Is sales commissions a cost of goods sold or operating expense?

However, the company will only receive the revenue for the sale in two weeks when the goods are delivered to the customer. The expense of the sales commission is only put on the books when that same revenue is recognised. This means that commissions become a deferred expense, only to be realised at a later […]

The Ultimate Cash Flow Guide EBITDA, CF, FCF, FCFE, FCFF

This is the final piece of the puzzle when linking the three financial statements. The statement of cash flows is a central component of a company’s financial statements and provides users with key information to evaluate a company’s financial performance for investing or other decisions. Financial statement preparers and users should develop a clear understanding of […]

Liability: Definition, Types, Example, and Assets vs Liabilities

The business borrows money and agrees to repay it over a set period of time. A balance sheet presents a company’s assets, liabilities, and equity at a given date in time. The company’s assets are listed first, liabilities second, examples of long term liabilities and equity third. Long-term liabilities are presented after current liabilities in […]