General Accounting Tips

  • Average Accounts Receivable: An Important Variable in Managing Customers' Accounts

    "Calculate average accounts receivable! That is very easy, Miss Dannison. I just wonder why you need this for our portfolio. Know anything about it?" asks Terry, Miss Dannison's assistant. "I need the amount for the financial analysis...
    By madel57 May 24, 2011 

  • How Inflation Affects the Market Value and Book Value of Assets

    Inflation can have a large impact on the discrepancy between an asset’s book and market value. Learn how inflation and the time value of money affect market and book values of assets.
    By John Garger May 24, 2011 

  • Examples of Target Gross Margins

    Target gross margins vary greatly across different industries, depending on a number of factors such as the level of competition in the industry and the nature of the product or service provided. Examples of target gross margins in the retail and service...
    By Peter Hann May 23, 2011 

  • Unearned Revenue: Examples & Explanation

    Unearned revenue, if considered by its title alone, could mislead a learner into treating it as an income account. However, accounting rules dictate that this should first be recorded as a liability. Our explanations and examples focus on this to help...
    By ciel s cantoria May 23, 2011 

  • Importance of a Trial Balance in a Financial Statement

    In the world of financial accounting you really can’t produce accurate financial statements without a trial balance. What is the importance of a trial balance in financial statements? Jean Scheid offers some insights.
    By Jean Scheid May 23, 2011 

  • Putting Together a Trial Balance

    If you’re lost in the world of financial accounting, consider the trial balance as the soul of your accounting system. Every journal entry or transaction flows into the trial balance, but how do these entries get there? Jean Scheid explains...
    By Jean Scheid May 22, 2011 

  • Basics of Trust Accounting

    The trustees have a duty of care towards the beneficiaries of the trust, and must conform to legal and tax requirements relating to the trust. To enable them to do this, it is essential that they keep adequate accounting records and the trustees must...
    By Peter Hann May 22, 2011 

  • EBIT vs. EBITDA: Comparison of Credit Exposure Analysis

    In comparing EBIT vs EBITDA, most of the differences in their use as credit risk analysis tools pertain to the differences of outlooks in the lender's credit exposure. Traditionally, EBIT excluded only income tax, hence there was a considerable difference...
    By ciel s cantoria May 22, 2011 

  • Reasons Why LIFO is Outdated

    LIFO's outdated approach has opened the door to more and more companies using either FIFO (First In First Out) or average cost inventory valuation methods. Overall, any short-term gains with LIFO are easily eliminated when companies are then...
    By Ian Johnson May 22, 2011 

  • How Does the Matching Principle Affect Business Accounting Procedures?

    What do period costs, product costs and revenue recognition all have in common? They are all components of the matching principle of GAAP. Not only that, they play an integral role in the proper bookkeeping of accrual accounting and the presentation...
    By Alice Rovney May 22, 2011 
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