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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..

Articles

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..

Articles

May 21, 2021

Charles Lutwidge
Operating Expenses Explanation with Examples

Operating Expenses Explanation with Examples

One of the important parts of accounting is the company’s income and expenses. It is the nature, conditions of performance, and the direction of work of a particular organization that affect the division of funds into -income and expenses. Definition Operating..

Articles

May 20, 2021

Charles Lutwidge
Meaning of Mixed Cost in Accounting

Meaning of Mixed Cost in Accounting

Definition There are two ways cost can behave. They can either be variable or they can be fixed. However, some activities combine both variable and fixed costs. When this happens, we call it mixed costs. For example, a salesperson’s salary can..

Articles

May 17, 2021

Charles Lutwidge
Simple Explanation of Purchase Discounts

Simple Explanation of Purchase Discounts

Almost every individual and business owner has come across purchase discounts sometime in their life. The financial benefit for the company providing the discount is extremely simple – it gets cash flow that it can use in its business activities. Yes,..

Articles

May 16, 2021

Charles Lutwidge
Cash and Cash Equivalents

Cash and Cash Equivalents

Information on the availability and flow of funds is necessary to determine the minimum need for funds, as well as to analyze the company’s liquidity. Cash and cash equivalents are the first items we see on the company’s Balance sheet and..

Articles

May 15, 2021

Charles Lutwidge
Simple Explanation of FOB Shipping Point

Simple Explanation of FOB Shipping Point

Meaning The FOB portion of this term is usually considered to be an abbreviation for “Free On Board”, although you might also see F stand for freight. In any case, the meaning for the user is the same. It indicates how..

Articles

May 14, 2021

Charles Lutwidge
Days Sales in Inventory

Days Sales in Inventory

The concept of product turnover determines how quickly the funds invested in goods will return to you, and bring a profit. This is one of the main concepts for the company’s success. In this article, we will explain what it means..

Articles

May 13, 2021

Charles Lutwidge
Contingent Liability Explanation and Examples

Contingent Liability Explanation and Examples

Meaning If a business is facing a potential obligation that must be fulfilled at a future date, it might have to record a liability in the present period. Contingent liability depends on the likelihood of an event occurring. In other words,..

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