CFAJournal

Accounts Receivable Turnover: Definition, Industry Average, and Accounting Treatment

Definition of Accounts Receivable Turnover Accounts Receivable Turnover can be defined as the number of times on a yearly basis that a company collects its accounts receivables. This metric is used to measure the extent to which companies collect periods from their customers. Receivable Turnover is an accounting measure that is used to gauge the …

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What is the Average Collection Period? How Is It Calculated?

Accounting

Definition of Average Collection Period Average Collection Period is defined as the amount of time that is taken by the business to receive payments from its customers (or debtors) against the credit sales that have been made to these clients. This is a metric that is used by businesses to determine the number of days …

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Accounting for Available for Sale Securities: Definition, Type, Example and Journal Entries

Accounting

Definition for Available for Sale Security Available for Sale Security, can be defined as debt or equity securities that are purchased with the intent of selling before they reach maturity. These financial instruments are mentioned at fair value on the Balance Sheet. In technical terms, it can be seen that an Available for Sale security …

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10 Advantages of Sole Proprietorship You Should Know-The Ultimate Guide

Economic, Finance

One man business has many merits, and it is the simplest form of business. What are the top 10 advantages of sole proprietorship you should know that will help you decide whether you should prefer it to the partnership or not? Here I have discussed all pros of sole trading in detail to help you …

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What are the 10 Types of Entrepreneurs?- Complete Guide 2021

Economic, Finance

Each person thinks differently about business and uses different methods for establishing it. What are the 10 types of entrepreneurs, and what kind of business are they running? Without wasting time, move ahead to learn about all types of businesspeople in details 10 Types of Entrepreneur The following points will help you know what are …

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Aging of Accounts Receivable: What is it and why is it Importance?

Accounting

When you make sales from your business or offer a service to someone on credit, your accounts receivable will record such a transaction. For example, when you make credit sales, you provide your customer a note called an invoice, and then you record the invoice details into your accounts receivable. Thus, the receivable in your …

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What is Actual and Applied Overhead? (Definition, Example, and Explanation)

Accounting

Overhead costs are those costs incurred by a business, be it directly or indirectly related to manufacturing a particular product or service offered. They are costs relevant for the consistent running of the business. It is a necessary cost for every business as it helps determine the price to be fixed for each good produced …

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What Is The Future Value of An Annuity Due Table?

Accounting, Finance

Annuities are those series of payments made or received at regular intervals over time. It could be lump-sum or installment; such costs include rent payments, car payments, interest from bonds, retirement pension income, and the like. Say you want to buy a car worth $3,000,000 and you decide to pay a 6 payment interval of …

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What Are The 3 Appraisal Approaches? All You Should Know

Finance

Before possessing an asset via purchase, especially a property, it is necessary to run an appraisal to determine its market value. This appraisal can be approached through three means: the income approach, the cost approach, and the sales comparison approach. 1) The Income Approach The income approach is an appraisal method that permits appraisers to …

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Are Dividends an Expense or Revenue? (Explained)

Accounting

Introduction Dividends, whether cash dividends or stock dividends are not written down as an expense in the company’s financial statements. This is because they do not affect the profit in the income statement of the company. They are rather written down under the shareholder equity section of the company and hence affect the balance sheet. …

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