Nonmanufacturing overhead costs definition
Inventory is a very significant current asset for retailers, distributors, and manufacturers. Inventory serves as a buffer between 1) a company’s sales of goods, and 2) its purchases or production of goods. This account is a non-operating or “other” expense for the cost of borrowed money or other credit. Costs on Financial Statements Manufacturing and […]
1 2 Identify Users of Accounting Information and How They Apply Information Principles of Accounting, Volume 1: Financial Accounting
Following GAAP guidelines and being GAAP compliant is an essential responsibility of any publicly traded U.S. company. The consistency accounting principle says that once you choose an accounting method (accrual or cash), you should stick with it for all future financial records. This allows you to accurately compare performance in different accounting periods. This being […]
Retained Earnings Formula: Definition, Formula, and Example
The retained earnings equation is a fundamental accounting concept that helps companies calculate the amount of profit that is kept in the business after dividends are distributed to shareholders. The retained earnings calculation is essential for understanding a company’s ability to reinvest in itself, pay off debt, or fund its own growth without needing additional […]
LIFO Reserve Formula Example
Both the LIFO and FIFO methods fall in line with the Generally Accepted Accounting Principles (GAAP) established by the Financial Accounting Standards Board (FASB) in the US. Most companies utilize both methods when preparing financial information. The goal is to make the presentation of inventory value as attractive as possible. For internal reports, which are […]