Category Archives for Introduction

Cost of Goods Sold and The Income Statement for Manufacturing Companies

Manufacturing companies are companies that make a product. Because these companies have inventory in various stages of production, there are three inventory accounts that we must deal with in order to

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Income Statements for Merchandising Companies and Cost of Goods Sold

Merchandising companies sell products but do not make them. Therefore, these companies will have cost of goods sold but the calculation is much easier than for a manufacturing company. Expenses for a merchandising

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Income Statements for Service Companies

Service companies have the most basic income statement of all the types of companies. Since service based companies do not sell a product, the income statement will not contain cost of goods sold. Therefore,

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Product and Period Costs

Most companies use products as the main basis for their cost objects. Looking at the cost of products is extremely important to pricing of those products. As we classify costs, one of the most useful classifications

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Cost objects: direct and indirect costs

Managerial accounting is the art of planning, decision making and controlling in business. In order to do that, we must identify what we want to track. Are we looking at a product, a store, a department

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