Jennifer Archive
As the name indicates variable costs are the costs that fluctuate or change with the number of goods produced by the business. Variable costs along with the fixed costs comprise the total costs of the goods produced. Variable costs change with the percentage of
There are a number of inventory valuation methods that can be used according to the business requirements and managerial decisions. Inventory valuation methods are named as LIFO, FIFO and they have a negative or a positive impact on the financial performance of your
It is a type of costing method in accounting where the alternatives are compared and their difference is calculated to consider. Relevant costing technique helps managers to make decisions on certain issues such as whether the components of goods should be bought from vendors
Cost volume profit analysis is a method of analyzing the affect of transition of cost and volume on the net income and operating income of a business. It is a method of cost accounting and is used to make short term financial decisions regarding
A balance sheet is a financial statement of a business that can be use for internal and external purposes. The preparation of both internal and external balance sheets is for different uses and they are intended for completely different audiences. For example internal balance
There are different kinds of financial statements for reporting cash flows in a business such as income statement and statement of cash flows. These cash flows statements are different from balance sheet in a respect that they report the flow of cash for a
Account receivable is an integral account for the businesses that make sales on credit. A business may have thousands of account receivables from hundreds and thousands of customers. All the details of account receivables are stored in a summarized from in an external balance
Intangible assets are those assets that do not exist physically still they are very much important for a business. These are the long term resources that do not have a physical character but add value to a business. Examples of intangible assets are the
It is very important to distinguish or differentiate business costs as they help in recognizes the cost figures that your business produce by selling goods or services. There are different types of costs such as direct costs, indirect costs, fixed costs, variable costs,
A change in assets or liabilities of a business can positively or negatively affect the cash flow of the particular business. Sometimes change in assets and liabilities may result in some serious problem in the financial matters of a business. For example a change
Accounting equation can be termed as the foundation stone of the modern day accounting. The financial position of a business is affected by its financial transactions and these financial transactions are measured by following parameters called assets, liabilities and owner’s equity. The accounting equation
Accounting Methods Accounting methods are the set of rules or specific procedures through which a business keeps its financial records and transform these records into financial reports. Accounting methods are categorized in two categories the cash base accounting method and accrual based accounting method.
For a business or a company the chart of accounts may be described as an index or list of those financial accounts that a business utilizes in its accounting system and later posts to the ledger. Chart of accounts helps a company to
Understanding an accounting cycle can be one of the most interesting things in the basic accounting. The workflow of accounting is always circular so it is recommended to understand the accounting cycle to implement effectively at your own business. The first step in this
A budget can be defined as a written estimate of the future financial performance of a business, project or a particular financial unit. With the help of budgeting one can effectively deploy financial resources, equipment and workforce to the business and can estimate the
Maintaining the record of financial transactions and financial day to day business activities is called bookkeeping. The basic purpose of bookkeeping is to maintain the financial records of a business clean, transparent and up to date. Bookkeeping provides the basic financial information which later
Expense can be explained as costs or expenditure maintained by a company for a certain accounting period to earn certain amount of revenues. Mostly expenses are incurred through the operating activities of a company. In terms of accounting expense is exactly opposite of that
Revenue of a company is the total sum of money that a company actually holds. It may be received by providing services of by selling particular merchandise of the company. In simple words revenue may be called as the gross income of a company.