Recognizing purchasing and payables on the statement of cash flows is in fact straightforward. Continue reading
Author Archives: Karl
Government grants for expenses
There are often times when your local government can assign a grant for your company or for your industry for you to apply for the grant etc. The means may vary, however the general approach to recognizing the grant on your financial statements remains the same. Continue reading
Recognizing a payable for a PPE item
How would you recognize a payable for a property, plant and equipment item? You essentially bought from your supplier an item you’ll be using for a longer period to either produce something or generate economic benefits for your business and now you have to recognize the purchase within your accounts. Continue reading
What is ‘payable to a supplier’?
What is ‘payable to a supplier’? First I would like to define the term ‘supplier’. In practice for some reason it creates some confusion and I have seen often enough some people thinking you sell your goods to your supplier. Whilst this may happen, it’s a case your supplier becomes your client at the same time. ‘Supplier’ is someone you buy goods and/or services from; they supply you with goods and/or services you require. For argument purposes, your ‘customer’ is someone who buys goods and/or services from you. So now that’s clear we can move on. Continue reading
Purchasing and payables essential
When it comes to purchasing, it’s something most companies do at least as often (if not more often) than they sell. I would say that accounting entries for recognizing a purchase take place the most in a company’s books. Continue reading
Producing – to get it started in accounting
Production is something many may want to get into, however when it comes to accounting, there are often times things that are overlooked. It’s not just that they are overlooked, but sometimes bluntly ignored. I want to make it clear why it’s important that your properly account for the cost of the items you produce – it directly impacts what you’ll be getting from the sale of the items. How are you about to determine sales prices for your items if you don’t exactly know the cost you must cover? Continue reading
Measuring net realisable value for inventories
As was defined before, the net realisable value is essentially an amount your company expects to realise from the sale of an inventory item in the ordinary course of business. First and foremost it should be noted that any rapid sales or forced sales (i.e. if the goods are seld to meet a warranted liability) are not defined as ‘ordinary course of business’ and prices determined under such conditions are normally not compared against cost of items of inventory. Continue reading