Author: ann

Intangible Assets

While intangible assets do not have a physical presence, they add value to your business. Intangible assets are long-term assets, meaning you will use them at your company for more than one year. Examples of intangible assets include goodwill, brand recognition, copyrights, patents, trademarks, trade names, and customer lists. Companies account for intangible assets much
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What Is Included in Direct Labor for GAAP?

Indirect costs do not vary substantially within certain production volumes or other indicators of activity, and so they may sometimes be considered to be fixed costs. Direct labor includes the hourly wages paid to a production or service employee, and payroll taxes and expenses for which you are responsible. This includes Social Security, unemployment tax,
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Direct Cost

While managing indirect costs is challenging, it is essential to expense control. Indirect costs are expenses a company may incur that are not associated with a specific product or project within a company. For example, with Ford, the direct costs associated with each vehicle include tires and steel. However, the electricity used to power the
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Projecting Income Statement Line Items

Differences between taxable income and the pre-tax income or profit number reported for financial statements are either temporary or permanent in nature. Permanent differences result when deductibility rules differ in perpetuity between accounting and tax law. Temporary differences result when the recognition of deductions for tax and accounting standards differ in their timing. The result
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Accounting Chapter 4 Flashcards

Once all the temporary accounts are closed, the balance in the income summary account should be equal to the net income of the company for the year. Once this process is complete, a post-closing trial balance is prepared which helps in preparation of the balance sheet. Similarly, balances in all expense accounts are transferred to
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