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
Category Archives: 1 Basic Accounting
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
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’. Continue reading
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. Continue reading
Inefficiencies in production
Inefficiencies in production are in reality treated differently. There are companies who don’t even know that they’re being inefficient, there are companies who consider inefficiencies as a part of the everyday process and those who treat inefficiencies as something very serious and fight against them. Continue reading
Comparing sales orders against shipments
Why would you monitor your sales? Do know that they indeed happened to put it in short. Sales are not just about making accounting entries, but also ensuring that your customers are getting what they ordered. If you think about it, in a case where the sale hasn’t in fact taken place (that is the customer didn’t get anything) you’re not getting paid either (and you could be asked to pay back any prepayments made for the purchase by the customer if that’s the case). Continue reading