Other costs may be involved in direct expenditure like carriage inward and freight. All other expenditures are part of the indirect expenditure and were neglected at the time of calculating Prime Cost. The significance of prime cost varies across industries, each with unique challenges. In manufacturing, prime cost is monitored to ensure efficient resource use […]

Since they accumulate invisibly until paid, they can catch businesses off guard if not tracked properly. For all three ratios, a higher ratio denotes a larger amount of liquidity and therefore an enhanced ability for a business to meet its short-term obligations. The difference between high and low gearing comes down to the balance between […]

Let’s take a look at the bookkeeping cases for Excel vs. QuickBooks. The desktop version proves more reliable with its offline access, expandable storage, and collaborative features through OneDrive. Set the desired options for symbols, decimal places, and negative numbers. Click “OK” to apply the accounting number format to the selected cells. When considering QuickBooks […]

Accountants are stepping up to the challenge and leveling up their work. Just as accountants are embracing technology and enjoying business success, their clients are following suit. On average, 6 in 10 (60%) respondent clients have grown profits over the last 12 months. Implementing or optimising accounting technology solutions (63%) is the service respondents say […]

FIFO offers a more straightforward approach, particularly useful for businesses where inventory items are consistently moving. It’s also the most accurate method of aligning the expected cost flow with the actual flow of goods. It reduces the impact of inflation, assuming that the cost of purchasing newer inventory will be higher than the purchasing cost […]

Corporations issue shares to obtain cash from investors, acquire another company, or acquire certain assets or services. The par value of a share of stock is sometimes defined as the legal capital of a corporation, but some states allow corporations to issue shares with no par value. If a state requires a par value, the […]

Deloitte decided to still keep their consulting practice in-house, putting them ahead of the pack once the other Big 4 firms started to re-boot their consulting arms. While the Big Four continue to dominate the professional services landscape, their prominence has made them subject to greater public and regulatory scrutiny. Addressing these challenges — from […]

It is shown under the head ‘Current Liabilities’ in the Balance sheet of a company. The announced dividend, despite the cash still being in the possession of the company at the time of the announcement, creates a current liability line item on the balance sheet called “Dividends Payable”. The declaration date is the date on […]

In this case, the company ABC can record the $100,000 dividend declared on June 15 by debiting the $100,000 to the dividend declared account and crediting the same amount to the dividend payable account. In the cash flow statement, dividends paid appear as a cash outflow in the financing activities section, reflecting the distribution of […]

For instance, when available-for-sale securities are sold, unrealized gains or losses previously recorded in AOCI are reclassified to the income statement as realized gains or losses. Hedging reserves in AOCI arise from using derivatives to manage risks like interest rate, foreign currency, and commodity price fluctuations. Under hedge accounting rules, the effective portion of gains […]