Kuntala Banerjee, Author at unremot.com

Total revenue formula – How to calculate total revenue [With examples]

In this post, we discuss in detail what is total revenue formula is, how is revenue calculated, net revenue vs gross revenue, and how to define total revenue using the annual revenue calculator.

Total revenue formula

In the world of economics, total revenue is the amount calculated after the total sales of goods and services of a company. The income statement of a company captures the total revenue.

The next question is, What is the total revenue formula?

What is total revenue formula?

The total revenue formula demands the calculation of the total number of units sold by the company as the first step. The next step in the formula for total revenue is to determine the average price per unit of the goods sold. For finding total revenue, you need to multiply both:

Total revenue = (average price per unit sold) x (number of units sold)

If you are a service-based company, then the total revenue formula is:

Total revenue = (average price per service sold) x (number of services sold)

While calculating the total revenue, the recommendation is to consider all the monetary transactions for accuracy.

Also read: Economic profit – How to calculate economic profit

Revenue function formula

The most common revenue function formula is that of the total revenue formula which is represented by R=PQ. Here R is the total revenue, P is the price per unit of the product or service sold and Q is the quantity of the product or the service. Ensure to include non-operating revenue in the total revenue calculation such as investment gains or dividend income.

The company’s total annual revenue aids in determining its financial health. An increase in total revenue indicates greater income and hence greater potential to pay off the company’s expenses or liabilities.

Also read: Fair value accounting – Basics on fair value accounting

Define gross revenue

What is gross revenue meaning and how to calculate gross revenue?

The simplest way to define gross revenue is the total sum of all the money earned by the company. It includes the amount earned from the sale of goods and services, sale of shares, sale of property and equipment, and interest. It is included in the company’s income statement. Under the gross annual revenue head, you can find details of the total income and the expenses that need to be deducted from it to calculate the net revenue or the net income.

The Gross revenue formula is as mentioned below (total revenue minus total cost):

Gross revenue = Total revenue – Cost of Goods Sold

Marginal revenue economics definition

Marginal revenue economics definition is the increase in total revenue due to the sale of 1 additional unit of the product or service. It reflects the incremental variation in the company’s earnings after incurring the sale of 1 additional unit.

The marginal revenue can be the same for a certain period of time for a certain output level, following the law of diminishing returns in economics. Companies who opt to remain competitive in the market and intend to maximize profits will continue to increase the production level till marginal revenue is equal to marginal cost.

Also read: Tax accounting – Basics on tax accounting and 5 key principles

Define net revenue formula

Net revenue is the deduction of sales commissions, returns, and discounts from the gross revenue. So after calculating via the total revenue formula, and computing the gross revenue, you need to perform the net revenue calculation as follows:

Net revenue formula or the equation for revenue (net): Gross revenue – discounts – returns – commissions

The deductible part can vary depending on the gross sales made by the company on its products or services. Net revenue is majorly used to report the financial status of a company. It aids to understand what will be the company’s total profit before taking into account the liabilities, taxes, overhead, non-commissioned employee salaries, and expenses. A company’s income statement reflects the net revenue.

Total revenue vs marginal revenue

The total revenue formula considers the entire amount of the total sales of goods and services. In fact, the total revenue equation considers multiplying the average per-unit price with the total number of goods or services sold. Marginal revenue, on the other hand, is the increase in the total revenue function due to the sale of 1 additional unit of product or service.

The importance of total revenue is to understand the difference between the total revenue and total costs. The more is the difference, the more a company can maximize its profits. The importance of marginal revenue is to find out how much a company can increase revenue by selling additional products or services.

Also read: Best business audiobooks – Top 75 business audiobooks

Revenue Equations

In this section, we will now focus on the different revenue equations or revenues formulas involving the total revenue formula, monthly or annual gross revenue, and marginal revenue. These are very important components of a company’s income statement and defines the financial status of a company.

