The Written-Down Value (WDV) is the value of an asset after accounting for depreciation. The WDV is the original cost of the asset, minus any accumulated depreciation. The WDV is used in financial accounting to value assets for balance sheet purposes. The WDV is the value at which an asset is carried on the balance … Read more
What Is EAC? EAC is an economic concept that allows for the comparison of costs incurred at different times. How Does EAC Work? EAC works by taking into account the time value of money, which is the idea that money is worth more now than it will be in the future. By taking into account … Read more
A special item is an accounting term that refers to an item on a company’s financial statements that is considered to be unusual or infrequent in nature. Special items can include items such as gains or losses from the sale of a business, restructuring charges, and other one-time items. What is meant by reporting unusual … Read more
What Is an Accrued Liability and How Does It Work? Are accruals assets or liabilities? Accruals are assets or liabilities that arise from events that have occurred but have not yet been recorded in the financial statements. For example, if a company has provided a service but has not yet invoiced the customer, the company … Read more
The Retail Inventory Method (RIM) is a technique used by retailers to estimate ending inventory levels and cost of goods sold. The RIM estimates these two key financial metrics by valuing a company’s inventory at the lower of cost or market and then applying a historical sales pattern to estimate the cost of goods sold. … Read more
Accounting conservatism is an accounting principle that requires accountants to use caution when recording estimates and to record losses before gains. This principle is also known as the “prudent man rule.” What are the 3 balance sheets? The 3 balance sheets are the balance sheet for assets, liabilities, and equity. What is a sentence for … Read more
A synthetic lease is a type of lease financing arrangement in which the lessee agrees to make all lease payments to a third-party lender, who in turn pays the lessor. The lessee also has the option to purchase the leased asset at the end of the lease term. The key advantage of a synthetic lease … Read more
Branch accounting is a system of accounting that is used to track the financial activities of a company’s branches. This system is used to provide accurate financial information about a company’s operations and to help manage its financial risks. Branch accounting is a system of accounting that is used to track the financial activities of … Read more
. What Is the Accounting Cycle? The accounting cycle is the process that companies use to record and report their financial activities. This cycle typically includes four main steps: 1. Recording financial transactions 2. Classifying and summarizing transactions 3. Preparing financial statements 4. Closing the books What are the three 3 basic processes of accounting? … Read more
The going concern principle is an accounting assumption that states that an organization will continue to operate for the foreseeable future. This means that the organization will not be forced to liquidate its assets and cease operations in the near future. The going concern principle is important because it allows organizations to keep their financial … Read more
