Recent Articles

Profit & Loss

A form of a financial statement otherwise known as the income statement, statement of financial position, or revenues in excess of expenses.

Leverage in Business

07/08/2015

In the simple lever and fulcrum machine the force is magnified onto a load.  The machine creates a mechanical advantage, a form of force amplification.  In business the principle is exactly the same.  Except here we are not moving a physical [...]

Accounting

07/21/2014

Accounting refers to the business function of recording economic activity.  Accounting includes the processing of information and a reporting role.   The accounting term encompasses a broad range of functions for every business.  It starts out [...]

Chart of Accounts – Layout

11/27/2013

The goal of accounting is to record the economic activity of the business.  This is achieved by entering each economic transaction into a set of books.  The books are formatted to reflect the balance sheet and income statement items.  The chart [...]

How is Cost of Goods Sold in Retail Determined?

02/16/2013

Each industry is different in determining costs of goods sold or cost of services rendered.  Retail uses two distinct methods to calculate costs of goods sold.  The first is called ‘Specific Identification’ whereby each item sold is [...]

What is Amortization?

01/15/2013

There are three methods of expensing an asset to the income statement.  The most common method is depreciation for fixed assets.  Mining, oil, and natural resource operations use depletion (amount removed versus the estimated volume on hand).  [...]

Accounting Principles

11/26/2012

Simply stated, accounting is the measurement of economic activity.  Its primary principle is to report information to the user so that (s)he can make informed decisions.  The primary reporting format is in the form of dollars.  There are two [...]