This Accounting category will cover various topics on accounting ranging from financial, management, and advance accounting.
Leveraged buyouts refer to the takeovers using debt financing. LBOs often happen outside the control of the acquiree firm. The acquirer may take over the target company for several reasons. The accounting basis for leveraged buyouts is set to analyze the new entity’s control and the transaction’s monetary value. If the takeover meets certain conditions, […]
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Decoupling inventory is a type of safety stock in a manufacturing process. It is used to separate the inventory stocks for each step in the manufacturing process. It aims to remove any bottlenecks due to shortage or any other reason. Decoupling inventory refers to safety stocks of inventory that cover any turbulence due to internal
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Dividends refer to payments that are made by a company to its shareholders from its accumulated distributable earnings. The dividends will either be in cash or in some kind of consideration (i-e; stocks, shares of a listed company, etc). When a corporation issues a dividend of its common stock to its common shareholders without any
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A business may incur several types of expenses. There are various ways of categorizing these costs. By nature, a business can classify costs into two categories; direct costs and indirect costs. Direct cost can be directly linked to the production of a product or rendering a service. Indirect costs can be associated with the production
Direct Costs Vs Indirect Costs – What are the Key Differences? Read More »
Contributed capital of a company is made up of two items; stocks and additional paid-in capital. The stocks section refers to the issued common stock usually. Thus, the term additional paid-in capital is one part of the total contributed capital. Contributed capital is not borrowed money from investors. Once invested, the company does not need
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Additional paid-in capital (APIC) or capital surplus is the money investors pay above the par value of shares. The premium paid above the face values of the newly issued shares is called the share premium or additional paid-in capital. It is received by a company when it issues common or preferred shares. It can only
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Contributed capital is the amount of money shareholders have invested in the company in exchange for ownership rights. It is also called paid-in capital or shares capital. It is recorded on the balance sheet as the first line item under the owner’s equity section. Common stocks issued and premiums paid for these stocks combined to
What is Contributed Capital? How to Calculate the Contributed Capital? Read More »
Whenever a person buys a product, there are a lot of thoughts going on in his mind; for instance product design, durability, specifications, etc. However, the biggest concerns of a consumer while buying a product are its durability, security, and longevity. The warranty gives the consumer an aspect of security. A vendor or a manufacturing
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A lease is an agreement between two parties for using an asset. The party that owns the asset is the lessor, while the other party is the lessee. The lessee uses the leased asset and pays a regular fee to the lessor. Before the transaction, both parties enter into an agreement that defines each party’s
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Overview Cost is a term used in business and finance to represent the monetary value of a company’s spending. Usually, companies incur expenses in various fields, such as repair and maintenance, salaries, etc. However, these do not represent cost. Instead, the term cost refers to any expenses that companies incur on producing assets. Therefore, an
What is Controllable Cost? Read More »
