mat... Read more
Each of these columns or sections is further broken down into categories. Insurance Expense is part of operating expenses in the income statement. Expired insurance premiums are reported as Insurance Expense. Accounting has many classifications for d... Read more
Overview of what is financial modeling, how & why to build a model. This lesson will concentrate on the acquisition of property, plant, and equipment. Accounts receivable is the balance of money due to a firm for goods or services delivered or used b... Read more
On the other hand, when a utility customer pays a bill or the utility corrects an overcharge, the customer's account is credited. This is because the customer's account is one of the utility's accounts receivable, which are Assets to the utility beca... Read more
The terms and conditions set forth in an irrevocable letter of credit are fixed, and can only be changed with the express agreement of all parties involved. An irrevocable letter of credit is when an bank representing an importer agrees to pay the se... Read more
