Current Portion of Long-Term Debt CPLTD
Long-term liabilities include loans or other financial obligations that have a repayment schedule lasting over a year. Eventually, as the payments on long-term debts come due, these debts become current debts, and the company’s accountant records them as the CPLTD. Current liabilities are those a company incurs and pays within the current year, such as […]
Process Costing System: Definition, Types, and Examples
As the product keeps completing the stage of production, the cost is added for each completed stage. Once, all the production activities are completed the product is ready with the full cost of the production. Overhead costs include all indirect costs, such as rent, utilities, and depreciation, not directly related to the production process. The […]
Materiality Threshold in Audits: Decoding the 5% Rule
This type of materiality acts as a buffer, providing an additional layer of assurance that the financial statements are free from material misstatements. Performance materiality is particularly useful in complex audits where the risk of multiple small misstatements accumulating to a material level is higher. By setting a lower threshold, auditors can perform more detailed […]
How to Create a Nonprofit Operating Budget
Keep these benefits at the forefront of your mind as you create your next budget. These might also be helpful reminders for your team The Key Benefits of Accounting Services for Nonprofit Organizations if they need motivation to participate in the budget planning process. The more buy-in you get from your team, the better the […]
Earnings Per Share EPS Meaning, Formula & Importance
If earnings decrease or the number of shares increases, EPS will decline as well. Thus, we use the weighted average common shares to account for this time difference. Basic EPS is a useful metric but it should not be analyzed in isolation as the sole indication of a company’s profitability or performance. It is necessary […]
Current Ratio Formula, Meaning & Solved Example for Students
Consider a hypothetical house building company; in many cases, a lot of money will have to be spent—on such things as property, wages and materials—without regular cash inflows. In such a case, a higher current ratio—for example, 1.3 to 1—might be more appropriate. Keeping an eye on your current ratio will also give you a […]