Definition: Fraud is the intentional activity to gain personal benefit directly or indirectly illegally, against organization or entity policy. It is ultimately different from error and corruption. An elementary example of fraud is that the accounting staff pay salary to fake employee’s account that creates by himself is also called fraud. In such a case, accounting …
What is Fraud? Definition, Types, Reasons, and Managing Read More »
The Concept of Transfer Pricing: Transfer pricing (TP) is the price of goods or services sold or bought between divisions in the same group or entity. For the divisions that operate in the same jurisdiction, transfer pricing is set for performance management and motivation of division from the group or entity level. Sometimes it is set …
Ultimate Guide of Transfer Pricing: Concepts, Purpose, and Types. Read More »
A current asset ratio or a current ratio measures a company’s liquidity. It reveals the ability of a business to manage its current liabilities through highly liquid assets. Creditors and analysts can use this metric to assess short-term solvency. However, critics argue that it overstates a business’s short-term risks by excluding some critical components of …
What is the Cash Ratio? (Definition: Using, Formula, Example, and Explanation) Read More »
Definition: Accounts Receivable Turnover is one of the most used efficiency ratios and activities ratios. This ratio is used to measure how efficiently the company’s assets and resources are managed and used. For example, how well the company turns its accounts receivable into cash? This ratio answers this question in time (like 15 times or …
Accounts Receivable Turnover: Formula, Definition, Using, Example, Explanation Read More »
Definition: Fixed Assets Turnover is one of the efficiency ratios used to measure how efficiently of entity’s fixed assets are being used to generate sales. Like its formula, the main idea of Fixed Assets Turnover is to assess the number of a dollar that fixed assets contribute to generating sales and revenues. This ratio is usually …
Fixed Assets Turnover Ratio: Definition, Using, Formula and Example Read More »
Definition: Return on investment is one of the profitability ratios used to measure the percentage of investing profits over the invested fund. Return on investment is popularly used for assessing the performance of investment centers, profit centers, investment projects, and companies. The main principle of return on investment is how much profit that investments project …
Return on Investment (ROI): Definition, Usage, Formula, and Example Read More »
What is Return on Assets? Return on Assets is one of the efficiency ratios used to measure and assess how efficiently the company’s assets are being used. The main indicators to measure the efficiency of assets in this ratio are Net Income and Total Assets. Return on assets is calculated by using net income over …
Return On Assets Analysis: Interpret, Definition, Using, and more Read More »
History of Just In Time (JIT): Just In Time, called TOYOTA Manufacturing Production System, is part of the Lean Manufacturing Production System. There is a long story before becoming the Just-In-Time that we know today. Eli Whitney first initiated the Just In Time concept in 1799, who had a large contract with the U.S. Army at …
Just-In-Time: History, Objective, Productions, and Purchasing Read More »
Budgeting is the tool that most business entities use to link the current performance of that business entity to their strategic objective. The entity breaks its long-term goal, like in ten years or is the market leader, into a short-term objective, called a budget. What is Budgeting in Accounting? In accounting, budgeting refers to planning …
Once you perform the Due Diligence Services for your potential customers, you need to get a better and deep understanding of your customers. The predetermine checklists are one of the most methods that most professional accountants who perform Financial Due Diligence typically have. Here are the ten checklists that will help you to gather enough …
10 Checklists of Preliminary Information for the Due Diligence Read More »
