Closing stock is the quantity of inventory that a firm has at the end of a financial period. Inventory can be raw materials, work-in-process, or…
Deferred Income Tax (DIT) – Definition, Types and Examples
Deferred income tax (DIT) is an accounting concept that refers to the difference between the reported income of a company and its taxable income. It…
Direct Labor – Definition, Formula, Calculation and Examples
Direct labor is the term used to describe the work done by employees who are directly involved in creating a product or service. This includes…
Direct Expense: Definition, Examples, Importance
Direct expense refers to an immediate and direct financial cost incurred by a business. This could include raw materials, labor, shipping, and other costs associated…
Deferred Income – Definition, Examples and Tips
The deferred income is the money a firm receives in advance for goods or services that haven’t been produced or delivered yet. In other words,…
Diminishing Balance Method – Definition, Formula and Advantages
What is the Diminishing Balance Method? The diminishing balance method is a method of calculating the depreciation expense of an asset for each accounting period….
Direct Materials – Definition, Types, Examples and Advantages
Direct materials are the physical inputs that go into the making of a product or service. These are the raw materials that are used in…
Differential Cost – Definition, Examples and Applications
What is Differential Cost? Differential cost is the difference in total cost between two alternatives. Differential costs can be used to make decisions about which…
Departmental Accounting – Definition, Types and Advantages
Departmental accounting is the process of allocating financial resources and performance measurements to specific departments within an organization. This type of accounting can help businesses…
Budget Variance – Definition, Types and Analysis
What is a Budget Variance? A budget variance is the accounting discrepancies in which actual costs are either lower or higher than the standard, baseline,…
Bookkeeping – Definition, Features, Importance and Steps
Bookkeeping is a process through which a company or an organization keeps a record of a company’s financial transactions by entering the details into a…
Hedge Accounting – Definition, Types and Calculation
Hedge accounting is an accounting method used to manage financial risks and to protect against price changes in assets or liabilities, interest rate changes, foreign…
Days Inventory Outstanding (DIO) – Definition, Formula and Examples
Days Inventory Outstanding (DIO) is a measure of the number of days that a company’s inventory remains unsold. It is calculated by dividing a company’s…
Hard Asset – Definition, Examples, Benefits and Risks
A hard asset is a physical or tangible asset that has value and can be sold and these assets are generally held for a long…
Generally Accepted Accounting principles (GAAP)
GAAP is the acronym for generally accepted accounting principles. GAAP is a set of accounting rules and guidelines that companies must follow when they prepare…
