Callable bonds have an option exercisable by the issuer to retire them at a stated dollar amount prior to maturity. A credit sale to an international customer is recorded at the exchange rate on the date of sale. A noncash purchase of land is reported in the investing section of the statement of cash flows as a separate line item. Purchase of stock in another company is classified as a financing activity. Three of the most common tools of financial analysis include horizontal analysis, vertical analysis, and ratio analysis.
Liquidity refers to the availability of resources to meet shortterm cash requirements.
Selling and administrative expenses are normally included in factory overhead. Managerial accounting practices tend to have a rigid structure because managers need to be protected against false or misleading information. The job cost sheets for completed and sold jobs show total costs equal to the period's cost of goods sold. Process costing involves repetitive production and heterogeneous products among its features. Once equivalent units are calculated for materials, this number may also be used for direct labor and factory overhead.