Therefore, variable costing is not permitted for external reporting. It is commonly used in managerial accounting and for internal decision-making purposes. Variable costing poorly upholds the matching principle, as related expenses are not recognized in the same period as related revenue. Comparison of Costing Methods Accurate financial reporting enhances transparency and trust among stakeholders, including […]
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Unlike the previous method of recognizing revenue, the percentage-of-completion method allows contractors to recognize revenue as they earn it over time. Next, we explore the second method to recognize revenue with a different way of recording expenses and income — the completed-contract method. Revenue recognition is how construction contractors collect financial means for their business. […]
You should be able to access your accounts via a web browser and also smartphone and tablet apps. Modern accounting software can link to the internet banking facilities of most major banks. This lets you manage all aspects of your money, without even entering a bank branch. Your bank account is an integral part of […]
Read More… from Cloud Accounting Startup Xero Expands Payroll Product In The US
Direct materials are often typical variable costs, because you normally use more direct materials when you produce more items. In our example, if the students sold 100 shirts, assuming an individual variable cost per shirt of $10, the total variable costs would be $1,000 (100 × $10). If they sold 250 shirts, again assuming an […]
Read More… from Contribution Margin: What it is and How to Calculate it
Sal goes into his accounting software and records a journal entry to debit his Cash account (an asset account) of $1,000. Today, most bookkeepers and business owners use accounting software to record debits and credits. However, back when people kept their accounting records in paper ledgers, they would write out transactions, always placing debits on […]
Read More… from Debits VS Credits: A Simple, Visual Guide Bench Accounting