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June 03, 2021

Charles Lutwidge
Units of Production Method of Depreciation: Explanation and Calculation

Units of Production Method of Depreciation: Explanation and Calculation

Definition One of the main tasks of the business owners, especially in the current conditions, is to preserve the financial capabilities of the enterprise – to pay wages, vacation and other payments to employees, taxes to the budget, and solve other..

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May 29, 2021

Charles Lutwidge
An Easy to Understand Explanation of a Debit Memo with an Example

An Easy to Understand Explanation of a Debit Memo with an Example

Overview When dealing with merchandise inventory, some of the new terminology you might come across is debit and credit memo. What exactly does a debit memo mean? When a buyer purchases something from a business on a credit, both make records..

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May 28, 2021

Charles Lutwidge
What Are Investing Activities in Accounting?

What Are Investing Activities in Accounting?

Definition Investing activities are a type of cash flow activities. Accordingly, you will see an investing activities section in the cash flow financial statement. They reflect changes to fixed assets, meaning transactions that increase and decrease the company’s long-term assets. The..

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May 27, 2021

Charles Lutwidge
Stockholders’ Equity

Stockholders’ Equity

Definition Any enterprise, be it an international corporation or a small local store, has some resources necessary for its operation. But what is stockholders’ equity? You can come across this concept both on the pages of textbooks on economics and in..

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May 26, 2021

Charles Lutwidge
Absorption Costing in Accounting

Absorption Costing in Accounting

Definition Absorption costing is a costing method that does not just account for the direct costs in the calculation of the cost of goods. In other words, the cost of each unit of a product with this method includes the following..

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May 25, 2021

Charles Lutwidge
Trade Discount Explanation with Example

Trade Discount Explanation with Example

Definition The idea of giving a trade discount is frequently used in the supply chain. A trade discount is usually a percentage reduction in the price of merchandise granted by the manufacturer to the wholesaler or the wholesaler to the retailer...

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May 24, 2021

Charles Lutwidge
Easy to Understand Explanation of Accrued Interest

Easy to Understand Explanation of Accrued Interest

Definition and Meaning Whether you are a business owner or simply an individual who wants to borrow money to finance a purchase or any other need, interest is something you will come across and should be familiar with. It is also..

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May 23, 2021

Charles Lutwidge
Incremental Cost Explanation and Calculation

Incremental Cost Explanation and Calculation

Definition Every business has costs. Costs are usually defined as the monetary value of goods and services that producers and consumers purchase. There are numerous types of costs that an accounting department calculates and records daily basis or less frequently if..

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May 22, 2021

Charles Lutwidge
Operating Cycle Explanation and Formula

Operating Cycle Explanation and Formula

What is an operating cycle? The operating cycle in accounting is the period (number of days) from the moment the raw materials arrive at the warehouse until the receipt of payment for the products sold. This is an important part of..

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