Inventory management refers to the process of overseeing and controlling the stock of goods held by a company. It is a crucial part of any business that deals in physical products, as it ensures that the correct level of stock is maintained, while also minimising the cost of holding excess inventory. There are a number … Read more
Detective control is an accounting term that refers to a type of control that is designed to detect errors or irregularities. Detective controls are typically implemented after the fact, in order to identify problems that have already occurred. For example, a company might conduct a monthly review of all transactions in order to identify any … Read more
Pro forma earnings is a non-GAAP financial measure that companies use to report earnings. It is an adjusted net income figure that excludes one-time items, such as restructuring charges or the impact of an acquisition. The purpose of pro forma earnings is to give investors and analysts a better sense of a company’s underlying profitability. … Read more
Unearned revenue is income that has been received by a company but has not yet been earned. This type of revenue is recorded as a liability on the balance sheet until the goods or services are delivered, at which point it is recognized as revenue on the income statement. Unearned revenue is often received in … Read more
Variable overhead is the portion of total overhead that varies with production volume. Variable overhead includes costs such as direct labor, raw materials, and commissions. These costs increase as production volume increases. What are the different types of overheads as per functional classification? As per functional classification, there are four different types of overheads: 1. … Read more
A “due to account” is an accounting term used to describe a situation where one company owes money to another company. This can happen for a variety of reasons, such as when one company purchases goods or services from another company and has not yet paid for them. In this case, the company that owes … Read more
Loss carryback is an accounting technique used to mitigate the effects of a financial loss by carrying it back to offset income in a previous year. The loss is first applied to offset income in the year in which it was incurred, and any remaining amount is then carried back to the immediately preceding year. … Read more
Marketable securities are investments that can be converted into cash quickly and with little or no loss of value. They are typically short-term, high-quality debt securities or equity securities. The term “marketable securities” is used in accounting and finance to refer to investments that can be sold quickly and at a reasonable price. The term … Read more
How It Works, Types, and Example. What is a suspense account? A suspense account is a type of bank account used to temporarily hold funds that are not yet able to be transferred to their intended recipient. These funds may be held due to incomplete paperwork, incorrect account information, or other reasons. Suspense accounts are … Read more
How Cash Books Work, With Examples. What is a cash book? A cash book is a book that records all cash transactions made by a business. It includes all cash receipts and payments, and can be used to track the company’s cash flow. Why is cash book important? A cash book is a financial journal … Read more
