Category: Bookkeeping

  • Process Costing System: Examples, Methods, and Steps

    By using process costing, manufacturers can track the cost of production per unit and ensure that inventory is managed effectively, reducing waste and increasing efficiency. Using a process costing system also enables better inventory management. The system provides accurate cost data, allowing the manufacturers to calculate the cost of goods sold and the inventory process […]

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  • Prepaid Rent Under ASC 842 a Step-By-Step Guide & Example

    During bookkeeping, the prepaid rent account enables the bookkeeper to track the value of the prepaid rent as an asset until the time that the prepayment amount in the account is used up. Therefore, when a company prepays for an expense, it is recognized as an asset on the balance sheet. The amount paid is […]

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  • How To Find Stockholders Equity: Step-by-Step Guide

    The items that would be included in this line involve the income or loss involving foreign currency transactions, hedges, and pension liabilities. As these examples suggest, a corporation’s market value may be far greater than its book value. In contrast, a corporation that has recently purchased many assets, but is unable to operate profitably, may […]

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  • Accounting Equation Explained

    Breaking out expenses explicitly allows for clearer tracking of how business costs erode equity. This visibility helps prevent the common issue of assets declining without the owners’ understanding why their “bottom line” is shrinking. Double-entry accounting maintains balance by ensuring every transaction affects at least two accounts. A current asset whose ending balance should report […]

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