A majority shareholder is an individual or entity that owns more than 50% of the shares in a company. The majority shareholder has control over the company and can make decisions about its operations, management, and strategy. The term is used in both public and private companies. Does a 50% shareholder have control? Although a … Read more
Example and How It Works. A quartile is a statistical measure that divides a dataset into four equal parts. For example, if a dataset contains 100 observations, the first quartile would be the 25th observation, the second quartile would be the 50th observation, the third quartile would be the 75th observation, and the fourth quartile … Read more
The double-declining balance (DDB) depreciation method is a form of accelerated depreciation. Under this method, each year’s depreciation expense is equal to twice the depreciation expense of the previous year. The result is a front-loaded depreciation schedule, where a greater portion of the asset’s cost is depreciated in the early years of its life. The … Read more
Applied overhead is the portion of manufacturing overhead that has been assigned to specific units of production. The applied overhead calculation assigns a portion of the total manufacturing overhead to each unit produced, based on the number of direct labor hours required to produce that unit. The applied overhead is then used to calculate the … Read more
An auditor’s attest service is a type of assurance service that an auditor can provide to their client in order to help them make informed decisions. The service involves the auditor providing a report on their findings from their examination of the client’s financial statements and records. The report will include their opinion on whether … Read more
A ledger balance is the sum of all the amounts in an account, including both debits and credits. The ledger balance is different from the account’s balance, which is the difference between the account’s debits and credits. Can ledger balance be reversed? Yes, a ledger balance can be reversed. This is typically done when an … Read more
Analyzing unit cost is the process of understanding the various components that make up the cost of a single unit of product or service. This analysis can be used to identify cost savings opportunities and improve profitability. To calculate unit cost, all direct and indirect expenses associated with producing the product or service must be … Read more
A bad debt reserve is an allowance for doubtful accounts that a company sets aside to cover any future bad debts that may arise from customers who are unable to pay their debts. This reserve is created by making a provision in the accounting records for future bad debts, and it is used to absorb … Read more
Inflation accounting is a method of accounting that adjusts financial statements for the effects of inflation. The main purpose of inflation accounting is to provide a more accurate representation of a company’s financial position and performance. Inflation accounting is typically used in countries with high inflation rates. When inflation is taken into account, financial statements … Read more
A deferred credit is an accounting entry that delays the recognition of revenue until a later accounting period. The most common type of deferred credit is a deferred revenue credit, which is used to record revenue that has been received but not yet earned. In accrual basis accounting, revenue is recognized when it is earned, … Read more