1. How to calculate total revenue?

How to find total revenue? – As a first step, you need to calculate the total number of units sold by your company. It can be products or services. The second step is to determine the average price per unit sold.

Then as per the total revenue economics formula, here is the equation:

Total revenue or sales revenue = Average price per unit sold * number of units sold

In the total revenue formula, interests or dividends are also recommended to add. Any monetary changes in the company’s books must be accounted for under the head of the total revenue calculator.

2. How to calculate net revenue?

To calculate net revenue, as a first step you need to calculate the gross revenue. The gross revenue calculator states,

Gross revenue = Total revenue – Cost of goods sold

Then the second step is to determine the deductions that you need to consider in the net revenue equation. The amount to be accumulated for deductions is from discounts, sales returns, and commissions. They are cumulatively called selling expenses.

The last step is to calculate the net revenue, by subtracting the selling expenses from the gross revenue.

Net revenue = Gross revenue – discounts – returns – commissions

Also read: Business ideas for college students

3. How to find the revenue function?

If you want to know how to find the revenue function, then the simple answer is to multiply the output generated with the price per unit. The output is the number of units sold for a product or service.

The revenue function formula is that of the total revenue formula and is represented by,

R = P X Q, where R is the revenue, P is the average price per unit and Q is the total count of products or services.

4. Marginal revenue calculator

The marginal revenue calculator is to determine the incremental change in the company’s earnings after selling 1 additional unit of product or service. It is calculated by dividing the change in the total revenue by the change in the total quantity of products.

The representation of the marginal revenue equation is,

Marginal revenue = (Change in total revenue) / (change in quantity)

And symbolically represented as, △MR= (△TR/ △Q)

So initially you need to use the total revenue formula accounting to calculate the total revenue and then determine the change in the earnings with respect to the change in the quantity sold.

Also read: Mark to market accounting

5. Maximum revenue formula

Maximum revenue is the total revenue calculated at the maximum demand and maximum price.

The maximum revenue formula is represented as,

R = pQ

Here R is the maximum revenue, p is the price of the good or service at maximum demand and Q is the total quantity of goods or service at maximum demand.

To find out p and Q, you need to use the derivative function. The maximum value of the function occurs when the derivative is 0. So you need to determine the first derivative of the revenue function to calculate the maximum revenue.

Example of total revenue

The total revenue formula states that the average price per unit product or service must be multiplied by the number of products or services sold.

Total revenue = Average price per unit sold * number of units sold

An example of total revenue:

A company is selling 100 units of laptops at an average price per unit of INR 45,000. Here, the total revenue is INR (45000 * 100) = INR 45,00,000. Now if the company sells 50 units of laptops at an average price per unit of INR 30,000. The total revenue will be INR (45,00,000 + 50 * 30,000) = INR 45,00,000 + 15,00,000 = INR 60,00,000.

Also read: What is the accounting rate of return explained with 3 real-life examples

Net sales vs gross sales

In this section, we will try to understand net sales vs gross sales or net revenue vs gross profit.

Gross sales is the sum total of all the sales transactions made by a company within a particular period of time. Net sales is calculated by deducting the sales returns, discounts, and sales allowances or commissions from the gross sales.

In the world of accounting, the deductions fall under the debit balance or account and the gross sales fall under the credit balance or account. The deductions offset the sales accounts as the accounting formula states debit balance must be equal to the credit balance.

Total revenue curve

A total revenue curve is a technique of representing the total revenue formula graphically. The slope of the total revenue graph is the marginal revenue. The curve for a company with market control (representing monopoly) is shaped like a hump whereas, for a company with no market control, the graph is a straight line or positive.

How to value a company based on revenue?

Answering the question of how to value a company based on revenue, we need to understand whether the company is earning a total revenue greater than the cost of goods sold. Thereby checking the gross profit or revenue of the company. Next is to check whether a company is able to earn higher even after deducting the sales expenses.

What is the formula for net income?

