Accounting
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Period Costs: Definition, Examples & Impact on Financial Statements
Period costs are costs that cannot be capitalized on a company’s balance sheetBalance SheetThe balance sheet is one of the three fundamental financial statements. The financial statements are ke
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Percentage of Completion Method: Accounting Explained
The percentage of completion method is a revenue recognition accounting concept that evaluates how to realize revenue periodically over a long-term project or contract. Revenue, expenses, and gross pr
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Pension Accounting: A Comprehensive Overview for Businesses
In addition to salaries, many companies offer other benefits to their employees such as pension plans, health insurance, stock option benefits, fitness memberships, or life insurance plans. There are
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Payroll Accounting: A Comprehensive Guide for Businesses
Payroll accounting is essentially the calculation, management, recording, and analysis of employees’ compensationRemunerationRemuneration is any type of compensation or payment that an individua
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Par Value Explained: Understanding Bonds & Stocks
Par value is the nominal or face value of a bond, share of stock, or coupon as indicated on a bond or stock certificate. The certificate is issued by the lender and given to a borrower or by a corpora
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Understanding Business Overheads: Costs & Examples
Overheads are business costs that are related to the day-to-day running of the business. Unlike operating expenses, overheads cannot be traced to a specific cost unit or business activity. Instead, th
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Understanding Other Comprehensive Income (OCI): A Comprehensive Guide
Other comprehensive income consists of revenues, expenses, gains, and losses that, according to the GAAP and IFRS standardsIFRS StandardsIFRS standards are International Financial Reporting Standards
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Operating Margin: Definition, Calculation & Importance
Operating margin is equal to operating incomeOperating IncomeOperating income is the amount of revenue left after deducting the operational direct and indirect costs from sales revenue. divided by rev
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Operating Lease Explained: Benefits & How They Work
An operating lease is an agreement to use and operate an asset without the transfer of ownership. Common assetsTangible AssetsTangible assets are assets with a physical form and that hold value. Examp
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Operating Income (EBIT): Definition & Calculation
Operating income, also referred to as operating profit or Earnings Before Interest & Taxes (EBIT)EBIT GuideEBIT stands for Earnings Before Interest and Taxes and is one of the last
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Understanding Operating Expenses (OPEX): A Comprehensive Guide
Operating expenses, operating expenditures, or “opex,” refers to the costs incurred by a business for its operational activities. In other words, operating expenses are the costs that a co
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Understanding the Operating Cycle: Definition & Importance
An Operating Cycle (OC) refers to the days required for a business to receive inventoryInventoryInventory is a current asset account found on the balance sheet, consisting of all raw materials, w
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Operating Cash Flow Formula: Calculation & Explanation
The Operating Cash Flow Formula is used to calculate how much cash a company generated (or consumed) from its operating activities in a period, and is displayed on the Cash Flow StatementCash Flow Sta
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Understanding Operating Cash Flow (OCF): A Comprehensive Guide
Operating Cash Flow (OCF) is the amount of cash generated by the regular operating activities of a business within a specific time period. OCF begins with net incomeNet IncomeNet Income is a key line
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Understanding One-Time Charges: Definition & Financial Impact
A one-time charge, or non-recurring item, is a line item that is reported on the financial statements of a firm on an irregular basis. It is unrelated to a firm’s normal business operation
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OIBDA Explained: Understanding Operating Income Before Depreciation & Amortization
OIBDA is an abbreviation for Operating Income Before Depreciation and Amortization. It is a non-GAAP measure of the financial performance of a company during a specific period of time while excluding
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CPA vs. CFA: Understanding the Differences & Choosing the Right Finance Designation
The notice to reader report is a compilation of financial statements using financial data provided by the management. The report is prepared by an external chartered accountantCPA vs CFA®When cons
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Understanding IRS Notice of Deficiency: What You Need to Know
A notice of deficiency is a statutory notice that is sent by the Internal Revenue Service (IRS) to a taxpayer when there is a discrepancy in the tax return. The document is issued when the IRS propose
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Understanding Notes Receivable: A Comprehensive Guide
Notes receivable are a balance sheet item that records the value of promissory notesPromissory NoteA promissory note refers to a financial instrument that includes a written promise from the issuer to
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Understanding Notes Payable: A Comprehensive Guide
Notes payable are written agreements (promissory notes) in which one party agrees to pay the other party a certain amount of cash. Alternatively put, a note payable is a loan between two parties.A not
Accounting
- Flexible Budgets for Small Businesses: A Comprehensive Guide
- Understanding Days Payable Outstanding (DPO): A Key Metric
- Accounting vs. Tax Depreciation: Key Differences Explained
- Inventory Shrinkage: Causes, Impact & Reconciliation
- Accounts Payable Glossary: Essential Terms for Finance Professionals
- Understanding Operating Profit: Calculation & Analysis
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Cash Coverage Ratio: A Practical Guide for BusinessesThe cash coverage ratio is an accounting ratio th...
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Forecasting the Federal Reserve's Interest Rate Decisions with Futures MarketsEditors note: Weve dusted off this article that originally ran on April 21, 2015. Its worth a rerun because its usefulness for help tracking the Federal Reserves potentially too-close-to-call interest...
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Understanding Jail Bonds: How They Work & Bail AlternativesWhen people are arrested on suspicion of a crime, they don't necessarily have to stay locked up until trial. A judge may allow them to leave jail as long as they deposit a sum of money with the co...
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Navient Student Loans Review: A Comprehensive OverviewWith over 12 million borrowers served, Navient is one of the largest student loan servicers around. Navient has been in the news in recent years due to several lawsuits against the student loan giant....