Author: John

Revised Depreciation: Formula, Definition, Method, Equation

Depreciation refers to the systematic allocation of the cost of a tangible asset over its estimated useful life. It is an accounting method used to recognize and distribute the expense of a resource over time. Depreciation helps match the asset’s cost with the revenue it generates and considers factors such …

How to Balance a Balance Sheet

A balance sheet is a financial statement that presents a snapshot of a company’s financial position at a specific moment. It has three main components: assets, liabilities, and shareholders’ equity. Assets represent what the company owns, liabilities represent its obligations, and shareholders’ equity represents the residual interest of shareholders in …

Cash Drawer: Definition, What It Is, Balance Sheet, Accounting, Reconciliation

In the modern world, cash transactions continue to play a significant role despite the increasing popularity of digital payment methods. While technology advancements have introduced alternative forms of payment, cash remains a widely accepted medium of exchange. Therefore, companies hold cash drawers in their retail locations to facilitate these transactions. …

Classification of Cost: What It Is, Definition, Examples, Importance, Accounting

 Cost classification is an important concept in accounting that enables businesses to better understand the different types of expenses they incur. By categorizing costs, companies can analyze and monitor their expenditures, make informed decisions about resource allocation, and ultimately improve their financial performance. By understanding how costs are classified, businesses …

Restructuring Costs: Definition, Are They an Operating Expense, Accounting and Tax Treatments, Meaning

Companies undertake restructuring for various reasons, including financial distress, mergers, and acquisitions, strategic repositioning, etc. Restructuring allows companies to adapt to changing market conditions, improve financial performance, enhance operational efficiency, meet regulatory requirements, capture new opportunities, and navigate challenges. However, this process may come with restructuring costs. Their classification may …