To gauge the financial health of a business, accountants use “ratio analysis.”[1]  Ratio analysis consists of examining the proportional relationship of multiple accounts.  Ratios can be compared over time in what is called “time trend analysis” to see if a ...

Accounting has been called the "language of business"[1] and an understanding of accounting principles is necessary to decipher financial statements. Historically, the Financial Accounting Standards Board, abbreviated F-A-S-B and pronounced “FAZ-BEE,” has been the private sector organization responsible for promulgating the ...

Intangible Assets Intangible assets include patents, copyrights, trademarks, service marks, trade names, franchising rights and trade secrets.[1]  Some intangible assets are recorded as deferred charges, such as costs of incorporation or software development.  Acquisition of intangible assets can, as with other ...

Inventory A significant topic in financial accounting is the valuation of inventory as current assets. Its computation involves three steps.[1] The first is to tally the number of items in the company’s inventory. Second, one must assign a unit cost to each item.  ...

Recognition The twin principles of revenue recognition and matching address how and when revenue and expenses should be recorded.  Revenue could be recognized when an item is ordered, produced, shipped or received by the purchaser.  The rules of accounting require that the revenue’s associated expenses be ...

Luca Pacioli, a Renaissance monk, authored the first published work on accounting in 1494.  His text described a system that already had been in use for about 200 years.  Although present-day technology has altered the way businesses record financial transactions, ...

When faced with a civil action involving a tort, a defendant may assert various defenses to escape liability. There are some defenses that are commonly used in response to intentional torts. In this module, we will focus on the defenses ...

There are two types of nuisance: public and private. Public nuisance involves infringement on public rights.[1] With a public nuisance, an entire community or large group of people may be affected by the tortfeasor’s actions. Examples of public nuisance may include polluting the ...

Intentional torts are civil wrongs that result from the intentional actions of a party. That does not always mean that the wrongdoer intended to harm the victim, but she must have at least intended to perform the act that ultimately ...

Under product liability law, product manufacturers and sellers are expected to distribute safe and reliable products. When they fail to do so, and the users of these products are harmed, parties in the chain of distribution can be held liable ...