Accounting

Circumstances arise when necessary to show a special item’s financial statement separately to offer a fair presentation. Special items tax impact are also separately disclosed to allow for better comparison. A business transaction or event is considered infrequent if it is not expected to recur in the foreseeable future. The evidence of a past occurrence is used to assess the likelihood of a recurrence and takes into account the environment in which a company operates. The reason behind s […]

Remember, she used up the two 10 cost items already under FIFO. If she uses average cost, it is 11 plus 20, for a profit of 14.

What are the 3 types of budgets?

Depending on these estimates, budgets are classified into three categories-balanced budget, surplus budget and deficit budget.

Ending inventory is a common financial metric measuring the final value of goods still available for sale at the end of an accounting period. During periods of rising prices, goods with higher costs are s […]

Intellectual capital creation depends largely on the investment and management of a firm’s talent base. As discussed, all else being equal, empirical research suggests it is the management of the intangible, namely people, that explain firm differentiation in the market. Merely discussed the importance of intangibles, without any attempt being made to quantify them. So while intangibles are clearly an essential element of contemporary banks’ business model reporting practice is yet […]

Once each part of the COGM is calculated, the final amount is placed into the finished goods inventory. This inventory contains any products of goods or services that are in their final form. With all the pieces into place, we can compute the cost of goods sold. Prime CostPrime cost is the direct cost incurred in manufacturing a product and typically includes the direct production cost of goods, raw material and direct labour costs.
Be careful not to confuse the terms total manufacturing cost a […]

The goal of whichever cost allocation method you use is to either spread the cost in the fairest way possible, or to do so in a way that impacts the behavior patterns of the cost objects. Thus, an allocation method based on headcount might drive department managers to reduce their headcount or to outsource functions to third parties. Overhead costs are indirect costs that are not part of manufacturing costs. They are not related to the labor or material costs that are incurred in the production […]

Initial elections are made by filing Form 970, Application to Use LIFO Inventory Method. Changes within LIFO are made by filing Form 3115, Application for Change in Accounting Method.
Milagro has a beginning inventory balance of 150 units, and sells 95 of these units between March 1 and March 7. Suppose there’s a company called One Cup, Inc. that buys coffee mugs from wholesalers and sells them on the internet. One Cup’scost of goods sold differs when it uses LIFO versus when it use […]