Operating Expenses

utilities expense accounting equation

Utilities Expense

A business utilities expense is a cost a business pays for using the infrastructure provided by public utilities companies, they can include electricity, natural gas, water, sewage, and telephone services.

Last modified February 3rd, 2023 by Michael Brown
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defined contribution pension plan bookkeeping

Defined Contribution Pension Plan

Pension plans generally fall into two types, defined contribution pension plans or defined benefits pension plans. In a defined contribution pension plan, the contributions are known (defined) and guaranteed and the benefits will vary depending on the investment performance of the plan. In a defined benefits pension plan, the benefits are known (defined) and guaranteed and the contributions will vary depending on the amount needed to fund the defined benefits.

Last modified January 8th, 2020 by Michael Brown
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fob shipping point fob accounting

FOB Shipping Point Freight Prepaid

A business sells goods to a buyer with the terms FOB shipping point freight prepaid. The value of the goods is 5,000 and the settlement terms are 2/10, n/30. The freight cost from the shipping point to the buyers destination is 700. The seller prepays the freight expense. Calculate the following . . .

Last modified November 4th, 2019 by Michael Brown
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fob destination fob accounting v 1.0

FOB Accounting

FOB accounting deals with the treatment of freight charges and how they are recorded in the accounting system.

FOB means Free on Board and is an abbreviated term used in shipping. It is important to understand the nature of the term accounting FOB, as it will affect how the freight charges are posted to the accounting records.

Having decided that the terms of the contract are FOB, it is now necessary to choose the point at which responsibility passes from the seller to the buyer. The FOB point can either be the buyers destination, or the place from which the goods are shipped – the shipping point.

Last modified November 4th, 2019 by Michael Brown
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operating lease accounting

Operating Lease Accounting

Operating lease accounting deals with the treatment of an asset rented by your business under the terms of an operating lease agreement.

An operating lease is an agreement between your business (lessee) to rent an asset from a lessor. The lessor (lease company, finance company etc.) owns the asset, and your business rents the asset in return for a periodic rental payment. Your business never owns the asset, at the end of the term it is returned to the lessor.

Last modified January 8th, 2020 by Michael Brown
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overhead cost break even revenue formula

Overhead Costs

Overhead costs are the indirect recurring costs of running a business such as administration, selling, and premises expenses. They are all the support costs of a business which are not directly attributable to the goods or services that the business is producing.

Last modified October 18th, 2019 by Michael Brown
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