Consignment Definition & Meaning
In the UK, the term “consignment” is not used, and consignment shops that sell women’s clothing are called “dress agencies”. Although the other types of consignment shop exist, there is no general term for them. The consignment process can be further facilitated by the use of vendor managed inventory (VMI) and customer managed inventory (CMI) […]
Basic Accounting Equation
Capital is the amount of money invested in or borrowed by the company. The sum of all assets must thus equal the sum of all liabilities and capital in order for the statement to be balanced. The concept of assets equals liabilities plus equity is an important one in the world of accounting and finance. […]
Product vs Period Costs Accounting for Managers
On the other hand, in Marginal Costing only the variable cost is regarded as product cost. An example of such cost is the cost of material, labour, and overheads employed in manufacturing a table. If that reporting period is over a fiscal quarter, then the period cost would also be three months. If the accounting […]
How to Compute Various Overhead Cost Variances Formula
For instance, a manufacturing company can invest in robotic systems to handle repetitive tasks, reducing the need for manual labor and increasing production efficiency. This not only helps in cost reduction but also improves overall product quality and consistency. A volume variance arises only when a business decides the budgeted plan based on theoretical standards, […]
Financial Accounting: Foundations
Financial accounting is fundamental to business operations, offering insights into a company’s financial health and aiding stakeholders in making informed decisions. It presents an accurate picture of financial performance and position, which is essential for managing or analyzing businesses. This discussion explores its components and how it influences strategic decision-making. This makes it easier for […]
Journal Entry for Prior Year Adjustment Example
It’s crucial to ensure the accuracy of all financial transactions and records at all times. The quicker the error is corrected, the less impact it is likely to have on the business’s financial standing and decision making. A correcting entry in accounting fixes a mistake posted in your books. For example, you might enter the […]
Book balance: What is bank balance and book balance?
As a result, the interest earned would not be reflected in the book balance until the interest has been credited and the bank account reconciliation has been performed. In order to manage its cash flow activities and make sure it has enough money payroll to function efficiently, Company X must keep records of its outstanding […]
6 Ways To Increase Profit Margin for Businesses
Whatever the nature of your business, not every product you sell is likely to carry the same product margin, nor does it sell in the same volume. Products or services that sell in high volumes and carry high margins are your superstars and staff should be trained to push these through upselling where possible. Those […]
