Net realizable value is a critical concept in accounting, used to ensure that the value of assets on financial statements is not overstated. Here, we explore the application of NRV in different accounting contexts, including inventory valuation, accounts receivable, and cost accounting. According to the notion of lesser cost or net realizable value, inventory should […]

The PO serves as a check for the invoices that need to be paid. If you need to pay international invoices, you’ll already know it can be a pain. Now you know the difference between purchase order vs invoice, you’ll see that both play a key role in the purchasing cycle. The two documents work […]

When book value equals market value, the market sees no compelling reason to believe the company’s assets are better or worse than what is stated on the balance sheet. This sometimes creates problems for companies with assets transfer price definition that have greatly appreciated; these assets cannot be re-priced and added to the overall value of […]

One reason might be to meet company goals, such as gaining market share. Other reasons include being a leader in the use of innovation and improving efficiencies. If a company uses the latest technology, such as online ordering and delivery, this may help the company attract a new type of customer or create loyalty with […]

The Quick Ratio and the Current Ratio are two essential metrics for evaluating a company’s financial health and liquidity. While they share the same objective of assessing a company’s ability to meet its short-term obligations, they do so in slightly different ways. Understanding the distinctions between these two ratios is vital for a comprehensive financial […]