It represents the money received by a company for goods or services that have not yet been delivered. When a company receives payment before rendering the service or delivering the product, it must recognize this receipt as a liability on its balance sheet. By understanding and properly accounting for unearned revenue, businesses can maintain accurate […]
Review the recommended shelf life of your products and monitor them closely to avoid exceeding this timeframe. But surprisingly, underestimating demand can also increase the risk of obsolescence. Missed sales opportunities often prompt production managers to overcompensate for future orders. Ideally, a business should maintain an obsolete inventory reserve that is paired with and offsets […]
This ensures that businesses can respond quickly to changes in inventory performance. Unaddressed, slow-moving inventory can become excess or obsolete, complicating recovery efforts and reducing profit margins due to increased costs. Frequent assessments of inventory levels and performance help businesses promptly adjust stock levels, preventing these negative outcomes. Reasons to avoid obsolete inventory Being proactive […]
Lean costing aligns with lean manufacturing principles, focusing on eliminating waste and maximizing value. Cost accounting meticulously records every income and expenditure, ensuring no detail is overlooked. This comprehensive record-keeping helps businesses monitor their financial health and make data-driven decisions. These definitions highlight cost accounting’s role in not just tracking costs but also analyzing them […]
Assets might lose value more rapidly at the start or end of their useful life. May overstate depreciation expenses in early years and understate in later years. The straight-line method ignores variations in an asset’s usage, which can affect its value. Unlike a truck or computer, there’s a direct correlation to the productivity of this […]
Extra time spent today is easily forgotten tomorrow. Having said that, we only have time on this earth to sell and we cannot inventory it. Number one rule in business; you cannot let your customers not let you make a living. I switched CPA because I needed a person on my business that would help […]
A service company provides intangible services to customers and does not have inventory. Some examples of service companies include lawyers, doctors, consultants, and accountants. Service companies often have simple financial transactions that involve taking customer deposits, billing clients after services have been provided, providing the service, and processing payments. Cash Management One of those key […]
Maybe more importantly, it shows investors and creditors what percentage of receivables the company is writing off. Treasury stock is a contra equity account that is used to offset the balance of the common stock account. The purpose of this account is to reduce the total equity on the balance sheet. Role in Financial Statements […]
The cost of goods sold applies only to businesses that sell products. If your business is service based (like a psychology clinic or legal team), your direct costs don’t come from sales of goods. Instead, your direct costs are any expenses related directly to your service. We don’t guarantee that our suggestions will work best […]
US President Donald Trump today announced a 25% reciprocal tariff on imports from South Korea, a longtime US security ally. The shock will be exacerbated by plunging consumer and business sentiment and by any retaliation visited upon America as foreign countries potentially impose new tariffs on the United States. President Donald Trump said the US […]
