The expense incurred by producers when creating more than one product or process is referred to as the joint cost. These costs include labor, materials, and overhead for the joint product’s manufacture. Almost every manufacturer uses joint cost allocation to keep input costs under control. The costs allocated to joint products and by-products should have …
If the accounting rate of return is greater than the target, then accept the project, if it is less then reject the project. Accounting Rate Of Return is also known as the simple rate of return because it doesn’t take into account the concept of the time value of money, which states that the present value …
What is Accounting Rate of Return ARR: Formula and Examples Read More »
The net profit margin is simply net income divided by sales revenue, which happens to be a common-size analysis. A common size financial statement is used to analyze any changes in individual items when it comes to profit and loss. They’re also used to analyze trends in items of expenses and revenues and determine a …
Common Size Income Statement Definition and Example Read More »
If the corporation used the income forecast method to depreciate property, it must figure any interest due or to be refunded using the look-back method, described in section 167(g)(2). Use Form 8866 to figure any interest due or to be refunded. For more information on reporting the deferred tax and interest, see the Instructions for …
What Is a 1120 Tax Form? Facts and Filing Tips for Small Businesses Read More »
We go into much more detail in The Adjustment Process and Completing the Accounting Cycle. Many small businesses start out with cash basis accounting, but accrual basis financial statements give you a much better understanding of your business’s financial position. Plus, generally accepted accounting principles, also known as GAAP, require public companies to use accrual …
What are the accounting principles, assumptions, and concepts? Read More »
Otherwise, larger unreported transactions may not be recorded by the end of a reporting period, resulting in inaccurate financial results. Therefore, it is vital to have a process in place to clear out the suspense account on regular basis so that all of the suspense account entries are moved into their designated accounts to zero …
What Is a Suspense Account? How It Works, Types, and Example Read More »
It’s common for bank account numbers to have anywhere from eight to 12 digits. If you have any type of bank account, it’s worth knowing about these numbers—and where to find them. A signature line is provided at the bottom of the slip, and a teller may ask for proof of identity if you are …