Net income = Total revenue – Cost of goods sold – Expenses

The expenses are usually the operating expenses. If the net income is positive, the conclusion is the company is earning profits. If it’s negative then it is undergoing loss.

Also read: What is materiality accounting & 5 practical examples

Is total revenue the same as sales?

While comparing net revenue vs net sales, the net sales formula includes only the earnings from sales activities. That’s the method to calculate sales revenue. The net revenue however includes activities from sales, earnings from interest, or dividends.

How to figure out gross annual income?

How to find annual income? – You need to multiply the sales price of a product or service by the number of quantities sold. You need to calculate the same for each of the products and then add all the values together to find the business gross income. So there is not much variation in gross income vs revenue.

Kuntala Banerjee

Kuntala is a versatile writer with a focus on diverse areas around work, productivity, collaboration at work, hiring, management, HR, and training. Her background of past experience in technology and consulting helps in molding razor-sharp insights into the research and user-focused content she creates. Professionally she is an IT consultant in a sales role and also a writer of short stories and poems, travel blogger, and fashion influencer.

Tax accounting – Basics on tax accounting and 5 key principles to make a note!

Accounting

If you are keen to learn about the niche of tax accounting, this blog is for you! Here we take a look at what is tax accounting, types and methods.

Tax accounting

Every individual engaged in any sector of society are liable to pay taxes to the respective government. There are certain statutory regulations that need to be followed while filing tax returns and generating tax statements. Tax accounting states down those policies and methods. In this article, we will focus on the roles of tax accountants, important facts on tax accounting, and taxes.

What is tax accounting?

Let us now try to understand what is tax accounting in appropriate legal terms. Tax services accounting or tax accounting specifies the accounting methods that are related to taxes. It states the rules and regulations to be followed by the companies or individual entrepreneurs while preparing their tax returns. The basic purpose of accounting for tax is to track the inflow and outflow of funds associated with individuals and entities.

It is of two types mainly – Tax accounting for individuals and tax accounting for business. Besides, there are categories segregated into international tax accountants, income tax accountants, and so on.

Also read: Fair value accounting – Basics on fair value accounting & 3 examples

How is tax accounting different from financial accounting?

What is the difference between tax accounting and financial accounting?

Tax accounting is commonly known to be following the cash-based accounting method. Whereas financial accounting is based on accrual-based accounting.

Tax accounting focuses majorly on actual cash receipts, and payments, and not on the related sale or purchase transactions. A sale or purchase transaction is not recorded until cash is received or paid. Small businesses normally use tax accounting services to easily manage their cash positions.

Companies following the financial accounting, record sales revenues and purchase expenses when they are earned and incurred. The record does not depend on whether the actual cash from sales has been collected or the actual cash for purchases has been paid.

Components of tax accounting

Let us now try to understand what are the different components of tax accounting under bookkeeping and taxes:

Deferred tax asset – It is the extra amount you pay as a tax on the incremental profit.
Deferred tax liability – In certain situations, a company or an individual entrepreneur pays fewer taxes in the current year due to timing differences. This leads to deferred tax liability.
VAT Accounting – VAT is added to any invoice as part of the taxation policies.
Transfer Pricing – It is paid by a company on the expenses incurred in the operating offshore office while having branches in other parts of the world
Income categorization – Income needs to be categorized into various heads like salary, rent, etc. Tax and accounting vary for each of the heads and must be recorded separately.

Also read: Mark to market accounting | A beginner’s guide

Tax accountant types

In this section, we will discuss the different tax accountant types. The focus will be on the individual entrepreneurs and the businesses of companies. There are some differences in the tax accounting elements which you need to remember. The three key types of accountant for taxes are elaborated below:

1. Personal tax accountants

Personal tax accountants are normally attached to a particular individual entrepreneurship firm. They help in calculating the income tax accounting and file the returns on their behalf. A personal tax accountant or income tax accountant is well-versed with the accounting rules, methods, taxation policies, statutory obligations, declarations, and reporting that need to be adhered to. They even help in tax planning and advanced tax services. Their accounting tax services also include managing the taxes related to inheritance tax, income tax, and capital gains and trusts.

