Category: Financial Accounting

In accounting, Cost of Merchandise Sold is an account used to track the costs associated with the purchase of products for resale in a merchandising or retail business. Cost of Merchandise Sold does...

In accounting, Cost of Goods Sold is an account used to track the costs associated with the manufacture of a product, including cost of raw materials, direct labor, packaging, and other direct costs....

Inventory is an accounting of items owned by a business that will either be sold to customers or converted from raw materials into items that will be sold to customers. Inventory is an asset. It has...

Under the Percent of Sales Method for tracking bad debts, credit sales (not cash sales) are multiplied by a percent to arrive at the estimate for bad debts. That percentage will be based on the...

Under the Aging of Accounts Receivable Method for accounting for bad debts, a company creates an estimate of bad debts based on the age of outstanding invoices. This estimate is based on a company's...

The Allowance Method for Doubtful or Uncollectible Accounts is used to estimate future bad debts based on current month revenues. Using past performance data, a company can estimate that a certain...