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 …
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Cash Cost in Mining
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 …
Leia maisWhat does an EV Ebitda multiple mean?
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 …
Leia maisAllowance for Impairment of Receivables
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 …
Leia maisRecording Outstanding Checks in Company Accounts
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 …
Leia maisUnderstanding Collateral: A Guide for Borrowers
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 …
Leia maisWhat does without recourse mean in real estate?
“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, …
Leia maisFluctuating Working Capital: Definition and Management
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, …
Leia maisHow to Remove Unbilled Expenses in QuickBooks
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 & …
Leia maisThe Accounting Cycle: A Comprehensive Overview
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 …
Leia maisWhat is HIFO?
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 …
Leia maisDisadvantages of the Direct Write-Off Method
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 …
Leia maisUnderstanding the Memo Field in QuickBooks
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 …
Leia maisHow do you prepare a common size income statement?
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 …
Leia maisWhat Items Go on a Cash Flow Statement?
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 …
Leia maisHow to Find Deposits in Transit
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 …
Leia maisWhat is moving weighted average method?
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 …
Leia maisWhat function does the PR column serve?
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 …
Leia maisHow to Calculate Gross Fixed Assets from Net Fixed Assets
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 …
Leia maisHow do you enter opening balances?
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 …
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