Accounting

Company A records its proportionate share of the subsidiary’s earnings as an increase to the Investment in Affiliate account on its balance sheet. The net effect is that the Investment in Affiliate account increases by Company A’s proportionate share of the undistributed earnings of Company B. We have discussed the 50% ownership threshold for consolidation accounting for an investment and the 20% ownership threshold for accounting as an equity method investment. General practice is […]

Founded on 6 March 1902 as Madrid Football Club, the club has traditionally worn a white home kit since inception. Excel Shortcuts PC Mac List of Excel Shortcuts Excel shortcuts – It may seem slower at first if you’re used to the mouse, but it’s worth the investment to take the time and… Learn accounting fundamentals and how to read financial statements with CFI’s free online accounting classes. The company and management will not be viewed as credible and will sca […]

The key difference between managerial accounting and financial accounting relates to the intended users of the information. Managerial accounting information is aimed at helping managers within the organization make well-informed business decisions, while financial accounting is aimed at providing financial information to parties outside the organization. Alicia Tuovila is a certified public accountant with 7+ years of experience in financial accounting, with expertise in budget preparation, mo […]

Recent theory argues that concern about job security creates an incentive for managers to smooth earnings in consideration of both current and future relative performance. Our evidence suggests that when current earnings are ‘poor’ and expected future earnings are ‘good’, managers ‘borrow’ earnings from the future for use in the current period. Conversely, when current earnings are ‘good’ and expected future earnings are ‘poor’ manager […]

Next, determine the corresponding cost of production at the level of highest and level activity units. The high-low method does not consider small details such as variation in costs. It assumes that fixed and unit variable costs are constant, which is not always the case in real life. It is possible that the high or low point do not represent the costs that a company would generally incur at those production levels. All you need for this method is two data values to come up with the cost behavi […]

An increasing ratio means the company has plenty of cash available to pay off its short-term debt in a timely manner. As a result, an increasing accounts payable turnover ratio could be an indication that the company managing its debts and cash flow effectively. To better keep track of these payments, companies and individuals can fall back on a reliable formula to help them pay bills and other obligations on time. This calculator will compute a company’s accounts receivable turnover rate […]