Accounting Category: Expenses

Accounting Articles

September 10, 2015

Differences between accounts payable (balance sheet) and expenses (income statement) are sometimes confusing.In this article, we will discuss such differences and show how the two types of accounts can be connected in a journal entry.

February 20, 2015

Valuation of fixed assets has always been a contradictory issue for standards setters. Accounting for fixed assets at historical costs decreases the likelihood of manipulation, while accounting for fixed assets at fair values provides more relevant information to users of financial statements. In this article we will review US GAAP rules about initial measurement and subsequent accounting for fixed assets, and compare them with the IFRS requirements.

February 12, 2015

These days companies manufacture a lot of product varieties.Each product requires multiple parts to be created. Manufacturers can produce such parts themselves or they can buy them. Of course, the choice of producing parts or buying them includes various aspects and one of them is cost.In this article, we will discuss make or buy decisions.

January 17, 2015

Most costs capitalized to manufactured or constructed assets are easy to differentiate from costs that should be immediately expensed. In this article, however, well cover a more obscure cost that should be allocated to constructed fixed assets interest on the debt used to finance the construction project.

December 29, 2014

You have probably heard about economies of scale, but may not be sure how they work.In this article, we will discuss when economies of scale take place.

November 26, 2014

Debt is a common financing tool for most corporations. In this article, well discuss what happens when a company has trouble paying its legal bond obligations.

October 27, 2014

Revenue recognition is one of the key issues accountants have to deal with on a regular basis. Its usually straightforward for a merchandiser, but when should revenue be recognized when the company accepts a contract that will take several months to several years to complete? In this article, well discuss two methods for recognizing revenue from contracts.

October 20, 2014

In this article, well discuss progress billings, one of the facets of accounting for long-term contracts. More than just a record of invoices sent to the client, the amount of billings determine, in part, what appears on the balance sheet.

October 12, 2014

Corporate bonds are bought and sold in secondary financial markets around the world. This begs the question can a company purchase its own bonds just like it can purchase its own stock?

September 28, 2014

Most businesses use fixed assets which are typically depreciated. Such depreciation can be classified as direct or indirect expense. How can one distinguish between the two? In this article we will discuss this question and provide examples.

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