2. Business tax accountants

Business tax accountants are mostly involved in tax planning and filing tax returns for large or medium-sized companies and firms. The tax accounting elements will be more and complex as compared to small businesses or individual entrepreneurs.

There will be inflow and outflow of funds and the company’s earnings from various sources. The outgoing funds can be directed towards the shareholders or some different business obligations. A business tax accountant needs to understand the complexities, the statutory and tax obligations of the region, and the audit compliances.

3. Tax Manager for Tax-Exempt Organisations

Tax-exempt organizations are the ones that are exempt from paying Federal Corporate Income Tax on the earnings from the various kinds of activities. The activities are related to the specific purposes that drive the granting of tax-exempt status.

For example, withholding tax, income that isn’t taxable, minimum wage and overtime rules, etc. may be exempt from tax. A tax manager is a person or one of the types of accountants, who guides the company in understanding the elements which can be exempted from tax. This helps in calculating the tax liabilities seamlessly.

Also read: Accounting rate of return | Everything you need to know

Federal tax accounting

Federal taxes are mainly of three types – individual income, payroll, and corporate income. The other taxes that need to be paid are excise taxes, estate tax, and other taxes and fees. It is recorded as a tax liability in the book of records.

Federal tax accounting determines when an item can be reported on a tax return file. It can be an income, credit note, or deduction. It’s a weapon to advise tax accountants and preparers on when to include an item in the tax return. The tax principles for Federal tax accounting determine which tax events must be considered.

International tax accounting

International Tax accounting deals with international accounting standards and laws prevalent across two or more countries by virtue of the tax agreements. The most common type of tax agreement is the double tax agreement or DTA. It occurs when a taxpayer is subjected to taxation on the same income in two countries, thus doubling the tax amount.

There are other international agreements or treaties dealing with special types of income or specific types of tax. International accounting for individuals and businesses is to determine the incomes that are subjected to international taxation.

Also read: What is materiality accounting & 5 practical examples

Tax accounting methods

There are primarily two types of tax accounting methods – accrual and cash basis. This is one of the most interesting tax concepts. One additional method in tax accounting is hybrid. In the accrual method, the income is recorded in the tax year when it is earned.

The most common accounting taxation method is cash basis. In this method, the income is reported in the tax year in which it is received. Hybrid is one of the tax accounting methods where some incomes are accounted for and reported through the accrual method and some through the cash method.

Also read: What is public accounting & what are the important services offered?

Difference between tax and audit

In this section, we will try to understand the difference between tax and audit. Taxes are essentially paid towards government funding and expenses towards carrying out public works. Government levies tax on any taxable income earned by businesses and individuals. Accountant taxation or tax accounting defines to a greater extent the fiscal policy of the government.

An audit is the evaluation and verification of the book of records, the accounts, and the different payment vouchers of a business or an individual entrepreneur. Besides, checking and validating the financial statements for correct representation is also part of audit activities.

Online tax accounting courses

There are several tax accounting courses for you to select, enroll and pursue:

Tax preparation and law 2021, 2020, 2019, and 2018 Income tax from Udemy
US International Tax Certificate Program from AICPA, ideal for a tax return accountant
Taxes and Decision Making by edx.org, instructor-based online course
Reporting use of firm resources and taxation by edx.org
Taxation certificate program from UCLA with 4 courses on Tax Planning for Individuals and entities, a good course on accounting for income tax
Certified income tax advisor program, certified tax consultant program, and certified income tax professional program from ICA for the role as a corporate tax accountant or corporate tax advisor

Also read: 10 Best accounting calculators and how to use of them

Tax accounting classes & universities

Some of the tax accounting classes & universities are mentioned below:

US Federal Taxation Specialization from the University of Illinois. There are 5 courses in this specialization. At the end of the course, you need to complete a hands-on project. After submission of the project, you will earn a certificate.
Introduction to Finance and Accounting Specialization by the University of Pennsylvania. There are 4 courses in this specialization course. This course also includes a hands-on project followed by certification
Master of Science in Taxation from Suffolk University for 46 credit hours
Master of Tax Accounting from the University of Alabama with 30 hours of coursework

IRS tax accountant

IRS (Internal Revenue Agents or tax agent) tax accountants are entrusted with the responsibility of reviewing tax returns, forms, and claims made by businesses and individual entrepreneurs.

