Before you can set a price for any item you manufacture, you must calculate the per-unit manufacturing cost. This product cost calculation includes elements such as the cost of raw materials, direct labor, and overhead costs. The price you set determines your profit margin. Define Total Manufacturing Cost The accounting and business term, total manufacturing cost, also called cost of goods manufactured, which shows up in …
When a company extends credit to customers, inevitability some portion of those receivables will turn into bad debt. As a result, an entry must be prepared to adjust the balance sheet and income statement. Preparing and posting a bad debt journal entry is typically done during month-end close. What is Bad Debt? Accounts receivable that …
How to Create a Bad Debt Write Off Journal Entry Read More »
When preparing financial statements, a trial balance is used as part of the closing process to develop the balance sheet, income statement and statement of cash flows. After an adjusted trial balance is prepared, a post closing trial balance is used to verify the accuracy of the closing process. This type of trial balance is …
When recording journal entries for cost of goods sold, accountants work in tandem with manufacturing or operations, to ensure they’re booking the correct costs. Support from production personnel is essential to back-up journal entries and remain compliant with U.S. GAAP. These points and those below are part of the inventory cost recordation process. What is …
How to Record a Journal Entry for Cost of Goods Sold Read More »
Depreciation accounting can seem a bit overwhelming, but once you learn a little bit about why depreciation is necessary and how depreciation formulas work, you’ll see it’s fairly straightforward and easy to understand. Of course, there are some intricacies and it can be a bit more complex depending on the type of business you are …
The Ins and Out of Depreciation Accounting & Depreciation Formulas Read More »
