One of the crucial facts that you should know before you start running a business is that you need to generate financial statements of your company for every financial year. This is what every business should do as the financial statements can portray the financial position and business performance of the company. With the help […]
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Counting and Auditing the Warehouse Inventory
Typically, the small and private businesses will appoint in-house auditors or engage an audit firm in Johor Bahru to perform an internal inventory audit every year. Their warehouse inventories may be in either an onsite or an offsite place. Although the procedures for valuing and counting inventories can be similar to that of those public […]
Can You Differentiate Net Income and Net Sales?
All the for-profit organisations have the same objective, that is to generate profit. To earn a profit, the company needs to make sales. Thus, we can see that there is a close relationship between sales and profit. If a company wants to earn more profit, it needs to increase its sales. However, income and sales […]
The Differences Between Calendar Year and Fiscal Year
In the world of business, there are two types of years, which are the calendar year and the fiscal year. You may have heard of the latter quite often if you run a business. However, do you know what does it mean and the differences between the calendar year and the fiscal year? Both of […]
First in, First out (FIFO) and Last in, First out (LIFO)
Managing the inventories of a company is never an easy task for companies which are entirely stock oriented. Business owners may use various ways to maintain the inventories they own (Also see Periodic Inventory System and Perpetual Inventory System). Some of the examples are first-in, first-out (FIFO), last-in, first-out (LIFO), weighted average, as well as […]
What Should Auditors Do When They Receive Electronic Audit Evidence?
Nowadays, you can hardly find a company with cancelled paper cheques and handwritten ledgers. The auditors in audit firms in Johor Bahru examine, inspect and rely on the financial trails when they perform audits and now, electronic data and digital records may make up those trails partially or entirely (Also see Safety Tips to Safeguard […]
What Do Market Value and Book Value Mean?
An asset’s market value shows its actual market price, where people would trade it at that price at the marketplace. On the other hand, an asset’s book value indicates its accounting value, which is calculated by subtracting accumulated depreciation or amortisation (Also see What is Goodwill Amortisation?) from the asset’s historical cost. This means that […]
An Overview of Bank Reconciliation
The bank reconciliation refers to the process of matching up the information on a company’s bank statement with the corresponding balances in its accounting records for cash accounts. This process aims to find out the differences between them and record the changes to the company’s accounting records (Also see How Do Accountants Record Transactions?). On […]
What is Goodwill Amortisation?
Goodwill amortisation is the systematic and gradual reduction of the value of a company’s goodwill asset. A company may calculate the reduction by recording amortisation charge regularly. Based on the accounting standards, companies may choose to conduct the amortisation over ten years on a straight-line basis (Also see Straight-line Depreciation and Accelerated Depreciation). If a […]
Procedures of Field Audit for Inventory Audits
In an inventory audit, a visual inspection can be crucial for all companies regardless of the field of their business. The expenses for inventory may make a significant contribution to the operating expenses of a company (Also see Should You Include Cost of Goods Sold (COGS) as Expenses?). Therefore, it has to ensure that it […]