Their duties include:

Reviewing and examining annual and quarterly consumer tax returns
Determine and assess the tax liability and overpayment of a business
Conduct an audit and evaluate the financial statements and the book of records
Analyze and prepare revenue reports for the Treasury Department of the United States
Determining whether the right amount of tax has been paid by a business or an individual tax-paying entity
Reviewing tax-exempt organizations to ensure that they comply and adhere to the tax-exempt regulations

Also read: What is fund accounting – key principles, & responsibilities

What is a tax manager?

Let us now try to understand what is a tax manager. A tax manager is essentially a certified tax accountant, assisting in easy tax and accounting services. The person is an expert, specializing in taxes related to federal, state, and local tax laws. One must possess knowledge of the Microsoft suite of products especially spreadsheets. In qualification, they may be CPA for taxes. Experience and expertise in the industrial domain coupled with knowledge of accounting tax service are important.

Kuntala Banerjee

Business ideas for college students – Top 35 ideas best suited to start from college dorms!

Businesses

Are you a college student looking for inspiration for starting a new business? In this post, we cover some of the most best business ideas for college students.

Business ideas for college students

Interested to be an entrepreneur in college? And looking for college dorm room ideas examples of business?

Starting a business at an early age may turn out to be more effective in the future. It is an opportunity to manage your finances better and afford the expenses required for academics.

But then, What is the best small business to start? Or What are the business ideas for schools?

In this article, we will discuss some of the best business ideas for college students and how to start a business in high school or how to be an entrepreneur in college. To succeed in both fields remember to check essaywriter.org and get the help you need.

Also Read: Family Business Ideas | Everything you must know

How is starting a business in college is fascinating?

Starting a business in college is advantageous for your future growth and career. Not only the college startups will provide an opportunity to pay off your study expenses independently but also help to gain confidence in executing a business single-handedly.

Furthermore, if your resume has details about being an entrepreneur at a young age; even if you do not continue, you are sure to be offered enticing job opportunities. Many companies love to hire enthusiastic professionals into various job roles. People with entrepreneurship experience are expected to bring in more positive outcomes and greater sales. Hence you should think of which business to start in college.

How to start a business in college?

There are innumerable entrepreneurial ideas for college students. But before selecting the best among the examples of business ideas, there are few things you must remember to start a business in college.

Perform research on the trending business ideas for college students
Understand the demands of consumers
Check whether the idea is beneficial to the customers
Verify the expenses that you need to incur vis-a-vis the profit
Validate whether the business idea would benefit you in the long run
Figure out ways to solve problems and introduce innovative thoughts

Also Read: How to start business with no money | A complete guide

Top 35 college businesses ideas

In the subsequent subsections, we will discuss the top college business ideas for you to refer to. The mentioned business ideas for college students vary from small scale to large-scale opportunities. Depending on your time, purpose, and financial needs, you can select the marketing ideas for college students.

1. Social media management as one of the college ideas

Social media management is one of the most popular college ideas. You can work as a social media manager and help in promoting the products and services of the companies. It ranks high among 10 best small business ideas for students.

2. YouTube business for students

YouTube is now a flourishing opportunity of business for students. You can pick up an interesting topic for example tutorial classes, travel guides, digital marketing, music, etc.; a good business plan for students.

3. Start a business in college on web design and development

One of the best ways to start a business in college is web design and development. With modern technology shifting to digital platforms, you can easily grab opportunities to start a business in this particular sector.

