The accounts are closed to a summary account (usually, Income Summary) and then closed further to the capital account. Again, take note that closing entries are made only for temporary accounts. Real or permanent accounts, i.e. balance sheet accounts, are not closed. Making two entries for each transaction means you can compare them later. All […]
A change in the cost of electric power or a raise given to a CEO can cause variances. The amount by which actual cost differs from standard cost is called a variance. When actual costs are less than the standard xero odbc driver featured cost, a cost variance is favorable. When actual costs exceed the […]
With a contribution margin of $40 above, the break-even point is 500 units ($20,000 divided by $40). Upon selling 500 units, the payment of all fixed costs is complete, and the company will report a net profit or loss of $0. The break-even analysis relies on three crucial aspects of a business operation – selling […]
No matter what method you use, your invoice should have the right information to help you get paid. Invoices are also used for audits, financial tracking and analysis, and tax preparation. Using software is probably the fastest and most efficient way to make an invoice for freelance work. Invoicing Basics for Freelancers and Contractors If […]
The cost of goods manufactured (COGM) calculates the total value of the progress inventory considering the total manufacturing cost incurred to produce the finished products for retail. After the calculation, the COGM value is then transferred to a final inventory account. This method assigns all manufacturing overhead expense to Units of Production based on direct […]
The formula for calculating the Accounts Payable (AP) Turnover Ratio is a simple yet powerful tool that can help you assess your company’s efficiency in managing its payables. By understanding this formula, you can gain valuable insights into your procurement process and make informed decisions to optimize cash flow. The AP turnover ratio provides important […]
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