Net profit is also called the bottom line, net income or net earnings and it is the measurement of profitability of a venture after accounting for all costs incurred during the period. Net profit is equal to the gross profit minus overheads minus interest payable for the accounting period. A common synonym for net profit… Read More

Under the Average Cost Method, it is assumed that the cost of inventory is based on the average cost of goods that are available for sale during the period. The average cost is calculated by dividing the total cost of goods available for sale by the total units available for sale. This gives you a… Read More

GAAP stands for “generally accepted accounting principles”. GAAP is an international convention of good accounting practices. It is based on a few core principles. Some circumstances would allow an accountant to be held liable for deviating from these principles: The basic objectives of GAAP: Useful to present the financial state of the business to potential… Read More