Matching Principle requires that expenses incurred by an organization must be charged to the income statement in the accounting period in which the revenue, to which those expenses relate, is earned. Let’s peek at some everyday business situations where the…
In large businesses, accrual accounting is essential for accurate financial reporting. Large businesses often have complex financial transactions and accrual accounting provides a more accurate reflection of their financial position. By using accrual accounting, large businesses can better manage their…
The ideal payroll and tax accounting solution for any small business. The payroll dates are calculated and the pay calendar is displayed. You can set up multiple pay frequencies for your company, and assign them to employees or contractors as…
Accrued revenues include income from generated invoices and assets that are yet to be received. In other words, revenue is recognised when it’s earned, and expenses are recognised when they are incurred, regardless of whether money has been transferred or…
This might not sound like much, but purchasing in bulk when the market is down means more savings in the long run. It can also help predict market trends, potentially saving businesses from buying when prices are abnormally high. Chartered…
The company might also decide to reduce production of product B if its cost is higher than the company’s target cost. To understand how throughput accounting works, you have to know what throughput is. Throughput is the amount of a…
Another difference is that costs can’t be transferred in job costing, but that can be across processes in process costing. Also, each job is different in job costing, but process costing is about projects produced in large volumes. Process costing…