Accounting

How to Account for Advance from Customers? (Example and Journal Entries)

What are customer advances? Customer advances can be defined as the amount that is taken from the customers in advance of the order actually being processed. In other words, customer advances are the payments that have been received from the customers in advance. Corresponding order fulfillment for that particular order has not been accounted for. …

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How to Account for Advance to Suppliers? (Example and Journal Entries)

In the modern-day business dynamic, a lot of transactions are carried out on credit. This involves organizations purchasing goods and services on credit, as well as selling goods and services on credit. Credit basically refers to paying at a later date and getting goods and services earlier in advance. This is a normal business practice, …

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Accrued Revenue: Definition, Measurement, Classification and Journal Entries

Accrued revenue is revenue that a business earns for providing goods or rendering services to its customers for which payment hasn’t been made yet. Accrued revenue is an important component of accrual accounting. It is important to understand the fundamental principles of accrual accounting and how these principles are applied in accounting for accrued revenue. …

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Accrued Rent: Definition, Measurement, Classification and Journal Entries

Many businesses have physical locations from where they operate. The need to have a business location compels businesses to either buy or rent a place for their operations. Accrued rent is therefore the sum of all rents that the tenant owes the landlord for making use of their property. Landlords normally receive rent in advance. …

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Accumulated Depreciation in Accounting: How do you calculate it

Depreciation expenses of an asset that is accumulated over the years are called accumulated depreciation. Fixed assets have a carrying amount resulting from the difference between the cost of fixed assets minus accumulated depreciation of that asset and any possible impairment. Accumulated depreciation is build up with the time once we start to depreciate an …

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Activity-based Costing (ABC Costing) Ultimate Guide (Step by Step Guide)

The conventional overhead allocation method assumes that various types of the fixed overhead cost can be absorbed in different products using a single overhead absorption rate. This approach of the conventional method is over-simplistic and does not seem to produce individual product costs with greater accuracy and precision. However, it’s quick, and the cost allocation …

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Accrued Wages (Definition, Measurement, Classification, and Journal Entry)

Definition Accrued wages refer to the total amount of liability that remains in the books of accounts at the end of an accounting period. These are the workers’ wages, but the business has not paid them as of period closing (although workers have performed their work). Recording of the accrued wages helps the business to …

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What is Adjusted Working Capital? (Calculation, Formular Example, and More)

Definition of Adjusted Working Capital Adjusted working capital is the measurement of a company’s operational working capital since it purely considers the operational aspect involved in the business. Similarly, it also removes the liquid and all non-operational components in the business, which are otherwise included. Technically, it can be seen that adjusted working capital mainly …

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