Asset

Asset is a resource having economic value someone owns or controls with an expectation of getting future economic benefit. In business or accounting, an asset is an economic resource that an individual, a company, a corporation or a country purchased, acquired or achieved which contributes to generating income or cash flow. An asset can be … Read more

Consignment

Consignment is a collection of goods or materials to be sent, in transit or having been sent by owner (consignor) to another person or agent’s (consignee) custody for sale, keeping legal ownership of the goods or materials until they are sold. If sold the consignor will get the payment for sold items. Otherwise, will be … Read more

Normal spoilage

Normal spoilage is the unavoidable part of spoilage occurs in a production process. It will occur even the production process is operated with the highest efficiency. That is why it is also known as predetermined or planned spoilage. Manufacturers typically set a rate of normal spoilage based on their product type. Cost of normal spoilage … Read more

Accelerated depreciation

accelerated-depreciation

Accelerated depreciation method is a depreciation method that charges major portion of the cost of assets in earlier years and minor portion in later years of assets life. This depreciation method defers tax liabilities in earlier years of assets life since higher depreciation expense reduces taxable income. The logic behind the accelerated depreciation method is … Read more

Payroll

payroll

Primarily, Payroll refers to “the list of all employees of an organization or company”. Nowadays it became a polysemic word. It has some other meanings too, these are: Payroll means the employees of an organization, along with their information. Payroll is the total amount of money an organization pays to its employees during each pay … Read more

CPA – Certified Public Accountant

become-a-cpa

Certified Public Accountant or CPA is a professional accounting degree. From another perspective, CPA is the license to provide accounting services to public. In many English speaking countries, CPA is the title for qualified accountants who provide business and financial consulting services. In United States, to become a CPA you must fulfill the ‘3E’ requirement. … Read more

EBITDA

EBITDA stands for Earnings before Interest, Taxes, Depreciation, and Amortization. It refers to the earnings of a company before interest, taxes, depreciation, and amortization are deducted. That is, it is understood as the gross operating profit calculated before the deduction of financial expenses and accounting deductions. Although it is not part of the income statement … Read more

What is Leverage? How does it work and what are the risks?

Financial Leverage

The term “financial leverage” is a recurring term in the business sector, which means the use of debt to finance business operations or investment. In this article, we will know what is the leverage, how it works and what are its advantages and its risks. What is leverage? Financial leverage is the use of debt … Read more

What is a letter of credit? How does it work?

Letter of Credit

The letter of credit (LC) also called “commercial credit” or “documentary credit”, is one of the most reliable means of payment in international trade. In this article, we will try to understand what is the letter of credit, how does it work, what types there are and some more curiosities of this instrument, that is … Read more