What are common concepts and techniques of managerial accounting?

June 30, 2024 No Comments

A: The common concepts and techniques of managerial accounting are all the concepts and techniques that surround planning and budgeting, short- and long-term project decision making and operational measurement of performance. What Is Managerial Accounting? Managerial accounting is the process of identifying, analyzing, recording and

What are common examples of noncurrent assets?

June 30, 2024 No Comments

A: Noncurrent assets are a company’s long-term investments or assets that have a useful life of more than one year. Typically, noncurrent assets last many years and are considered illiquid, meaning they can’t be easily liquidated into cash. Noncurrent assets are the opposite of current assets. Current assets are assets used in

What are common scenarios in which managerial accounting is appropriate?

June 30, 2024 No Comments

A: Common scenarios in which managerial accounting is appropriate are any situations in which a company competes in a fast-paced and highly competitive business environment. Any scenario where a quick decision is valuable is where managerial accounting is appropriate. Examples are cash flow management, sales

What are examples of key operating activities in a company?

June 30, 2024 No Comments

A: Key operating activities for a company include manufacturing, sales, and advertising and marketing activities. Operating activities are the daily activities of a company involved in producing and selling its product, and generating revenues, as well as general administrative and maintenance activities. The operating income

What are financial risk ratios and how are they used to measure risk?

June 30, 2024 No Comments

A: Some of the financial ratios that are most commonly used by investors and analysts to assess a company’s financial risk level and overall financial health are the debt-to-capital ratio, the debt/equity ratio, the interest coverage ratio and the degree of combined leverage. Financial risk

What are general and administrative expenses?

June 30, 2024 No Comments

A: In accounting, general and administrative expenses represent the necessary costs to maintain a company’s daily operations and administer its business, but these costs are not directly attributable to the production of goods and services. Information on this type of expense is especially useful when

In what types of financial situations would credit spread risk be applied instead of default risk?

June 30, 2024 No Comments

A: Default risk and spread risk are the two components of credit risk, which is a type of counterparty risk. Think of default risk as more closely associated with the general conception of counterparty risk: noncompliance with the specifications and terms of a contract. Spread

In which industries is Average Collection Period most important?

June 30, 2024 No Comments

A: The industries in which average collection period – the median amount of time necessary for a business to recover its receivables – is most important are those in which receivables make up the greatest portion of cash flows. These industries include banks and financial

Is a deficit in the balance of payments a bad thing?

June 30, 2024 No Comments

A: First, it’s important to distinguish between the balance of payments and the current account. When the terms “trade deficit” or “trade surplus” are used in media, they are almost always references to the current account. The current account is just one part of the

Is it possible for a company to have a positive cash flow and a negative net income?

June 30, 2024 No Comments

A: This situation may seem a bit counter-intuitive at first, but it is actually quite common and not too difficult to understand. Let’s break down the factors at play to examine more closely how a company can have a negative net income and a positive

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