The terms work in progress and work in process are used interchangeably to refer to products midway through the manufacturing or assembly process. WIP accounting does not include costs for items that have not entered the production assembly line. For example, raw materials that are still placed in factory stores are not included https://www.wave-accounting.net/ in […]

QuickBooks Desktop is a good choice if you need specialized features such as inventory tracking or forecasting, and you don’t mind paying more for them. When working with the Desktop version, it’s downloaded right to your computer. This means the data operates as fast as your computer, all without needing to worry about https://intuit-payroll.org/ a […]

All you need to do is fill in the empty fields with the numbers you’ve calculated. Although the income statement is typically generated by a member of the accounting department at large organizations, knowing how to compile one is beneficial to a range of professionals. After calculating income for the reporting period, determine interest and […]

While useful in theory, there are some drawbacks of dividend discount models like the Gordon Growth Model. First, the model assumes a constant rate of growth in dividends per share paid by a company. In reality, many companies vary their dividend rates based on the business cycle, the state of the economy, and in response […]

Many of these would be considered direct costs, but the classification of direct vs indirect costs is less obvious for companies outside of manufacturing. Costs like rent and administrative salaries are fixed costs, which remain the same no matter how much a business is producing. Imagine a factory that produces pencils — the cost of […]

Any time you sell a product or service, your accounting books must be updated to reflect each transaction. When this is done, the proper transaction gets recorded into the accounts. what are the three types of accounts And when your business purchases products or services from other companies or business entities, you also need to […]

In this article, we’ll examine the balance sheet and income statement and their differences. An income statement, also known as a profit and loss statement (P&L statement), summarizes a business’s revenues and expenses over a period of time. It’s one of the most important financial statements for small business owners, so it’s key to understand what […]

This strategy can effectively clear out excess inventory or promote specific products. However, relying too heavily on discount pricing may lead to customers expecting lower prices or perceiving your products as low quality. For example, H&M may offer a seasonal sale where select clothing items are sold at a discount from their original price to […]

DCF approaches to valuation are used in pricing stocks, such as with dividend discount models like the Gordon growth model. In investments, a comparables approach is often synonymous with relative valuation. A valuation can be useful when trying to determine the fair value of a security, which is determined by what a buyer is willing to pay […]

This means when a company makes a sale on credit, it records a debit entry in the Accounts Receivable account, increasing its balance. Conversely, when the company receives a payment from a customer for a previously made credit sale, it records a credit entry in the Accounts Receivable account, decreasing its balance. Revenue is the […]