For companies in the business of lending money, Interest Revenues are reported in the operating section of the multiple-step income statement. The interest revenue account, which is ultimately reflected on company income statements, includes all int... Read more
A business buys one year of general liability insurance in advance, for $12,000. The initial entry is a debit of $12,000 to the prepaid insurance (asset) account, and a credit of $12,000 to the cash (asset) account. In each successive month for the... Read more
This surgical robot has a master-slave manipulator arrangement using articulating robotic arms (slave) controlled by a remote console (master). Images viewed by the operating surgeon in the console are three-dimensional (3D), and instruments allow s... Read more
The company compares the cost of each job with the revenue received to be sure the jobs are profitable. Sometimes the company learns that certain jobs are too costly considering the prices they can charge. For example, Creative Printers recently lea... Read more
Cost of goods sold is found on a business’s income statement, one of the top financial reports in accounting. An income statement reports income for a certain accounting period, such as a year, quarter or month. Logically, all nonoperating cos... Read more
There are two primary methods for estimating the amount of accounts receivable that are not expected to be converted into cash. A reserve for doubtful debts can not only help offset the loss you incur from bad debts, but it also can give you valuabl... Read more
The heater was originally purchased at $2,000.00, it’s been in use for 4 years, and has depreciated an average of 10% per year. To calculate a salvage value, divide the depreciation % per year by 100, and multiply that value by the original p... Read more
Gross margin, which may also be called gross profit margin, looks at a company's gross profit compared to its revenue or sales and is expressed as a percentage. This figure can help companies understand whether there are any inefficiencies and if cu... Read more
Without looking at your gross revenue over the same period, you can’t tell whether your business’s net income is changing because of fluctuations in sales or expenses. While interest payments are another item that you’ll deduct fro... Read more
The accounting rate of return is an alternative evaluative tool that focuses on accounting income rather than cash flows. This method divides the average annual increase in income by the amount of initial investment. For Mirage’s project, the... Read more
