Basics 8 min read
What is the difference between an implicit cost and an explicit cost?
An implicit cost is a cost that has occurred but it is not initially shown or reported as a separate cost. On…
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Basics 6 min read
What are prepaid expenses?
Prepaid expenses are future expenses that have been paid in advance. You can think of prepaid expenses as costs that…
Basics 4 min read
What are nonmanufacturing overhead costs?
Nonmanufacturing overhead costs are the business expenses that are outside of a company’s manufacturing operations. These are often referred to…
Basics 6 min read
What is the difference between product costs and period costs?
A manufacturer’s product costs are the direct materials, direct labor, and manufacturing overhead used in making its products. (Manufacturing overhead is also referred to as…
Basics 5 min read
What is the meaning of equity?
Equity is used in accounting in several ways. Often the word equity is used when referring to an ownership interest in a…
Basics 5 min read
What is the cost of sales?
Cost of sales is the caption commonly used on a manufacturer’s or retailer’s income statement instead of the caption cost of goods…
General Concepts 2 min read
What makes P&ID important?
That’s a real question. You must know as a graduate chemical engineer why it is so important. And with that,…
Basics 7 min read
What is the difference between financial accounting and management accounting?
Financial accounting has its focus on the financial statements which are distributed to stockholders, lenders, financial analysts, and others outside of the company.…
Basics 5 min read
What are accrued expenses and when are they recorded?
Accrued expenses are expenses that have occurred but are not yet recorded through the normal processing of transactions. Since these expenses are…
Basics 7 min read
What is petty cash?
Petty cash meaning Petty cash is a small amount of cash on hand that is used for paying small amounts owed,…
Basics 6 min read
What is owner’s equity?
Owner’s equity is one of the three main components of a sole proprietorship’s balance sheet and accounting equation. Owner’s equity represents the owner’s…
Basics 6 min read
How do I calculate the amount of sales tax that is included in total receipts?
To calculate the sales tax that is included in a company’s receipts from items subject to sales tax, divide the receipts by…
