Classic examples include rent payments made in advance, prepaid insurance, legal retainers, airline tickets, prepayment for newspaper subscriptions, and annual prepayment for the use of software. Finally, depreciation is not intended to reduce the cost of a fixed asset to its market value. Market value...
The variability of sales level (operating leverage) or due to fixed financing cost affects the level of EPS (financial leverage). To calculate both operating leverage and financial leverage, EBIT is referred to as the linking point in the study of leverage. When calculating the operating...
The IRS requires taxpayers keep "documentary evidence" of most expenses. Documentary evidence is tangible, written proof you actually irs receipt requirements had an expense. Receipts, canceled checks, bank statements or bills are generally fine, but an estimate of an expense won't cut it. Finally, if you...
Now it’s important to note that sales revenue differs from your company's profits. Profit is the income that is left over after you deduct your COGS. To find your sales revenue, either look at your financials, like income statements, or calculate all of your earnings...
Once seen as slow in aligning with emerging technology, the manufacturing industry is quickly embracing it owing to its many benefits to its operations. In this post, we’re talking all things net income computing net income using accounting equation and how to calculate it. We’ll...