Lenders and creditors rely on the current ratio to evaluate the liquidity of a borrower, and so might incorrectly lend money based on an excessively high current ratio. In the context of inventory, net realizable value is the expected selling price in the ordinary https://www.online-accounting.net/ course of business minus any costs of completion, disposal, and […]

The IRS has defined business expenses as “the cost of carrying on a trade or business,” going on to say that these expenses are usually deductible if the business operates to make a profit. Educating yourself about the common small business expense categories will make it much easier to determine what is and isn’t deductible […]

This opinion is needed when an organization needs audited financial statements to obtain funding from investors. Business intelligence is an important component of resource allocation, especially for tracking project performance. Learn about some common business intelligence challenges organizations face and how to handle them. In practicing resource allocation, organizations must first establish their desired goal, […]

If the company produces 1,000 products, the standard direct labor expense will be $6,000 ($12 x 0.5 x 1,000). In the third step of our calculation, we will add in all the other expenses that should be included in our total labor cost formula. How to calculate direct labor ratesThe first step to calculating the […]

This makes it so the interest is not recognized in the current period as an interest expense. Instead, capitalized interest is treated as part of the fixed asset or loan balance and is included in the depreciation of the long-term asset or loan repayment. Capitalized interest appears on the balance sheet rather than the income […]