Accounting
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Weighted Average Cost (WAC): Definition & Calculation
In accounting, the Weighted Average Cost (WAC) method of inventory valuation uses a weighted average to determine the amount that goes into COGSCost of Goods Sold (COGS)Cost of Goods Sold (COGS) measu
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Understanding Warranty Expense: Definition & Impact
Warranty expense is an expense related to the repair, replacement, or compensation to a user for any product defects. In other words, a vendor or manufacturerOriginal Equipment Manufacturer (OEM)An Or
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Understanding Wage Expense: Definition, Types & Accounting
Wage expense refers to the cost incurred by an organization to compensate employees and contractors for work performed over a specific time period. SummaryWage expense is a type of variable
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Understanding Vouchers: A Guide to Accounts Payable Documents
A voucher is an internal document within a company that is issued by the accounts payable Accounts PayableAccounts payable is a liability incurred when an organization receives goods or services from
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Understanding Voodoo Accounting: Risks and Red Flags
“Voodoo accounting” is a slang term that describes a system through which profits for a company can be inflated. Unscrupulous and/or flat-out illegal methods of financial record-keeping ar
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Voluntary Tax Compliance: Understanding the U.S. Tax System
Voluntary compliance is an assumption under which the U.S. tax system operates. It is the principle for which all the taxpayers will cooperate with the tax system, filing an honest and accurate annual
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Vertical Analysis: A Comprehensive Guide to Financial Statement Analysis
Vertical analysis is an accounting tool that enables proportional analysis of documents, such as financial statements. While performing a vertical analysis, every line item on a financial statement is
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Variance Analysis: Understanding & Improving Performance
Variance analysis can be summarized as an analysis of the difference between planned and actual numbers. The sum of all variances gives a picture of the overall over-performance or under-performance f
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Variable Overhead Spending Variance: Definition & Analysis
Spending variance is a term used to describe the difference between the real amount associated with a certain expense and the expected amount associated with the same expense. It is the relation of th
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Understanding Variable Overhead Efficiency Variance: A Comprehensive Guide
Variable overhead efficiency variance is a measure of the difference between the actual costs to manufacture a product and the costs that the business entity budgeted for it. Thus, it can arise from a
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Understanding Variable Overhead Costs: A Comprehensive Guide
Variable overhead refers to the fluctuation in the manufacturing costs associated with the operation of businesses. To operate continuously, companies need to spend money on the production and sale of
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Understanding Variable Costs: Definition & Examples
Variable costs are expenses that vary in proportion to the volume of goodsInventoryInventory is a current asset account found on the balance sheet, consisting of all raw materials, work-in-progre
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Variable Costing Explained: A Clear Guide for Businesses
Variable costing is a concept used in managerial and cost accounting in which the fixed manufacturing overhead is excluded from the product-cost of production. The method contrasts with absorption cos
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Variable Cost Ratio: Definition, Calculation & Importance
The variable cost ratio is a cost accounting tool used to express a company’s variable production costs as a percentage of its net sales. The ratio is calculated by dividing the variable costs b
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Understanding Value Reporting Forms for Businesses
A value reporting form is an insurance report used to monitor the coverage level of commercial businesses with changing inventory values over time. The constant changes in inventory are a result of ch
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Understanding Value Added Tax (VAT): A Comprehensive Guide
Value Added Tax (VAT), also known as Goods and Services Tax (GST) in Canada, is a consumption tax that is assessed on products at each stage of the production process – from labor and raw materi
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Understanding Utilities Expense: Definition & Accounting
Utilities expense is the cost incurred by using utilities such as electricity, water, waste disposal, heating, and sewage. The expenses are incurred over the course of the reporting period, calculated
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Mastering FP&A: A Guide to Understanding the Core Financial Statements
Anyone working in the financial planning and analysis (FP&A) department should be very familiar with the three financial statements in FP&A – Income StatementIncome StatementThe Income S
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Understanding Earnings Surprises: What Are They?
“Unexpected earnings” is the term used in accounting to address the difference between a company’s actual earnings for a period and the earnings they were expected to generate. It is
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Unearned Revenue: Definition, Examples & Accounting Explained
Unearned revenue, sometimes referred to as deferred revenueDeferred RevenueDeferred revenue is generated when a company receives payment for goods and/or services that it has not yet earned. In accrua
Accounting
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Branch App Review: Fast Cash Alternative to Payday LoansPros Cons No advance fee — unless you want money “instantly” Advance amounts limited No membership fees Must have a debit card from a supported bank Not available to re...
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Family Water Budgeting: Tips & Conservation StrategiesWant to learn more? Check out these water conservation videos for more strategies, tips and information about saving this precious resource. Whether you live in the temperate southern regions ...
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Retiring on Social Security Alone: Is It Possible in 2024?Image Credit: Douglas Sacha/Moment/GettyImages Funded by the Federal Insurance Contributions Act (FICA) tax withholdings from your earnings, Social Security retirement benefits act as a safety net ...
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Effective Annual Rate (EAR): Understanding & CalculationThe Effective Annual Rate (EAR) is the rate of interestInterest ExpenseInterest expense arises out of a company that finances through debt or capital leases. Interest is found in the income statement,...