Commission-based payment is a compensation model used by many businesses to incentivize their sales team. Under this payment system, employees earn a percentage of the sales they make instead of a fixed salary. This approach can motivate employees to work harder and achieve better results, but it also comes with …

Companies require funds to operate. These funds typically come from two sources, equity or debt. In the former case, it includes any funds provided by shareholders. These funds may also fall under the definition of contributed capital What is Contributed Capital? Contributed capital is the money or assets shareholders invest …

Cross-price elasticity is an essential concept in economics that measures the response of the quantity demanded of one good when the price of another good changes. Whether complimentary or substitute, the relationship between goods can significantly impact the demand for both. Understanding cross elasticity of demand is vital for companies …

An asset’s selling price represents the proceeds a company can expect from selling it. However, it may not always be what the company estimates. Therefore, companies may calculate the net realizable value, which is relevant in accounting. It mainly applies in two areas, inventory, and accounts receivable. What is the …

When a financial transaction occurs, it initially gets recorded in a journal known as the general journal. This journal entry captures crucial details of the transaction, including the date, accounts involved, amounts, and a brief description. Periodically, these journal entries are later posted or transferred to their respective accounts in …

These days there are lots of different types of things that people buy. But when it comes to Non-rivalrous goods most people don’t know about them. Non-rivalrous goods are a unique category of public goods that remain almost the same despite their consumption. These goods maintain a constant supply, regardless …

One of the critical pieces of supporting documents for every financial transaction posted to the accounting system is a voucher. It includes information crucial in helping companies follow a trail of events and evidence for those transactions. Therefore, it is critical to understand what it is. What is a Voucher …

Cost refers to the expenditure or sacrifice of resources, usually measured in monetary terms, incurred to acquire goods, services, or assets. It represents the amount of money or resources companies must allocate to obtain something of value. Costs can take various forms and classifications based on their characteristics. Regardless of …

The relationship between companies and shareholders is a vital aspect of corporate governance. Shareholders, as the company owners, hold ownership interests in the form of shares and have certain rights and responsibilities. Shareholders provide capital and risk-taking to the company, while companies aim to generate profits and create value for …

Total shareholder return (TSR) is an important concept that takes into account stakeholders. It’s a measure of the overall return on investment made by an investor in a particular company over a given period of time. Being an investor it’s always a good idea to look at the company’s TSR …