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Is Warranty Expense recognized the same period that sale revenue is recognized because of the conservatism principle?
No, that is the matching principle, which can be defined as: The costs of doing business are recorded in the same period as the revenue they help to generate. Examples of such costs include the cost of goods sold, salaries and commissions earned, insurance premiums, supplies used, and estimates for potential warranty work on the merchandise sold. Consider the wholesaler who delivered five hundred CDs to a store in April. These CDs change from an asset (inventory) to an expense (cost of goods sold) when the revenue is recognized so that the profit from the sale can be determined.
How to calculate gross profit?
Sales (or revenue, it's the same thing) - cost of goods sold= Gross Profit
Is direct cost and controlled cost the same?
No direct cost and controlled costs are both separate costs.
Is a company earnings are the same as its revenue?
A company's earnings are equal to revenue less costs of production over a given period of time.
What is netted revenue?
In the oil and gas industry it represents the working interest owner's share of gross revenue less taxes (production and severance), conservation fees, marketing and handling fees AND their share of operating costs. The owners costs are said to be "netted" against their revenue.
Why total revenue equal to total cost?
No total revenue is total finance in, you need to take from this the running costs of the business to get the gross profit (net sales minus the cost of goods and services sold).
Is Warranty Expense recognized the same period that sale revenue is recognized because of the conservatism principle?
No, that is the matching principle, which can be defined as: The costs of doing business are recorded in the same period as the revenue they help to generate. Examples of such costs include the cost of goods sold, salaries and commissions earned, insurance premiums, supplies used, and estimates for potential warranty work on the merchandise sold. Consider the wholesaler who delivered five hundred CDs to a store in April. These CDs change from an asset (inventory) to an expense (cost of goods sold) when the revenue is recognized so that the profit from the sale can be determined.
How to calculate gross profit?
Sales (or revenue, it's the same thing) - cost of goods sold= Gross Profit
Why might a company have an increase in revenue and a fall in profits at the same time?
There has been a great increase in Cost of goods or expenses.
Are gross margin and contribution margin the same thing?
No, they're not the same thing. Gross Margin is revenue minus COGS (cost of goods sold). Contribution Margin is revenue minus variable costs (such as materials and labor that go into making the product). It shows you how much of each dollar of sales varies with the amount of sales, and thus, what percentage of each dollar of sales is left for fixed costs. This is the definition that I've understood. However, it's confusing even as I write it because the difference between them seems to imply that there are (or could be) variable costs below the gross profit line. Or maybe there are some fixed costs associated with costs of goods sold and that's why the distinction should be made above the gross profit line. If anyone has any contributions (no pun intended) that can clarify this, I would appreciate it. ---- Another way to distinguish between the two is by using these definitions. Gross Margin = Revenue - Full Absorption Cost*Contribution Margin = Revenue - Variable Cost *Full absorption cost being defined as the sum of the fixed and variable overhead, direct labor, and direct materials costs.
What is Consumer prices?
Consumer Price Index (CPI) is an index of the changes in the cost of goods and services to a typical consumer, based on the costs of the same goods and services at a base period.
Total revenue and total cost curves?
total cost= total revenue, it is the same thing in different name.
Is direct cost same to indirect cost?
No direct costs and indirect costs are not same and opposite of each other.
Is direct cost and controlled cost the same?
No direct cost and controlled costs are both separate costs.
Is a company earnings are the same as its revenue?
A company's earnings are equal to revenue less costs of production over a given period of time.
Are cost of goods available for sale the same as cost of goods manufactured?
No, because cost of goods manufactured is part of the first. Cost of goods available for sale also includes purchases
What is netted revenue?
In the oil and gas industry it represents the working interest owner's share of gross revenue less taxes (production and severance), conservation fees, marketing and handling fees AND their share of operating costs. The owners costs are said to be "netted" against their revenue.
