Category: Bookkeeping 101

Activity-Based Costing in Healthcare Saves Millions

May 20, 2020 Bookkeeping 101 by ann
Activity-based costing is an improved method for allocating overhead costs. Instead of using one factor for cost allocation, this new method focuses on different aspects of the production process and allocates the overhead based on each product’s reliance on different overhead aspects. The first stage of allocation determines the cost of each occurrence of an
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What is other comprehensive income?

May 20, 2020 Bookkeeping 101 by ann
Understanding the Income Statement Other comprehensive income can consist of gains and losses on certain types of investments, pension plans, and hedging transactions. It is excluded from net income because the gains and losses have not yet been realized. Investors reviewing a company’s balance sheet can use the OCI account as a barometer for upcoming
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Is Accumulated Depreciation a Current Asset?

May 19, 2020 Bookkeeping 101 by ann
Accumulated depreciation is a balance sheet account which is used to offset the actual cost of assets that are being used in the business. Understanding and accounting for accumulated depreciation is an essential part of accounting. While the process can be moderately challenging, you can learn how to account for accumulated depreciation by following a
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Depreciation Methods

May 19, 2020 Bookkeeping 101 by ann
Accumulated depreciation is presented on the balance sheet below the line for related capitalized assets. The accumulated depreciation balance increases over time, adding the amount of depreciation expense recorded in the current period. Depreciation expenses, on the other hand, are the allocated portion of the cost of a company’s fixed assets that are appropriate for
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How to Calculate Amortization: 9 Steps

May 19, 2020 Bookkeeping 101 by ann
The two main distinctions between assets on the balance sheet are current and non-current assets. As stated earlier, current assets are assets used in the short-term. Current assets on the balance sheet contain all of the assets that are likely to be converted into cash within one year. Companies rely on their current assets to
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