Job Order costing vs Process Costing Manufacturing costing refers to the process of determining the total cost associated with producing a good. It’s essential for manufacturers to understand these costs for various reasons: Pricing products profitably: By knowing the cost to produce each item, businesses can set prices that cover Read more…
The 5 primary account categories are assets, liabilities, equity, expenses, and income (revenue) Once you understand how debits and credits affect the above accounts, it’s easier to determine where to place your sub-accounts. source
The main purpose of the accounting cycle is to keep track of all financial activities that occur during a specific accounting period, be it monthly, quarterly or annually. In short, the accounting cycle verifies that every dollar going into or out of the various general-ledger accounts is reported. source
In the accounting world, the journal, ledger, and trial balance are fundamental tools used to record, organize, and summarize financial transactions. Here’s a breakdown of each: **1. Journal:** A journal is a chronological record of all financial transactions of a business. Each transaction is recorded on a separate line, including Read more…
A balance sheet is a financial statement that provides a snapshot of a company’s financial condition at a specific point in time. It is one of the three core financial statements, along with the income statement and cash flow statement, used to assess a business’s health. Here’s a breakdown of Read more…
Both **current assets** and **fixed assets** are categories used to classify the resources a company owns, but they differ in their key characteristics and role within a business. Here’s a breakdown of their key differences: **1. Timeframe:** * **Current assets:** As the name suggests, these are short-term assets that a Read more…
The five major accounts in accounting are: * **Assets:** These represent the resources a business owns. They are the things with monetary value that the business can use to operate and generate future economic benefits. Assets can be categorized into current assets (cash, inventory, accounts receivable) and long-term assets (property, Read more…