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…
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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…
What Is the Home Office Tax Deduction?
The home office deduction allows you to write off some of your home costs when you do your taxes. Deductible expenses include the business portion of real estate taxes, mortgage interest, rent, casualty losses, utilities, insurance, depreciation, maintenance, and repairs. To figure out your home office deduction, you can use either the simplified or regular…
Revenue vs Profit: Differences & When To Use Each
Revenue and profit are items in the income statement that are measures of return. Revenue is the gross amount of earnings from the sale of products and services, whereas profit is the net amount or what’s left after deducting expenses and other charges. Terms You Should Remember Gross or total revenues: This is the total…
Service Level Agreements: Definition, Levels & Importance to VoIP
A service level agreement (SLA) is a formal contract between a service provider and the customer outlining performance expectations, quality metrics, and consequences for violations. It is widely used in IT-related areas like the internet, business cloud communications, and managed services. Service level agreements manage customer expectations and define specific remedies if the provider fails…