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 […]
Category: Bookkeeping
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 […]
Differences Between Period Costs and Product Costs
Period costs are the costs that you are unable to capitalise into fixed assets, inventories or prepaid expenses. On the other hand, product costs are the costs that you have spent on manufacturing a product. You probably have heard of these terms, and you may wonder what their differences are, and you may mix them […]
Understanding Product Costs and Period Costs
What type of cost would you include when calculating the expenses that your company has spent? The costs that you should consider are the product costs as well as period costs. The former is the cost that you have spent on producing a product. In contrast, the latter refers to any costs that you are […]
Periodic Inventory System and Perpetual Inventory System
If you are running a manufacturing business, inventories are what you always need to handle. Doing accounting tasks about inventories are challenging, especially if you are unfamiliar with accounting. Hence, if you are not sure how you should do it and you do not want to hire an in-house accountant in your company, outsourcing your […]
How Can You Collect Payments for Overdue Invoices?
An overdue invoice refers to billing that a company has not paid at its due date. If your company extends credit to your clients, there is a high possibility where you need to collect payments for overdue invoices. Other than hiring an accounting firm in Johor Bahru to keep proper accounting records, collecting payments for […]
Should You Include Cost of Goods Sold (COGS) as Expenses?
Some business owners who are not familiar with accounting may have a big doubt in their mind when they calculate the cost of goods sold for their companies: Should they include it as an expense? The answer to this question is yes, yet some of them who do not know this may end up being […]
How to Forecast Cash Flow?
If a business owner wants to forecast the cash flow of his company, the process includes creating a comprehensive list of when his company will receive or spend cash in the future. This information is essential for him to make investment and fundraising decisions. Cash flow is vital for every business because no matter how […]
How Do Accountants Record Transactions?
Have you ever wondered how the accountants in an accounting firm in Johor Bahru record all kinds of business transactions? When a transaction occurs, there are various methods the accountants can use to record it in the books of a company. The most basic way of recording transaction is by using the journal entries. The […]