Wikiaccounting

Financial Self-Sufficiency (Definition, Formula, Example and How to Calculate?)

Definition: Financial Self-Sufficiency is a ratio that is used in order to evaluate if the company is able to generate enough revenue to cover its costs while ensuring that the equity value is sustained, after incorporating inflation, and another cost of capital. This particular ratio is considered to be a very useful metric in terms […]

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Full Goodwill Method vs Partial Goodwill Method – What is the Difference?

Financial Accounting

What is a Full Goodwill Method? Under the full goodwill method, the goodwill that arises in the business combination is mainly calculated as the existing difference between the purchase consideration that is paid by the parent company (the one that is acquiring the other company), and the existing fair value of the non-controlling interest, as

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Capitalized Cash Flow Method

Statement of Cash Flows

Definition: Company valuation tends to be one of the most important calculations for any company, simply because of the reason that it defines how much they are worth in the market. It tends to be a highly important metric for investors, and other various stakeholders, because they are able to get an idea if their

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Permanent Current Assets – Definition, Example and How Is It Different from Temporary Current Assets

Current Assets

Definition: Permanent Current Assets can be described as assets that are supposed to be maintained by the business over the course of time in order to ensure that the company is able to run its operations. These assets are considered to be current assets that tend to stay persistent on the balance sheet of the

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What is Controllable Variance? Definition, Formula, Example

Variance Formula

Definition: During the course of the business, variance can broadly be categorized into two categories: volume variance or rate variance. As far as volume variance is concerned, it can be seen that the variance occurs because of the change in sales volume or the differing usage rates of different goods and services. On the other

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Delivery Cycle Time: Definition, Formula, and How to Calculate It?

Financial Ratios

Definition Delivery Cycle time is considered to be a highly important metric when it comes to internal business performance. It is described as the amount of time from when the order is received to when the order is finally shipped. This tends to be an important factor for businesses, as well as the customers, because

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What are Services Rendered? (Definition, Explanation, and Example)

Account Payable

Definition: Service rendered can be explained as a finishing off of service agreement that is furthered to the client as an indicator that the work has been completed so that payment can be generated accordingly from the service receiver to the provider. Service rendered, by definition, means that the agreed-upon service has been completed so

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Purchase Discount Journal Entry: (Example and How To Record)

Account Payable

What is a Purchase Discount? Purchase Discount refers to the discount that the buyer avails of the goods to settle a particular debt earlier than the actual settlement date. During the normal course of the business, it is highly likely that businesses might procure certain goods or services on credit. However, regardless of the agreed-upon

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What is a prepayment? (Definition, Explanation, Journal Entry, and Example)

Current Assets

Definition Prepayment is an accounting term referred to the types of expenses not incurred yet but for which payment is made in advance. As the economic benefits from such resources are not taken yet this is why it is classified as an asset rather than an expense and shown on the face of the balance

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Accrued Expense Journal Entry – Example, Definition, Recording, and Explained

General Journal

Introduction The term “accrued” means “accumulate” or “increase”. As such accrued liabilities mean that the unpaid bills issued to the company are increasing. When the expenses are made by customers, they don’t make cash payments every time. Despite payments being not made, the company records such expenses as accrued expenses in their books of accounts.

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