The amount of profit retained often provides insight into a company’s maturity. More mature companies generate more net income and give more to shareholders. Less mature companies need to retain more profit in shareholder’s equity for stability. Now, if you paid out dividends, subtract them and total the ending balance. This is the new balance in … Leer más
If there are conditions included in the sales agreement (e.g.the client may cancel the sale) a business can only recognize revenue after the expiry of that condition. However, if customers have the right to a refund, a business could recognize that revenue, but they need to include an allowance for the refund. Revenue realization occurs … Leer más
For the receiver, we should set up strict policies to clear the check on time to prevent any unexpected issues such as loss or fraud. The check should be deposited within a month after receiving it from the customers to ensure that they are properly clear. As the issuer, we will be able to know … Leer más
Fixed manufacturing overhead costs are indirect costs and they are absorbed based on the cost driver. Variable overhead costs directly relating to individual cost centers such as supervision and indirect materials. You need to allocate all of this variable overhead cost to the cost center that is directly involved. Let’s walk through an example of … Leer más
