Companies pay their employees after predefined intervals. However, accounting requires them to recognize any liability incurred for those expenses regardless of the payment. Therefore, companies use accrued payroll to track it. What is Accrued Payroll? Accrued payroll is a fundamental concept in accounting that represents the accumulated amount of employee …

In decision-making, especially about economics or community projects, it’s important to think about how choices impact everyone, not just a few. There’s a specific factor that helps measure this impact, showing how decisions can affect the whole society – which is known as Marginal Social Benefit (MSB). It’s crucial for …

In today’s economy, the role of expansionary monetary policy is like a helping hand during tough times. Imagine a situation where jobs are hard to find, businesses struggle to grow, and people are spending less. In such scenarios, having the right tools to start growth and encourage spending is crucial. …

Vertical and horizontal analysis provide valuable insights into multiple aspects of a company’s financial performance. However, they differ in the way they help analyze financial statements. What is Vertical Analysis? Vertical analysis (or common-size analysis) is a financial evaluation method focused on dissecting and comparing individual components within financial statements …

When it comes to a company going public, there are two main ways to do it: through an initial public offering (IPO) or through direct listing. While IPOs have long been the traditional route for companies looking to become publicly traded, direct listings have gained popularity in recent years. It’s …

Job costing is crucial for companies as it helps determine the cost of individual jobs or projects, enabling accurate pricing, budgeting, and profitability analysis. An essential document that helps companies is a job cost sheet. What is a Job Cost Sheet? A job cost sheet is a comprehensive document used …

When it comes to issuing new securities, flotation costs play a major role. It’s important to understand how much capital they will be able to raise from those new securities and how much it will cost them to do so. It’s an important factor that helps businesses determine if issuing …

When it comes to understanding how well a company is doing, there’s more than just looking at the numbers. It’s crucial to dig deeper and see the real picture behind those figures. This is where the significance of a certain type of analysis becomes important. It provides a clearer, more …

When allocating costs, companies must determine the number of units produced during a period. However, it becomes more complicated when some units haven’t finished manufacturing. Therefore, companies use equivalent units of production to solve the issue. What are Equivalent Units of Production? Equivalent units of production (EUP) is a concept …

Understanding normal profit is crucial when it comes to running a successful business. Normal profit is basically a condition where a business earns enough revenue to cover all its expenses and achieve zero economic profit. By understanding how normal profit works, businesses can make better financial decisions and plan for …