Off-balance sheet financing (OBSF) is a term used to describe financing transactions that are not recorded on a company’s balance sheet. These transactions are often used to reduce a company’s debt-to-equity ratio or to avoid debt covenant violations. OBSF can take many forms, but the most common are operating leases, finance leases, and sale-leaseback transactions. … Read more
How Stock-Keeping Units Work and How Businesses Can Use Them What is the difference between SKU and quantity? SKU stands for “Stock Keeping Unit,” and is a unique identifier for a product. Quantity is a measure of how many of a particular SKU are in stock. Which of the following is the design principle for … Read more
Capacity requirements planning (CRP) is a manufacturing process that determines the desired amount of future business and then plans for the necessary resources to accommodate that projected demand. CRP begins with sales forecasts, which are used to create production plans that detail the specific products that need to be manufactured, and when they need to … Read more
Two-bin inventory control is a system used to effectively manage inventory levels and track stock. In a two-bin system, there are two bins for each item: a “live” bin and an “empty” bin. The live bin is where inventory is kept and replenished as needed, while the empty bin is used to track stock levels … Read more
An “accounts receivable subsidiary ledger” is a ledger that provides detailed information about a company’s accounts receivable. This information can include the name and contact information of the customer, the invoices that are owed, the amount owed, and the date the invoices are due. This information can be used to help a company keep track … Read more
“What is business income?” is a question often asked by small business owners and entrepreneurs. Business income is the total revenue generated by a business less the total expenses incurred by the business. The net income of a business is its business income after taxes. What are the 7 types of income? There are seven … Read more
A write-up is an accounting procedure used to make an adjustment to an account. The purpose of a write-up is to bring the account balance up to its correct value. This is done by adding the missing amount to the account. For example, if an account has a balance of $100 and it should have … Read more
A cash flow plan is a tool that businesses use to track and forecast their inflows and outflows of cash. The purpose of a cash flow plan is to ensure that a business has enough cash on hand to meet its financial obligations as they come due. A cash flow plan typically includes a forecast … Read more
In accounting, accumulated income refers to the total income that a company or individual has earned over a period of time. This figure includes both current and past income, and can be used to measure the financial health of a business or individual. Is accumulated value the same as future value? No, accumulated value is … Read more
Delivered Duty Unpaid Shipping When ordering something from an online store, you may come across the shipping terms “Delivered Duty Unpaid” or “DDU”. This means that the seller is not responsible for paying any customs duties or taxes that may be levied on the goods when they arrive in the destination country. The buyer will … Read more
