Bookkeeping

LIFO Reserve: Definition, Formula Example, And How Does it Work

By adding the LIFO reserve to the LIFO inventory, the resultant figure would depict what the inventory valuation would be like if FIFO method was used instead. Likewise, subtracting the LIFO reserve from the LIFO-based COGS provides the COGS as if calculated under FIFO. As a result, the LIFO reserve aids in achieving a more […]

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How to Calculate and Use the Accounts Receivable Turnover Ratio

In some industries, credit cycles of 60 days are common, decreasing AR turnover ratios. Hence, the latter is measured in days while the former is measured in times. They collect average receivables five times per year or every 73 days. Cleaning companies, on the other hand, typically require customer payment within two weeks. If you

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