May 26, 2021
Charles Lutwidge
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...
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May 25, 2021
Charles Lutwidge
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...
May 24, 2021
Charles Lutwidge
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...
May 23, 2021
Charles Lutwidge
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...
May 22, 2021
Charles Lutwidge
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...
May 21, 2021
Charles Lutwidge
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...
May 20, 2021
Charles Lutwidge
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...
May 17, 2021
Charles Lutwidge
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....
