Accounting Tools

MAY 10, 2024

Related Articles Fixed Asset Impairment Accounting Functional Obsolescence Write-Down How to Allocate the Impairment of a Group of Assets If there is an impairment at the level of an asset group , allocate the impairment among the assets in the group on a pro rata basis, based on the carrying amounts of the assets in the group.

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Auditing Accounting Accounting 40

Accounting Tools

JULY 8, 2023

The result is a streamlined system that minimizes the investment in working capital , while also minimizing inventory obsolescence and production scrap. Related Articles Cellular Manufacturing Flexible Factory Focused Factory Under the just-in-time system, inventory levels can be extremely low.

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Accounting Tools

OCTOBER 3, 2023

For example, an entity routinely records provisions for bad debts , sales allowances , and inventory obsolescence. Related Articles Provision for Doubtful Debts Provision for Income Taxes The accounting staff should regularly review the status of all recognized provisions, to see if they should be adjusted.

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Accounting Tools

MAY 6, 2024

This should result in faster inventory turnover , as well as fewer losses due to inventory obsolescence. Related Articles ABC Inventory System ABC Method Inventory Analysis By doing so, the firm can cost-effectively monitor inventory, so that the most active items are managed the most closely.

Customer Service 40

Customer Service Accounting Accounting 40

Accounting Tools

NOVEMBER 2, 2023

Inefficiency/Obsolescence Some equipment will be rendered obsolete by more efficient equipment, which reduces the usability of the original equipment. Related Articles Is Depreciation a Direct Cost or Indirect Cost? The pace of depletion may change if a company subsequently alters its estimate of reserves remaining.

Auditing 75

Auditing Accounting Accounting 75

Accounting Tools

AUGUST 8, 2023

Nonmonetary items tend to be convertible into varying amounts of money, based on changes in supply and demand and the presence of obsolescence. Related Articles Monetary Asset Monetary Liability Monetary Value

Deposits 40

Deposits Accounts Payable Accounts Payable Accounts Receivable 40

Accounting Tools

SEPTEMBER 2, 2023

The reliability principle is particularly difficult to meet when you are recording a reserve , such as an inventory obsolescence reserve , a sales returns reserve , or an allowance for doubtful accounts , since these reserves are essentially opinion-based.

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Accounting Tools

NOVEMBER 5, 2023

Related Articles Materials Price Variance This situation usually applies only when the cost of marketing materials is quite high. Terms Similar to Material Quantity Variance The material quantity variance is also known as the material usage variance and the material yield variance.

Cost Accounting 75

Cost Accounting Accounting Accounting 75

Accounting Tools

MAY 21, 2023

Examples of Accounting Adjustments Examples of accounting adjustments are as follows: Altering the amount in a reserve account, such as the allowance for doubtful account s or the inventory obsolescence reserve. Recognizing revenue that has not yet been billed. Recognizing expenses for supplier invoices that have not yet been received.

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Accruals Accounting Accounting Billing 75

Accounting Tools

OCTOBER 6, 2023

Shelf Life A company may want to minimize its finished goods inventory if the inventory has a short shelf life, and so is at risk of spoilage or obsolescence. Related Articles Finished Goods Inventory Thus, retailers have merchandise in stock, rather than finished goods.

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Accounting Tools

SEPTEMBER 28, 2023

Accounting estimates that are commonly changed include reserves for uncollectible receivables , warranty obligations, and inventory obsolescence. Related Articles Accounting Convention Accounting Methods Objectives of Financial Reporting Accounting estimates may occur as frequently as every reporting period.

Financial Statements 40

Financial Statements Accounting Accounting Accruals 40

Accounting Tools

AUGUST 23, 2023

Investigate the potential obsolescence of fixed assets. Supervises None Related Articles How to Become an Accountant The Difference Between Public and Private Accounting The Different Types of Accountants Types of Accounting Functions Review and update the detailed schedule of fixed assets and accumulated depreciation.

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General Ledger Accounting Accounting Reconciling 40

Accounting Tools

AUGUST 3, 2023

Thus, the intent of pro forma earnings reporting is to reveal an entity's "normalized" earnings, which typically do not include such items as charges for layoffs, inventory obsolescence , or asset impairments. Related Articles Pro Forma Financial Statements

Financial Statements 40

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Accounting Tools

AUGUST 23, 2023

However, the downside of this approach is that the company's inventory holding costs will be extremely high, and will be accompanied by an increased risk of inventory obsolescence (since some items will never be sold). Related Articles How to Reduce Inventory Inventory Risk Pooling

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Accounting Tools

JULY 14, 2023

Understanding Net Realizable Value There is an ongoing need to examine the value of inventory to see if its recorded cost should be reduced, due to the negative impacts of such factors as damage, spoilage , obsolescence , and reduced demand from customers.

Accounts Receivable 75

Accounts Receivable Accounts Receivable Account Receivables Financial Statements 75

Accounting Tools

JUNE 18, 2023

This approach charges the cost of obsolescence to expense in small increments over a long period of time, rather than in large amounts only when obsolete inventory is discovered. Instead, the entries are usually one-time events.

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Accounts Payable Accounts Payable Accounts Receivable Accounts Receivable 40

Accounting Tools

SEPTEMBER 9, 2023

Actions taken to reduce the underlying causes of obsolescence , such as buying in smaller quantities, switching to a production system that is based on customer orders, better management of engineering change orders , and so forth.

Accounting 40

Accounting Accounting 40

Accounting Tools

JULY 8, 2023

If it instead purchases in small quantities, the company will likely pay a higher price per unit and incur an unfavorable spending variance, but will also have a smaller investment in inventory and a lower risk of inventory obsolescence. Terms Similar to Spending Variance A spending variance may also be known as a rate variance.

