Expenses are a necessary evil, we all have them. You may not think about them every day but they’re always there lurking in the background of your life. They can be overwhelming and stressful if you don’t keep up with them or know what to do when unexpected expenses come …

What is Depreciation? In accounting, depreciation refers to the process of deducting an asset’s cost over its useful life. This method allows companies to spread that cost over several periods. Furthermore, it is also in line with the matching concept in accounting. This concept requires companies to match expenses to …

Keeping the finances in order is a crucial aspect of any business. To do so, it is necessary to have a record of the financial transactions that took place within the business. The trial balance is an important part of this process and focuses on keeping all of the books …

To understand a company’s valuation, there are different ways to analyze it. One of the most popular methods is the Enterprise Value (EV). Enterprise Value is very useful for investors to compare the size of different companies. It also makes it easier for enterprises to identify the value of acquisitions. …

The accounting for nonprofit organizations (NPOs) differs from other entities. Accounting standards require these entities to use a different format when reporting their expenses. On top of that, these standards require them to present those expenses in a specific financial statement. NPOs prepare the statement of activity, where they must …

Variance analysis is a technique used in managerial accounting. It allows companies to calculate the difference between expected and actual figures. Consequently, they can investigate how those variances occurred. Variance analysis can apply to various areas if a company has a budget. One of these includes sales and revenues. Among …

Accounts Expenses are an important part of accounting and can be defined as the costs that are not related to production. These expenses include items such as rent, utilities, insurance premiums, payroll taxes, or contributions to pension plans. Accounts expenses are also one of three classifications of assets on a …

The accounting for debt instruments involves various stages. Initially, it begins when a company obtains debt from multiple sources. When holding that debt, the company will perform several accounting treatments. The final stage during this process is the extinguishment of debt. This process may give rise to gains or losses. …

The accounting process for companies and other entities may differ. One of these entities includes government organizations. Usually, companies in the US follow accounting standards issued by the Financial Accounting Standards Board (FASB). For government bodies, they come from the Governmental Accounting Standards Board (GASB). GASB standards guide entities on …

To understand how important a company’s inventory is, many investors will look at the company’s inventory turnover ratio. It is an important factor for every business that deals with inventory. It gives an idea of how well the business can sell its inventory in a given time frame. A high …