Category: ACCOUNTING

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 …

Direct Materials Cost: Definition, Formula, Calculation, Example, Method

Direct expenses are costs specifically and directly attributable to a particular product, project, or department. Companies incur these expenses when producing or delivering goods or services. Therefore, they relate directly to the revenue generated by those goods or services. Companies can understand their cost structure and profitability by tracking and …

Contract Account: Definition, What It Is, Types, Format, Treatment

Companies operating in the manufacturing, construction, and consulting industries may use a contract structure for their clients. It allows them to treat each job separately and work on it according to the client’s needs. In accounting, these companies may use a contract account to track these jobs. Therefore, it is …

Semi-Variable Costs: Definition, Examples, Formula, Types, Calculation, Meaning

Cost behaviour refers to how costs change in response to changes in activity levels or production volumes. It describes the relationship between costs and the company’s activity levels or production output. Understanding cost behaviour is crucial for companies to forecast, budget, manage costs and make informed decisions about pricing, production …