Accounting

What is depletion expense? Depletion Expense can be defined as the cost associated with usage of natural resources, including oil, natural gas, and coal. This cost is mostly incurred once these natural resources have been extracted. It includes purchase price, or the cost of the resource, cost of rights, or anything else required to prepare

What are Decommissioning Costs? Decommissioning costs are incurred by the company when they need to spend reserves to restore the production site and the production equipment to the desired ecological condition before the operation. In other words, this is the cost that the company is expected to pay at the end of the useful life

What are Current Assets? Current assets represent all the company’s assets that the company possesses and are expected to be sold with relative ease compared to other assets that the company has. These are the assets exhausted through standard business operations within one year. Current assets report on the company’s balance sheet, and they present

Inventory is defined as the goods that the Company holds for resale. When an accounting year ends, companies mostly have inventory on hand that is supposed to be sold in the coming year. This inventory is kept in the warehouses, and they are then declared on the financial statements as closing inventory of the Company.

Definition of Historical Cost Historical cost accounting is accounting that involves reporting items at their historical cost (at the purchasing prices), not their market value. In other words, under this regime, the asset is recorded at the price that is paid at the time of the acquisition. Under the historical cost accounting concept, accountants are

What is Depreciation? Depreciation can be defined as the cost reduction of a fixed asset in a manner systematically designed to reduce the value of the asset to zero. Depreciation reflects the wear and tear in assets that are incurred as a result of the usage of the asset. In typical accounting terms, depreciation can

Overview A non-profit entity is considered a public entity that works for public interest without an intention to generate any profit. Non-profit organizations have an underlying objective or a mission to provide benefit to the public. Unlike organizations that are made for profit, non-profit organizations have different ways of representing information on the financial statements.

What are Accounts Payable? During the normal course of the business, several different transactions are completed on a credit basis. This means that the company purchases goods at an earlier date, and then pays the supplier at a later date, after mutual consensus. When this happens, the company is said to have purchased goods on

Definition of Unearned Revenue Unearned Revenue is referred to as deferred revenue. It can be defined as a payment that the company receives against goods and services that are not yet delivered. They are meant to be delivered sometime in the future. In accordance with the accrual principle of accounting, companies are required to record