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 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 …

Companies may use detailed records to ensure traceability and accuracy. Before transferring these records to the accounting system, they must consolidate them. Therefore, companies may use a control account. What is a Control Account? A control account serves to consolidate and simplify financial record-keeping. Instead of inundating the general ledger …

Companies maintain a general ledger recording of all accounts within the accounting system. These accounts are known as ledger accounts. What is a Ledger Account? A ledger account is a pivotal element in double-entry accounting, constituting a comprehensive record of financial transactions. Organized into categories such as assets, liabilities, equity, …

There are several types of funds in governmental accounting, each serving specific purposes and accounting for different activities. These funds fall into three broad categories, including governmental, fiduciary, and proprietary funds. Furthermore, each category can have its classifications. One of the classifications within proprietary funds is enterprise funds. What is …

Companies often encounter challenges related to the timely collection of receivables. Usually, uncertainties arise when customers, for various reasons, fail to fulfill their payment obligations. In addressing these uncertainties, companies must recognize a bad debt expense. What is Bad Debt Expense? Bad debt expense refers to the anticipated financial loss …

Companies use various financial tools to forecast information. This information helps anticipate future outcomes, enabling informed decision-making, strategic planning, and efficient resource allocation based on anticipated business conditions. One of these tools is the three-statement model. What is the 3 Statement Model? The three-statement model is a core financial modeling …

Depreciation refers to the reduction in an asset’s value over its life. In accounting, it is crucial to identify whether a company can depreciate a specific asset. Therefore, companies know what a depreciable asset is. What is a Depreciable Asset? A depreciable asset is a long-term tangible asset that experiences …

One of the most crucial measures of success for a company includes its ability to generate money. In accounting, the term used to describe it is sales turnover. What is Sales Turnover? Sales turnover (also known as turnover or sales revenue) is the total amount of money a company generates …

Before a company issues its financial statements, it goes through several stages. After preparing these statements, companies must evaluate all events occurring after it that may indicate changes to those figures. These are a part of subsequent events. What are Subsequent Events? Subsequent events in accounting pertain to occurrences or …