What are Asset management Ratios? Asset management ratios are a group of metrics that show how a company manages its assets in generating revenues. They’re used to analyze how efficiently and effectively a company is using its resources by comparing the total assets with the total sales. These ratios can be used in the context …
What are Prepaid Expenses? Prepaid expenses are costs that have been paid in full for goods or services that will be used over a period of time. This kind of expense is usually intangible, such as an insurance premium, or can be tangible, such as prepaid rent. Prepaid expenses are recorded when the goods and …
Conversion cost also known as cost per conversion for a certain marketing channel is an important indicator of how well a company is performing on various marketing channels. The Cost per Conversion metric can help show the ROI for an online marketing campaign, where the goal is to convert visitors into paying customers. Conversion costs …
What is a Write Off Account Receivable? A write-off is an expense item that has been expensed, as opposed to a normal expense which has not been incurred. A write-off arises due to the enterprise or its owner expensing a financial loss or expenditure for their business. The writing off of an expense is viewed …
What is Market Cannibalization? Cannibalization is when a firm whose product lacks an established market occupies a share of the market by undercutting its competitors. Market cannibalization has driven many firms to turn to mergers and acquisitions in order to survive. The concept of cannibalization is important to every fund accounting student because it familiarizes …
What are Net Operating Assets? Net operating assets (NOA) is a measurement of the net worth of a company. It’s the value of the company’s assets minus liabilities, including stockholders’ equity and debt. In other words, net operating assets measure what’s left over after subtracting all debts and obligations from all that remains. The general …
What are substantive procedures in auditing? Substantive audit procedures are critical in determining the level of risk and control weaknesses in an entity. A substantive audit procedures refers to audit procedures that are performed to provide a reasonable basis for evaluating whether there is a reasonable possibility that material misstatements exist due to fraud or …
A predetermined overhead rate is a cost of doing business that includes costs of the fixed assets, such as property or buildings, used in manufacturing. At the beginning of the accounting period, a predetermined overhead rate is determined by dividing the predicted manufacturing overhead by the anticipated activity base. The predetermined overhead rate plays an …
What is Fund Accounting? Fund accounting refers to a system of record keeping mainly used by non-governmental organizations for purposes of accountability. Every business takes the aspect of profits seriously and thus the need for accounting; but the focus of nonprofits is on how well the available funds were used. Even though nonprofits also keep …
Ethics in accounting is the practice of following a laid down set of rules and regulations during the financial accounting process. It is important that all individuals that handle transactions of any nature uphold a high degree of credibility and honesty. Without accounting ethics, misuse of financial information becomes the order of the day and …
