The aggregated allocated costs can then be combined with direct labor and materials costs to ascertain the comprehensive production cost. You would have to do further analysis of this number to determine whether the company is making a profit or needs to reduce costs. Everything flows to the bottom line,...

Two companies with similar gross profit margins could have drastically different adjusted gross margins depending on the expenses that they incur to transport, insure, and store inventory. Profit margin is one of the simplest and most widely used financial ratios in corporate finance. A company’s profit is calculated at three...

It is called a “T” account because you draw a T first. When there is only one account debited and one credited, it is called a simple journal entry. There are however instances when more than one account is debited or credited. We've gone through 15 journal entry examples and...

The good news for most small businesses is that they don’t need full-time bookkeeping services. If you only have a few employees and don’t do a lot of transactions or have hundreds of invoices to go through, you should be able to get by with part-time help. On average, hiring...

Managerial accounting delivers data-driven feedback for these decisions that can assist in improving decision-making over the long term. Business managers can leverage this powerful tool in order to make their businesses more successful, because management accounting adds value to common business decision-making. All of this readily available information can lead...

Total deposit is the amount you are depositing into your account minus the cash you are taking back. Signing the slip is required if you are getting cash from your deposit. This is the total amount of cash and checks that you have to deposit. Write down how much cash back you'd...

A business has positive working capital when it currently has more current assets than current liabilities. This is a sign of financial health, since it means the company will be able to fully cover its short-term obligations as they come due over the next year. Working capital is a company’s...

This means revenue is not recognized upfront at the time of the sale for the entire subscription fee but rather over the course of the subscription period. Meanwhile, construction companies usually recognize revenue over time as a project progresses, based on the percentage of completion method, rather than recognizing it...