Cost Accounting: Profit and Loss Calculation
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Course overview
- Provider
- Coursera
- Course type
- Free online course
- Level
- Intermediate
- Deadline
- Flexible
- Duration
- 4 hours
- Certificate
- Paid Certificate Available
- Course author
- Gunther Friedl
-
You will learn different methods of preparing an income statement.
You will learn to explain why different methods yield different profit numbers.
You will learn to choose the best-suited method for your decision situation.
Description
Companies do not only need to know the costs of different products, but they also need to know whether they gain a profit or realize a loss. We explain how companies use cost information to calculate their profit and assess their profitability. Depending on how companies account for changes in inventories, we distinguish "absorption costing" and "variable costing". In addition, some companies structure their income statement according to the "nature of expense method", while others structure it according to the "cost-of-sales method". We explain both methods and discuss their advantages and disadvantages.
