This Accounting category will cover various topics on accounting ranging from financial, management, and advance accounting.
Introduction The closing inventory and cost of goods sold of a business are two important values that help a business determine their profits or losses for a period. To calculate the cost of goods sold, a business needs to know the value of its closing inventory. This can be calculated by tracking the inventories of …
Businesses need to calculate the value of their inventory and cost of goods sold at the end of each period to determine their profit or loss. To calculate these, businesses need to keep track of any changes in their inventories during the year. There are two main types of inventory systems that are widely used, …
When a business purchases a new fixed asset, the business cannot expense out all of the cost of the asset in the year of purchase. This is due to the matching concept which states that expenses should be matched to the year in which revenues are earned from them. Fixed assets help a business generate …
In the previous articles, we have talked about inventory as well as methods in valuing inventory. In this article, we will talk about the inventory costing. So what are the costing methods of inventory? Inventory costing is very crucial; especially for merchandising company as we need to present in the financial statements both in statement …
Inventory is one of the assets in the statement of financial position. In order to present it in the face of the financial statements, we need to determine its value in accordance with relevant standard. IAS 2 states that the inventory should be valued or calculated at the lower of cost and net realizable value. …
Valuing Inventory: Lower of Cost or Net Realizable Value Read More »
Inventory is an item presented in the financial statements as current assets. It is normally applicable for trading or merchandising as well as production company as they need to buy produce product or goods for resale. So what is inventory? Definition of Inventory There are a number of definitions; however, as per IAS 2, Inventory …
Introduction Basically, the purpose of setting up a business is to earn profit and all stakeholders want to see the business is growing for foreseeable future. They don’t want to see that company encounter any problems or failure that result in liquidation or bankruptcy. Thus, going concern principle is always a key those stakeholders want …
In the statement of financial position, there are three main elements such as assets, liabilities and equity. Assets contain two main elements; current assets and non-current assets. Account Receivable is one of the items under current assets. So what is Account Receivable? Definition of Account Receivable Account Receivable is also commonly known as trade receivable …
Introduction Conservatism concept is one of the accounting concept dealing with the recognition of increase or decrease in equity. Normally, the increase of equity derives from the sale of goods or the provision of services to customers while the decrease of equity derives from the expenses incur at each reporting period. So what is conservatism …
[et_pb_section fb_built=”1″ _builder_version=”3.22″ custom_padding=”10px||13px|||”][et_pb_row _builder_version=”3.25″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” custom_padding=”9px||14px|||”][et_pb_column type=”4_4″ _builder_version=”3.25″ custom_padding=”|||” custom_padding__hover=”|||”][et_pb_text _builder_version=”3.27.4″ background_size=”initial” background_position=”top_left” background_repeat=”repeat”] Liability is one main element in the financial statements presented in the statement of financial position or balance sheet. Liabilities consist of current and non-current liabilities. Based on the conceptual framework, an essential characteristic of a liability is …
What are liabilities in the statement of financial position? Read More »