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Accounting Tools

SEPTEMBER 22, 2023

The impairment could be triggered by such issues as asset damage, obsolescence , or legal restrictions on asset use. Related Articles Goodwill Impairment Testing How Frequently to Test for Goodwill Impairment The Other-than-Temporary Impairment Concept

General Ledger 40

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Accounting Tools

JULY 21, 2023

Related Articles Functional Obsolescence Impairment of Long-Lived Assets Write Down However, the impairment loss cannot reduce the carrying amount of an asset below its fair value. Under no circumstances is it allowable to reverse an impairment loss under GAAP.

Accounting 40

Accounting Accounting Auditing 40

Accounting Tools

SEPTEMBER 6, 2023

The FIFO flow concept is a logical one for a business to follow, since selling off the oldest goods first reduces the risk of inventory obsolescence. Related Articles FIFO vs. LIFO Accounting Periodic FIFO Perpetual FIFO The use of LIFO is banned under IFRS.

Financial Reporting 40

Financial Reporting Auditing Accounting Accounting 40

oAppsNet

MARCH 12, 2024

In this article, we’ll unfold the compelling reasons for organizations to go paperless, examining the transformative benefits, key considerations, and best practices for successful implementation.

Data Entry 52

Data Entry Record Keeping Auditing Customer Service 52

Accounting Tools

DECEMBER 14, 2023

Management needs to maintain enough stock on hand to fulfill customer orders within a reasonable period of time, but not so much stock that there is a risk of product obsolescence, or of maintaining too large an investment in working capital. Others try the reverse approach, where they charge much lower prices, but maintain no stock at all.

Financial Statements 40

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Counto

FEBRUARY 22, 2024

It reflects the decrease in value of assets due to wear and tear, obsolescence, or usage. It provides a more accurate representation of your business’s financial performance over time. Depreciation: The systematic allocation of the cost of tangible assets over their useful life.

Accounting 52

Accounting Accounting Accruals Accounting Software 52

Accounting Tools

OCTOBER 11, 2023

Yet another advantage is that the cost analysis might uncover unusually large amounts of inventory obsolescence or scrap write-offs. Related Articles Accounting for Manufacturing Businesses Indirect Manufacturing Costs Manufacturing Cost Accounting Manufacturing Overhead Manufacturing Support Costs

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Accounting Tools

JUNE 8, 2023

Assumes Inclusion of Inventory Losses The calculation assumes that the long-term rate of losses due to theft, obsolescence, and other causes is included in the historical gross profit percentage. A well-run cycle counting program is a superior method for routinely keeping inventory record accuracy at a high level.

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Accounting Tools

SEPTEMBER 22, 2023

Fifth, better control over inventory tends to result in less product obsolescence, resulting in reduced inventory write-offs. Related Articles Supply Chain Finance Fourth, the higher level of data integration up and down the supply chain gives a business better insights into looming problems, so that it can develop workarounds sooner.

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Tax Computation Invoicing 40

Accounting Tools

AUGUST 6, 2023

It is also likely that there will be inventory obsolescence costs associated with goods that can no longer be sold, as well as damage to inventory items while they are held in storage. Buying in smaller quantities may not actually be more expensive, since it reduces inventory carrying costs , as well as inventory obsolescence costs.

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Purchase Order Budgeting Collections Accounting 40

Future Firm

MARCH 14, 2023

If you’re curious how much your firm is worth and how to increase your firm’s valuation, you’ll want to read this article on how to value a CPA firm. Hopefully, the article above provides some guidance on the factors that sellers are taking into account when it comes to valuing your firm. Let’s go!

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Accounting Tools

MARCH 5, 2024

Inventory Obsolescence If a company manufactures goods that are only relevant in the marketplace for a short period of time (such as consumer electronics), it will need to maintain tight control over the amount of inventory kept on hand.

Customer Service 40

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Accounting Tools

JUNE 19, 2023

Inventory Obsolescence In industries where product life spans are short, be sure to examine the inventory for obsolete items, and estimate the price at which they could be disposed of. Related Articles Acquisition Integration Acquisition Purchase Agreement Acquisition Term Sheet Tender Offer The Acquisition Process The Closing Memorandum

Financial Statements 73

Financial Statements Auditing Tax Accounts Payable 73

Accounting Tools

JUNE 12, 2023

The accrual basis requires the use of allowances for sales returns , bad debts , and inventory obsolescence , which are in advance of such items actually occurring. Accrual basis is a method of recording accounting transactions for revenue when earned and expenses when incurred.

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Accruals Financial Statements Bookkeeping Invoicing 40

Accounting Tools

AUGUST 24, 2023

Demand levels could change, depending upon technological obsolescence or other factors. Related Articles Contra Revenue How to Account for a Sales Discount Types of Discounts It may not be possible to derive a reasonable estimate of what future product returns may be under the following circumstances: Changes in demand.

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Auditing Accounting Accounting 40

Accounting Tools

JUNE 10, 2023

In addition, the buyer takes on the risk of product damage and obsolescence, since the excess quantity may be stored in its warehouse for an extended period of time. Related Articles Blanket Purchase Order Spend Management Example of a Quantity Discount A seller offers a 10% discount if customers buy at least 100 purple widgets.

Purchase Order 40

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Accounting Tools

AUGUST 5, 2023

Conversely, a small consumer electronics firm that experiences rapid product obsolescence probably cannot afford to maintain even a modest debt-equity ratio, since its cash flows are so variable. Related Articles Asset to Equity Ratio Capital Adequacy Ratio Capital Employed Degree of Total Leverage Gearing Ratio

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