Accounting

The following exercise is designed to enable students to apply their knowledge on the principle of lower of cost or market of inventory rule. NRV equals expected selling price less the sum of expected cost of completion and expected cost needed to make the sale. Market value means the replacement cost of the inventory. Replacement cost may be in the form of purchase cost or manufacturing cost. In other words, market value is amount that we would have to pay to acquire inventory of the same quan […]

A fixed asset such as software or a database might only usable to your business for a certain period of time. This condition is most applicable to inventory, rather than fixed assets. The IRS has information about the depreciation and lifespan of assets. For example, if a company buys a delivery van costing $100,000 and it is expected to be used for 5 years, the company might have a depreciation expense of $20,000 in each of the five years.

What is tangible asset?

Tangible assets are physi […]

Learn accounting fundamentals and how to read financial statements with CFI’s free online accounting classes. Certification, designed to transform anyone into a world-class financial analyst. With the passage of time, the company’s operations improve drastically, creating economies of scale.

More cooperative supplier relations have been shown to increase mutual benefits in terms of target costs particularly at a component level.
Total Quality Control is a Japanese process that init […]

Fair value, on the other hand, takes into account how much an asset is worth right now, taking into account factors such as age and wear and tear. Inflation-adjusted value is the original purchase price, adjusted for inflation since the purchase date—in other words, the change in the value over time.
In other words, businesses have to record an asset on theirbalance sheetfor the amount paid for the asset. The asset cost or price is then never adjusted for changes in the market or economy and ch […]

Income from investments or one-time sums such as the proceeds from a lawsuit are excluded. Financing costs are also excluded, as are income taxes paid by the business. In other words, operating income is the money a firm generates from its business operations that can then be used to pay creditors and produce a profit for investors. EBIT stands for Earnings Before Interest and Taxes and is one of the last subtotals in the income statement before net income. EBIT is also sometimes referred to as […]

The gross requirements are an aggregate forecast of demand from the cell. Of course, as the gross requirements increase, additional cards are introduced into the cell in advance of the demand increase. MRP thus plays the role of planning adviser to the cell, setting the budget level in terms of the number of cards but not specifying the “expenditure” or release of the cards. Theoretically, there is no limit on the variety of control methods that can be developed.

They don’t e […]