The accounts payable (A/P) turnover ratio is a liquidity measure that shows how fast a business pays its suppliers during a specific period. The A/P Turnover formula is: Accounts Payable Turnover Ratio Calculator Understanding the Accounts Payable Turnover Ratio The A/P turnover ratio is one of the financial ratios used in financial ratio analysis. Here…
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What Is Stripe? Guide for Small Businesses
Stripe is a developer-centric payment processor that allows merchants to receive payments via debit or credit cards, mobile wallets, ACH, and buy now, pay later services. It offers everything from payment buttons and hosted checkout pages to ecommerce store integrations. Stripe is well known for its open-source solutions and powerful API documentation. Stripe also provides…
What Is the Average Cost Method? How To Calculate & Example
The average cost method computes inventory cost based on total cost of purchases divided by the number of goods purchased. Since AVCO uses an average cost of goods in inventory, rather than tracking individual units, it’s simpler to use than first-in, first-out (FIFO) or last-in, first-out (LIFO). The main highlight of the average cost method…
The Accounting Equation: What It Is & The Effects of Common Transactions
The accounting equation is the fundamental formula in accounting—it shows that assets are equal to liabilities plus owner’s equity. It’s the reason why modern-day accounting uses double-entry bookkeeping as transactions usually affect both sides of the equation. The accounting equation is an accounting fundamental that bookkeepers need to master to be proficient. We express the…
Is Business Loan Interest Tax Deductible? Limitations
You can claim a deduction on your tax return for the business loan interest you paid during the year. Qualifying business loans include term loans, lines of credit, and even credit cards. However, you can only claim a deduction if your loan was for a business purpose, like purchasing assets or paying expenses. If you’re…
Top 12 Rental Property Tax Deductions & Benefits
The IRS allows rental property tax deductions for any ordinary and necessary expense of maintaining and renting out your property. Investors and real estate professionals can save a significant amount of money on their taxes by taking advantage of tax deductions for things like depreciation, interest, insurance, and repairs. While real estate investors usually cannot…
VoIP Speed Test: Free Network Quality Tool
A voice-over-internet-protocol (VoIP) service enables users to make and receive calls on the internet, but the quality relies on a stable connection. Performing a VoIP speed test determines if your existing internet connection is compatible with a VoIP service. It provides extensive data about your internet bandwidth based on upload and download speed, ping, and…
What Is the Specific Identification Method for Inventory?
The specific identification inventory method tracks the costs of individual items of inventory until they are sold to customers. The cost of goods sold (COGS) and cost of ending inventory are determined by the actual cost assigned to each physical unit of inventory. This guide discusses how the specific identification inventory method works, who it’s…