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Accrual accounting is a method that records revenues and expenses when they are earned or incurred, not when cash is exchanged. This means that if I sell a product today, I record that sale even if the customer hasn’t paid yet. It follows the matching principle, which ensures that expenses are matched with the revenues […]
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The cost of goods sold (COGS) line, or cost of sales, represents the total costs of manufacturing the products sold by the company. A P&L statement summarizes the revenues, costs, and expenses of a company for a specific period of time. The P&L statement is one of three financial statements that every public company issues on […]
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