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Gross sales include the total revenue generated by a company before any deductions. The key components of the net sales formula include deducting sales returns, sales deductions, and any discounts or allowances from the gross sales. The company’s gross sales minus its returns and deductions will give the net sales […]
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One tool that lenders use to evaluate the performance and financial health of a company is the calculation of financial ratios for various scenarios of revenues and expenses. Lenders use ratios to gauge a company’s liquidity, profit performance and debt-to-equity leverage. To prepare a pro forma statement, you can use […]
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While the invoice hasn’t yet been submitted, the cost for the work will be $1,500. Because the company hasn’t paid this yet, it will be noted as an accrued expense. When using accounting software, the software automatically creates the offsetting liability entry when the ledger expense is added. When it […]
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Thus, it is required to find a curve having a minimal deviation from all the measured data points. This is known as the best-fitting curve and is found by using the least-squares method. While specifically designed for linear relationships, the least square method can be extended to polynomial or other […]
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The mark to market value equals $120 (20 shares x the current price of $6). On the other hand, if the stock drops to $4 per share, then the mark to market https://www.bookstime.com/ equals $80, and the investor has an unrealized loss of $20. Mark to market can serve as […]
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If you qualify for tax credits, you can apply them to your tax bill to lower the amount due on a dollar-for-dollar basis. Some credits are even refundable, meaning that if their total value wipes out your tax bill completely, you can get the excess money attributed to the credits […]
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Unlike other costing methods which analyze the profitability of an investment on a period basis, life cycle costing traces cost and revenues over several periods. Companies that use life cycle costing are those that place an emphasis on long-term planning cost accounting basics so that their accumulated profits over several […]