Definitions

Sale Vs. Sell: What’s The Difference?

When it comes to the using the words “sale” and “sell,” its common for many people swap the two, and use them as if they have the same meaning. While similar, the truth is that these two words have quite different meanings. A sale is a great opportunity to get a good deal on something […]

What is Double Taxation?

Double Taxation Definition Double taxation is a term that refers to when a company’s income is taxed and then the distributions or dividends that are paid to shareholders are also taxed. The C-corporation is the only business structure that undergoes double taxation. Since a C-corporation is an entity established separately from its owners and its

Understanding FIFO Cost Flow Assumptions

In order to properly report their total cost of goods sold (cogs) on their financial statements and income taxes, companies must resort to one of the three calculations known as the company’s inventory valuation methods set in place by GAAP. These include the so-called FIFO, LIFO, and the weighted average inventory cost flow assumptions (IFRS)which

What does EBIT Mean & How does it Work?

EBIT Definition EBIT (an acronym and also known as Operating Profit), is short for Earnings Before Interest and Taxes, measures the metrics of earnings for a business over a specific period of time, but excludes interest and income tax expenses. Interest and taxes are not included in this calculation because interest and taxes are not expenses that are a result of operations. EBIT is the difference between

What is Owner’s Equity and How is it Calculated? | Definition | Formula | Examples

Looking for information about what owner’s equity is, how to calculate it and why it’s important to a business? We have an explanation for all of the components here! Owner’s Equity Defined The definition of owner’s equity is the residual equity that remains after deducting liabilities from the assets of a business. Owner’s equity represents