This Accounting category will cover various topics on accounting ranging from financial, management, and advance accounting.
Sales revenue of a business comes from either cash sales or credit sales. Cash sales are sales made for cash. That’s mean the seller receives cash payment immediately upon providing goods or services to its customers. In this article, we cover the accounting for cash sales. This includes both sales with sales tax and sales […]
Accounting for Cash Sales Read More »
Sales on credit are very common in today’s business environment. This is because each business needs to manage its working capital properly. When a business makes sales on credit, such sales correspondent entry will be on the accounts receivable. In contrast, when the company makes a purchase on credit, the correspondent entry of such purchase
Accounting for Credit Sales Read More »
What is Consignment Inventory? Consignment inventory refers to any stock that a company has the legal rights to but does not hold. Usually, another company, known as the consignee, keeps the stock. Although another company holds the goods, the risks and rewards associated with the inventory remain with the owner. The concept of consignment inventory
Accounting for Consignment Inventory Read More »
For most companies, non-current assets play a significant role in long-term survival and revenue generation. Companies utilize these assets to help in manufacturing products, attracting customers, creating value, etc. These are all necessary to increase profitability over several periods. Non-current assets come as a result of capital expenditure. Companies incur these expenses to obtain benefits
How to Account for Land Improvements? Read More »
A cost is an expenditure that companies must incur to produce or sell their products. It may also include investment in assets and bringing them to a usable condition. For companies, costs may come from various sources and in different forms. In management and cost accounting, analyzing costs is crucial for obtaining further information about
What is Semi Variable Cost? Read More »
Cash is one of the most critical assets for companies and businesses. A proper cash management system can help companies survive in the long run. These may include various procedures that can be a part of a company’s cash management system. Usually, companies divide cash into two categories. These include cash in the bank and
What is Imprest System? Read More »
Companies that deal in physical stock must always keep their stock replenished to generate revenues. It is crucial to do so as customers will require suppliers to provide their supplies whenever needed. However, the same may not apply to all companies as some may deal on a job-basis. Nonetheless, for most other companies, maintaining a
Reorder Point of Inventory Read More »
What is Variance Analysis? Variance analysis is a process used by companies to identify any inefficiencies or deviations from a plan or budget. They do so by first establishing a budget and then comparing actual performances with it. By doing so, companies can identify any deficiencies in their operations and, sometimes, the budgets. This process
Limitations of Variance Analysis Read More »
What is Variance Analysis? Variance analysis is the process of calculating and analyzing any differences in budgeted and actual performances. It is a tool that companies use to monitor and control their costs. However, it only takes a reactive approach to controlling, which means that it cannot prevent problems. Despite that, variance analysis plays a
Importance of Variance Analysis Read More »
Management accounting is a part of accounting that concerns a company’s internal matters. Usually, it consists of establishing costs for various products or services and preparing forecasts or budgets. The purpose of management accounting is to help companies with planning, controlling, and decision-making. There are no specific requirements for management accounting, unlike financial accounting, which
Variance Analysis in Management Accounting Read More »
