Contra Asset Examples, How a Contra Asset Account Works

As mentioned, contra asset accounts are usually listed below their matching asset accounts, and the net values of those assets are written next to the contra accounts. In the books, the account of the asset would have a debit value of $100,000, and the contra asset account would have a credit value of $30,000. If […]

Best Businesses To Start In A Recession In 2023

Other recession-proof businesses will also require occasional repairs through a recession. The food industry can be very resilient during times of economic hardship. Not only do people need sustenance to survive, but food can also offer comfort and familiarity during times of stress. You can take certain strides to ensure that your business is recession-proof. […]

How to Make Payroll Journal Entries: A Small Business Guide

For example, a company pays its hourly employees once a month, on the last business day of the month. The company controller records this amount as a debit to wages expense and a credit to the wages payable liability account. The entry is set up as a reversing entry, so the accounting software automatically cash […]

Expense Wikipedia

This expense is recorded on the income statement and decreases the company’s net income. Even if something qualifies as an expense, it is not necessarily deductible. To see if taking your mortgage deduction is worth it, use Schedule A of your tax return to detail all your potential itemized deductions. You can also meet with […]

Days Sales Outstanding DSO Ratio Formula Calculation

Using the formula above, calculate your average DPO based on your most recent balance sheet numbers. Using these metrics in concert with other activity metrics (such as a quick ratio) helps paint a full picture of the data contained in financial statements for data-informed decision-making. The result of these two numbers will give you two […]

What Is the Meaning of Gross Sales?

If your POS dashboard includes discounts and allowances, it might already calculate net sales for you, so you’ll need to figure that out on your own. With Shopify POS, it’s easy to create reports and review your finances including sales, returns, taxes, payments, and more. View your financial data for all sales channels from the […]

Product Costs Types of Costs, Examples, Materials, Labor, Overhead

To help accountants make ethically sound decisions, the Institute of Management Accountants (IMA) developed a Statement of Ethical Professional Practice. This statement provides standards and guidelines that assist accountants in choosing an ethically acceptable course of action. Next, you will need to allocate the cost of the activities to the individual products. Estimates and […]

Deferred Revenue Accounting, Definition, Example

As the services are provided, the deferred revenue liability is reduced on the debit side, and the earned revenue is recognized. When payment is received in advance for a service or product, the accountant records the amount as a debit entry to the cash and cash equivalent account and as a credit entry to the […]

What is an Outliers in Statistics: A Quick & Easy Method

Clustering-based outlier trajectory detection performed exceptionally well across all types and intensities of errors, indicating a potential strategic change in how outliers in growth data are viewed. Finally, the importance of detecting outliers was shown, given its impact on children growth studies, as demonstrated by comparing results of growth group detection. Multivariate outliers are extreme […]

What is the Difference Between Product Costs And Period Costs?

It is important to understand through the accrual method of accounting, that expenses and income should be recognized when incurred, not necessarily when they are paid or cash received. Direct materials, direct labor, and the cost of factory overhead are a few examples of product costs. Period cost examples include general and administrative expenses such […]