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Expense account definition

These expenses are essential for the growth and development of a company but are not directly tied to its day-to-day operations. Examples of capital expenses include investments in property, plant, and equipment, as well as research and development costs. These are just a few examples of the types of accounts used in finance. Other types […]

Credit Memorandum Definition, How to Settle

A refund isn’t the same concept as a credit memo, and the vendor refunds the money in full when a customer obtains a refund for a transaction. Our knowledgeable professionals can help company owners with basic accounting tasks such as credit notes, sales tracking and invoice issuing. In summary, credit memos are important documents for […]

Accrual Principle Definition, How it Work, Importance

The accrual method of accounting came into use as a response to the increased complexity of business transactions. Large companies that sell goods on credit may continue to receive revenue over a long period of time from goods that were sold earlier. Recording such transactions when the payments occur would reflect an inaccurate picture of […]

Utilities Expense Journal Entry Payment Example

The next transaction figure of $100 is added directly below the January 12 record on the credit side. Knowing that utilities expenses average around $1,600 during winter months ($1,200 for electricity, $100 for water, and $300 for heating), BookNook’s management might look for ways to reduce these costs. They could consider energy-efficient lighting to reduce […]

Family Office Accounting and Investment Management Software

The company is transforming how digital assets are stored and traded by providing reliable, secure and scalable solutions for qualified institutional clients. QPLIX offers an all in one solution, readily available, consolidating all asset classes, complex owner structures, to enhance high quality investment decisions. Venn helps RIAs, advisors, asset owners and asset managers embrace a […]

What Business Advertising Expenses Are Deductible?

Small companies often grow on word of mouth, but to get the word of mouth going, you need to spend money to advertise your company. The advertising expense account is standard in the chart of accounts of any business because almost all businesses need to advertise. If you use financial software, it is likely already […]

What Is Financial Leverage? Types of Leverage and Examples

Business equity owners can increase the return on their investment by arranging for a part of the business’s required finance to be borrowed. There are several methods for investors to use leverage indirectly if they don’t feel comfortable employing it directly. They can invest in businesses that regularly utilize leverage to finance or grow their […]

Inventory turnover formula

Analysts use COGS instead of sales in the formula for inventory turnover because inventory is typically valued at cost, whereas the sales figure includes the company’s markup. Some companies may use sales instead of COGS in the calculation, which would tend to inflate the resulting ratio. Keeping track of your inventory turnover is also important […]

Early Payment Discounts: Realizing Value in Accounts Payable

Next, they need to subtract the discount amount from the total amount due. For example, say you regularly sell to a shop called Donna’s Donuts. Although she’s a good customer, Donna always waits until the very last minute to pay her bill. Harold Averkamp (CPA, MBA) has worked as a university accounting instructor, accountant, and […]