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What is

Are Supplies a Current Asset? (+ Journal Entries)

Generally, supplies are classified as current assets on the balance sheet until their use is recorded as an expense.

By June 5, 2024 | Accounting, What is

Supplies on hand are classified as current assets on the balance sheet because they are expected to be used up or converted into cash within one operating cycle or one year, whichever is longer. Since supplies are consumed in day-to-day business operations, supplies on hand are considered current assets. These can range from office supplies in…

Accounts Payable Workflow: 3 Easy Steps for Small Businesses

The accounts payable workflow is the process of entering, reviewing, approving, and processing vendor invoices for payment.

By June 5, 2024 | Accounting, What is

The A/P workflow starts immediately after goods have been received. The A/P clerk will first gather all the necessary documents and enter them into the accounting system. They will then review the documents to ensure the accuracy and correctness of the information. After review and approval, they will prepare the payment request and forward it…

4-4-5 Calendar: Free 2024-2026 Download & How to Use

Using 4-4-5 calendars helps you better understand business performance and set goals by making accurate comparisons of sales figures and other data across years.

By June 5, 2024 | Retail, What is

The 4-4-5 calendar is a special retail calendar that divides the year into four quarters of 13 weeks (two four-week months followed by one five-week month) for the sake of consistency and comparison. Download our free 4-4-5 calendar for 2024 to 2026 above and read on to learn more about how to use it and…

The 5 C’s of Credit: A Beginner’s Guide

The 5 C’s of credit analysis are character, capacity, capital, conditions, and collateral.

By June 5, 2024 | Financing, What is

The 5 C’s are used by lenders to evaluate potential risk when determining a borrower’s creditworthiness and ability to repay a loan. Each lender has their methods of valuing each category and uses their judgment during the approval process before extending financing. The 5 C’s of credit are as follows: Character: This demonstrates your reliability…

What Is Predatory Pricing? Effects & Legalities

By June 5, 2024 | Ecommerce, Retail, What is

In this article, we’ll define predatory pricing and take a closer look at how it works, its short- and long-term effects, and real-world examples. How Does Predatory Pricing Work? Predatory pricing is a strategy that unethical businesses adopt for customers to flock toward their goods or services and away from competitors—often those with smaller financial…

What Is Revenue Recognition? 5-step Model & Best Practices

Revenue recognition is the five-step process that businesses must follow to recognize revenue properly. It starts with identifying contracts with customers and ends with revenue recognition.

By June 4, 2024 | Accounting, What is

Knowing what revenue recognition is and its importance in financial reporting helps businesses make informed decisions and have a clear picture of business performance and financial health. To help you recognize revenue properly, we’ll borrow the five-step model from ASC 606, which determines the GAAP for revenue recognition. Even if your business isn’t required to comply…

What Is a Periodic Inventory System & When Is It Used? (+ Example)

A periodic inventory system is a method of valuing inventory in which inventory is counted at predetermined intervals.

By June 4, 2024 | Accounting, What is

With a periodic inventory system, the determination of inventory levels and calculation of the cost of goods sold (COGS) for a business takes place at regular intervals, as opposed to being a continuous process. A periodic inventory system relies on physical counts of inventory, which are carried out periodically (e.g., monthly, quarterly, or annually), instead…

What is Property, Plant, and Equipment (PP&E) in Accounting?

By May 30, 2024 | Accounting, What is

Property, plant, and equipment (PP&E) refers to a company’s long-term tangible assets that are used in its operations to generate income. These assets are expected to last for more than one accounting period, typically for a year or more, and are essential for the business to function. Understanding a company’s investment in PP&E can be…