Debt Factoring And Invoice Discounting

Just-in-Time (JIT) Inventory Management Definition Key Facts Definition: Just-in-time (JIT) is an inventory management method where goods are received from suppliers only when they are needed for production. Objective: The main goal of JIT is to minimize inventory levels and associated costs, such as storage and obsolescence, while ensuring that…

Cash costs in mining represent the direct costs incurred during the extraction and processing of ore at the site level. These costs are calculated per unit of output and typically include expenses such as: Key Facts Definition: Cash costs are the regular direct costs incurred in the mining and processing…

The EV/EBITDA Multiple The EV/EBITDA ratio is a popular metric used as a valuation tool to compare the value of a company, debt included, to the company’s cash earnings less non-cash expenses. It’s ideal for analysts and investors looking to compare companies within the same industry. What does an EV…

The allowance for impairment of receivables is a contra account that reduces the total receivables presented on the balance sheet to reflect the estimated amount of receivables that are expected to be uncollectible (Investopedia, n.d.). Key Facts Definition: The allowance for doubtful accounts is a contra account that reduces the…

Identifying Outstanding Checks Outstanding checks are checks issued by a company that have been recorded in its general ledger but have not yet cleared the bank account. To identify outstanding checks, companies can compare the checks issued in a given period to the bank statement for the same period. Any…

Definition and Purpose Collateral is a valuable asset that a borrower pledges to secure a loan. It serves as a form of protection for lenders, reducing the risk associated with lending money. By offering collateral, borrowers provide lenders with a physical asset that can be seized and sold to recover…

“Without recourse” means that one party cannot obtain a judgment against, or reimbursement from, a defaulting or opposing party in a financial transaction. When the buyer of a promissory note or other negotiable instrument enters into a “no recourse” agreement, they assume the risk of default. What does it mean…

Unbilled expenses can clutter your QuickBooks records and slow down invoice loading. This article provides a comprehensive guide on how to effectively remove unbilled expenses, ensuring accurate and efficient bookkeeping. Key Facts Open QuickBooks and go to the “Customers & Leads” section in the menu. Look for the tracker at…

Fluctuating working capital refers to the portion of a company’s working capital that varies in accordance with its business needs and operations. It is not a fixed amount and can change over time, influenced by factors such as business growth, seasonality, and market conditions. Key Facts Definition: Fluctuating working capital…

Highest In, First Out (HIFO) Definition Key Facts Definition: HIFO is a method of accounting for a company’s inventories where the inventory with the highest cost of purchase is the first to be used or taken out of stock. Impact on Financial Statements: Using HIFO will result in the highest…

The accounting cycle is a systematic process that ensures the accuracy and reliability of financial reporting. It involves a series of steps that transform raw financial data into comprehensive financial statements. This article explores the eight crucial steps of the accounting cycle, highlighting their significance in the financial management of…

The direct write-off method is an accounting technique used to record uncollectible debts. While it offers simplicity, it presents several disadvantages that limit its applicability and adherence to accounting principles. Key Facts Violation of the matching principle: The direct write-off method goes against the matching principle in accounting, which states…

Purpose of the Memo Field The memo field in QuickBooks serves as a tool for recording adjustments to customer balances and documenting discounts applied to their accounts. It allows businesses to provide additional information and context regarding transactions. Key Facts Purpose: The memo field is used to record any changes…

How to Prepare a Common Size Income Statement A common size income statement is a financial statement that expresses each line item as a percentage of a base figure, typically total revenue or sales. This allows for easy comparison and analysis of a company’s financial performance over time or against…

A cash flow statement is a financial statement that summarizes the amount of cash and cash equivalents (CCE) entering and leaving a company. The CFS highlights a company’s cash management, including how well it generates cash to pay its debt obligations and fund its operating expenses. Key Facts Cash flow…

Deposits in transit represent funds received by a company but not yet reflected in its bank statement. Identifying and accounting for these deposits is crucial for accurate financial reporting. This article provides a step-by-step guide on how to find deposits in transit, utilizing authoritative sources such as Emagia and AccountingCoach.…

Moving Weighted Average Method Definition The moving weighted average method is a technique used in data analysis and forecasting to calculate an average value by assigning different weights to different data points. It gives more importance to recent data points and less importance to older data points. Calculation The moving…

Function of the Posting Reference (PR) Column The Posting Reference (PR) column is a crucial element in accounting, serving as a tool to enhance organization and clarity in the posting process. Its primary purpose is to indicate when entries have been posted to the ledger accounts, ensuring that each journal…

Gross fixed assets represent the total value of a company’s fixed assets before considering depreciation and impairment. Net fixed assets, on the other hand, reflect the value of fixed assets after subtracting accumulated depreciation and impairment. Key Facts Determine the net fixed assets: Net fixed assets represent the net value…

Entering Opening Balances When establishing a new accounting system, it is important to enter accurate opening balances for all accounts. These balances represent the financial position of the company at the start of the new system and are crucial for generating accurate reports. Determining the Type of Account Before entering…