Accounting

A:

An invoice is a document sent by a business to a client denoting an obligation to pay for goods or services. One primary purpose is to communicate the requirement to pay for the goods. The other is to document the transaction as an accounts receivable in its accounting system until the bill is paid.

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  • What is the difference between capital and revenue expenditure?

    Q: What is the difference between capital and revenue expenditure?

    A: A capital expenditure includes all costs incurred on the acquisition of a fixed asset along with subsequent expenditures that increase the asset's earning capacity, while revenue expenditure only includes costs that are aimed at maintaining fixed assets and not enhancing earning capacity. The distinction between capital expenditure and revenue expenditure is important because only capital expenditures are included in the cost of a fixed asset.
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  • How do you define accounting ethics?

    Q: How do you define accounting ethics?

    A: Accounting ethics refers to the standards of right and wrong conduct that apply to the accounting profession. Various accounting organizations maintain professional codes of conduct to assist accountants with upholding ethical behavior.
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  • How do you write a monthly report?

    Q: How do you write a monthly report?

    A: Monthly reports are used by project managers and program directors to inform supervisors of the progress of projects. The reports are based on one calendar month and are usually turned in within a week after the month ends. A report typically consists of one or two pages of easily digestible information.
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  • What is the abbreviation of the word "accounting?"

    Q: What is the abbreviation of the word "accounting?"

    A: According to Purdue University, the abbreviation for the word "accounting" is "ACCT." Sometimes all capital letters are used, but punctuation is always included. The accounting field uses several abbreviations for terms common to the profession.
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  • What are net fixed assets on a balance sheet?

    Q: What are net fixed assets on a balance sheet?

    A: According to Ohio State University, net fixed assets on a balance sheet are the book value of a company's long-term assets, such as property, vehicles or equipment. The net fixed asset value is calculated by taking the gross asset value, or purchase price, and subtracting the accumulated depreciation of value.
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  • What is a sales analysis report?

    Q: What is a sales analysis report?

    A: According to the Houston Chronicle, a sales analysis report is a report that shows the trends that occur in a company's sales volume over time. It shows whether or not a company's sales are increasing or decreasing.
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  • What is the difference between accounting and bookkeeping?

    Q: What is the difference between accounting and bookkeeping?

    A: Bookkeeping involves recording basic accounting transactions such as recording invoices from suppliers, paying suppliers, processing payroll and recording cash received from customers. Bookkeeping is a subset of accounting. Accounting is usually more involved and includes activities such as creating financial statements, creating budgets and compiling tax returns.
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  • What is the full disclosure principle in accounting?

    Q: What is the full disclosure principle in accounting?

    A: The full disclosure principle states that financial records should include all of the information necessary for readers to understand those records. This is a largely subjective principle, but full disclosure doesn't mean that records should include irrelevant information.
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  • What is an imprest account?

    Q: What is an imprest account?

    A: An imprest account is one that holds a fixed amount of money and is replenished after a certain period of time. A good example of an imprest account is a petty cash system that may be replenished on a daily, weekly or monthly basis.
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  • What are some advantages and disadvantages of trade credit?

    Q: What are some advantages and disadvantages of trade credit?

    A: The greatest advantages of trade credit to businesses include the availability of zero percent financing and potential discounts on needed goods, while the biggest disadvantage is the risk of late payment fees. Trade credit is an arrangement between a supplier and a business to receive goods or services while delaying cash payment until a later date.
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  • What is the main objective for any business?

    Q: What is the main objective for any business?

    A: Under traditional business theory, the main objective of any business is to make a profit for its owners. Only those business activities that result in the highest profit margin meet this basic objective.
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  • What is the definition of "revenue allocation"?

    Q: What is the definition of "revenue allocation"?

    A: Revenue allocation is the distribution or division of total income, or revenue, in a business, corporate or government structure. It involves a complex process that entails how and where to allocate revenues in order to ensure the viability of departments and maintain the operating structure of the organization.
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  • What are examples of liquid assets?

    Q: What are examples of liquid assets?

    A: Some examples of liquid assets include cash held in a safe deposit box, checking accounts, saving accounts, money market accounts, U.S. Treasury bills and some types of retirement accounts. An asset is liquid if you can quickly turn it into spendable cash without a significant penalty or loss in the underlying value.
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  • What is the difference between operating and capital budget?

    Q: What is the difference between operating and capital budget?

    A: Operating budgets pay for day-to-day expenses, while capital budgets pay for major capital, or investment, spending, writes Kevin Johnston in an article in the Houston Chronicle's Small Business section. Understanding the differences between these budgets is critical to effectively managing business finances.
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  • What is a capital contribution in accounting?

    Q: What is a capital contribution in accounting?

    A: About.com explains that a capital contribution in accounting is a segment of a company's recorded equity. The amount may be contributed using cash, equipment or other fixed assets. A common way for an owner to contribute capital to a company is to buy stocks.
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  • How is direct labor cost calculated?

    Q: How is direct labor cost calculated?

    A: The simplest method for calculating direct labor cost is represented by multiplying the total hours worked times the wage rate for the period of time in question. The equation looks like this: direct labor cost equals total labor hours times labor rate.
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  • What is a goods received note?

    Q: What is a goods received note?

    A: A goods received note is a receipt given to the supplier to confirm delivery or acceptance of goods by the customer. After the supplier receives this note, a payment invoice is sent to the customer.
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  • What is a 13-month salary?

    Q: What is a 13-month salary?

    A: A 13-month salary refers to a payment made to employees above their normal salary, usually equivalent to a month's salary. This type of payment is made as mandated by local law or as part of an employment contract.
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  • What is the prime cost formula?

    Q: What is the prime cost formula?

    A: The formula for prime cost is the sum of the direct cost of materials, the direct cost of labor and the direct cost of expenses, according to BusinessDictionary.com. The prime cost is the cost of a particular product that the manufacturer incurs apart from any business overhead expenses.
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  • What is the meaning of gross pay?

    Q: What is the meaning of gross pay?

    A: An employee’s gross pay is the money earned from working before taxes and other deductions. An employee’s gross pay includes the money they earn from commissions, overtime and tips.
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  • Why is accounting called the language of business?

    Q: Why is accounting called the language of business?

    A: Accounting is the language of business because it helps people, both internal and external, to understand what is happening inside of s business. Just as language is universal to people, so is accounting in business. Regardless of where in the world a business is located, financial information is interpreted in the same way.
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