A fixed direct cost might be the salary of an employee who performs direct labor. Besides indicating cost efficiency, direct cost is also valuable for other functional business areas. Imagine being a product manager and needing to price a new product. Everything You Need To Build Your Accounting Skills You should know what range your …
This would not include activities such as interest payments, taxes, and other non-operating revenues and expenses. Gross profit is the number you get when you take your revenue and subtract your cost of goods sold (COGS). It is calculated at a different stage of the income statement than net income. In that case, those businesses …
It also allows for the conservative and appropriate recording of assets for a business. Are you a business owner looking to complete the eventual sale of equipment or inventory? Are you an accountant trying to assess the value of your client’s assets? After subtracting the selling costs ($40.00) from the market value ($120.00), the NRV …
Investors, savers, or borrowers can take nominal rates with different compounding periods (i.e. one that compounds weekly, one that compounds monthly) to see which will be most beneficial to them. In this context, the EAR may be used as opposed to the nominal 3 ways to write a receipt rate when communicate rates in an …
To properly account for deferred revenue, businesses must follow specific regulations and guidelines, ensuring that they are compliant with legal, tax, and reporting requirements. Deferred revenue is money that you receive from clients or customers for products or services that you haven’t delivered yet. In accounting, deferred revenue can affect your balance sheet and profit …
What is Deferred Revenue and Why is it a Liability? Read More »
This is why the land is an exemption in the computation of the price of a building. As time passes by, buildings are valued, accounting for depreciation. Depreciation in a building is in the form of fading painting, rust of steel parts, and loosening of movable parts like doors and drawers, among others. To make …
Fixed Asset Accounting Explained w Examples, Entries & More Read More »
