by TheBusinessProfessor | Feb 23, 2025 | Managerial & Financial Accounting & Reporting
What is Accounting Conservatism?Accounting conservatism exhibits the potential worst scenarios in financial statements. This accounting method seeks to answer the volatility by selecting the situation with the most conservative income. Accountants practice this method...
by TheBusinessProfessor | Feb 23, 2025 | Managerial & Financial Accounting & Reporting
What are Accounts Payable?Accounts payable refers to the money owed for a good or service that a company has purchased on credit. It is a liability to the company. It represents a payment obligation and must count against any income. Accounts payable are classified...
by TheBusinessProfessor | Feb 23, 2025 | Managerial & Financial Accounting & Reporting
What are Above-The-Line Costs?Here the line refers to the line that divides gross profit from operating costs. For the companies providing services, this indicates to the line that separates the operating income from other expenses. Above-The-Line is used by the...
by TheBusinessProfessor | Feb 23, 2025 | Managerial & Financial Accounting & Reporting
What is Asset Turnover Ratio? Asset turnover ratio is an efficiency ratio that is used to measure the efficiency of a company in generating revenue through the use of its assets. The Asset Turnover Ratio formula is:Sales / Assets = Number of timesThis ratio is used as...
by TheBusinessProfessor | Feb 23, 2025 | Managerial & Financial Accounting & Reporting
What is the Acid Test?The Acid Test Ratio, also known as the Quick Ratio, is a liquidity ratio that measures whether a firm possesses enough short term assets to cover its current liabilities. It estimates how a firm can efficiently settle its short-term financial...
by TheBusinessProfessor | Feb 23, 2025 | Managerial & Financial Accounting & Reporting
What is Activity-Based Budgeting (ABB)?Activity Based Budgeting, or ABB, is a system used to research, record and then analyze the activities leading to costs in a business. This method works by distributing costs according to the activities the company carries out...
