What is Cash Flow from Investing Activities? Cash Flow from Investing Activities is the section of a company’s cash flow statement that displays how much money has been used in (or generated from) making investments during a specific time period. Investing activities include purchases of long-term assets (such as property, plant, and equipment), acquisitions of…
What are Financial Assets? Financial assets refer to assets that arise from contractual agreements on future cash flows or from owning equity instruments of another entity. Financial instruments refer to a contract that generates a financial asset to one of the parties involved, and an equity instrument or financial liability to the other entity. A…
What are Subsequent Events? Subsequent events are events that occur after a company’s year-end period but before the release of the financial statements. In other words, subsequent events are events that happen between the cut-off date and the date in which the company issues its financial statements. Depending on the situation, subsequent events may require disclosure…
What is Google Sheets? Google Sheets is a free, web-based spreadsheet application that is provided by Google within the Google Drive service. The application is also available as a desktop application on ChromeOS, and as a mobile app on Android, Windows, iOS, and BlackBerry. The Google Drive service also hosts other Google products such as…
What is Revenue Recognition? Revenue recognition is an accounting principle that outlines the specific conditions under which revenue is recognized. In theory, there is a wide range of potential points at which revenue can be recognized. The follwong guide addresses recognition principles for both IFRS and U.S. GAAP. Conditions for Revenue Recognition According to the…
What is Customer Profitability Analysis? Customer Profitability Analysis is a tool from managerial accounting that shifts the focus from product line profitability to individual customer profitability. Activity Based Costing looks at the various cost drivers to accurately isolate costs and determine a product’s profitability. In contrast, Customer Profitability Analysis is a method of looking at…
What are Inventoriable Costs? Inventoriable costs, also known as product costs, refer to the direct costs associated with the manufacturing of products and in getting them ready for sale. Often, inventoriable costs include direct labor, direct materials, factory overhead, and freight-in. Once a product is sold to a customer or disposed of in another way,…
What is Accounting Rate of Return? Accounting Rate of Return is the average net income an asset is expected to generate divided by its average capital cost, expressed as an annual percentage. It is a formula used to make capital budgeting decisions. The accounting rate of return is used in situations where companies are deciding…
What is Progressive Tax? A progressive tax is a tax system that increases rates as the taxable income goes up. It is usually segmented into tax brackets that progress to successively higher rates. For example, a progressive tax rate may move from 0% to 45%, from the lowest and highest brackets, as the taxable amount…
