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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.  (more…)

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 […]

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 […]

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 […]

Defining net realisable value

How would you define net realisable value (or NRV) for inventory items? International Accounting Standards define net realisable value as ‘the net amount that an entity expects to realise from the sale of inventory in the ordinary course of business’.  (more…)

Monthly salary

A most regular type of salary being paid to employees is a monthly salary. Such interval, a month, is most commonly used, however there are countries where it’s expected that the salary for work done is paid each week. I would suggest you consult your local legislation and what’s customary in your country.   (more…)