4. Content creation as student business

Content creation is a good idea for student business. To increase their online presence, companies prefer to publish high-quality content on their website. One of the best options for students startups is where you can focus on blog ideas for students.

5. Delivery service as one of the summer business ideas

One of the best and trending summer business ideas is to opt for delivery services. It may be food items or essentials to the students within the campus or the localities outside the campus.

Also Read: Self employed jobs | A complete guide

6. Animation and video creation as one of the creative project ideas for college students

Businesses often outsource video creation and animations for their brands. It is one of the creative project ideas for college students and a good business to start in college.

7. Small business for kids can be reselling textbooks

Reselling textbooks to junior students can be one of the good options for small business for kids. You can sell your own books or purchase from others and resell at a higher price.

8. Creating a website as one of the college businesses

Creating a website can be one of the best options for college businesses. You can select a niche for your website and publish blogs; one of the interesting college entrepreneur ideas.

9. Online Coaching Service as one of the Group project ideas for college students

One of the prevalent group project ideas for college students is to provide online coaching services. You can plan for conducting online classes and learning courses; one of the prevalent projects for college students.

10. Event Management activities as a college Entrepreneur

As a college entrepreneur, event management is one of the suitable business ideas for college students. Many companies outsource event management activities. You can assist them in organizing campaigns and promotional events.

11. Graphics and Icons as the things to sell at school to make money

If you have an affiliation for designing graphics and icons, then it is one of the best things to sell at school and make money. You can check websites that accept graphics and icons and plan things to sell to college students.

12. Business for College Students can be selling in the marketplace

A very popular business for college students is to sell in the marketplace. It can be web design, food recipes, article ideas for college students, composing music, and many more.

13. New product ideas for students can be selling clothes

Selling old clothes on online websites can be one of the new product ideas for students. You can collect old decent clothes and sell them at affordable prices on websites.

14. Hotel or resort reviews as one of the website ideas for students

One of the website ideas for students is to opt for hotel or resort reviews. You can get paid for reviews written and even receive incentives from the hotels or resorts.

Growing and selling fruits and vegetables as one of the marketing project ideas for college students

If you have a garden at your residence with sufficient space, then it is advisable to start growing fruits and vegetables. Once the farm produce is good then you can sell and earn profits; one of the flourishing marketing plan ideas student can pursue.

15. Lawn care as one of the business ideas for 10 year olds

Lawn care is one of the interesting business ideas for 10 year olds. It can be pocket money at the beginning which may scale up high in the future.

Also Read: Small business consulting | A how-to guide for everyone

16. Selling your work in Etsy is one of the Businesses to start in college

Etsy is a good place to sell your work and is one of the profitable businesses to start in college. You can think of things to sell in school like artwork, craftwork, books, jewellery, stationery, etc.

17. Baking can be one of the service project ideas for college students

Baking foods for pantries or bakeries can be one of the potential service project ideas for college students. You just need to be interested in cooking and baking.

18. Become a fitness instructor can be one of the program ideas for college students

People attending gyms look for personal trainers or instructors to assist them in their physical training. It is one of the aspirational program ideas for college students.

19. Writing student news is one of the business ideas for students in university

Many prominent newspapers hire writers on a freelance basis. You can write news about students, colleges, and universities; one of the enterprising business ideas for students in university.

20. Proofreading as one of the small business ideas for college students

Many companies or individual writers outsource proofreading tasks. You can opt for proofreading and get paid; one of the respectable small business ideas for college students.

Also Read: Business lawyer | An ultimate read for best results

21.Blog ideas for college students

Blogging can be one of the best entrepreneur ideas for college students. The prominent blog ideas for college students or student blog ideas being travel, food, academics, fitness plans, and many more.

22. Babysitting as one of the business ideas for 14 year olds

Babysitting is one of the most popular business ideas for 14 year olds. So if you are thinking of starting a business while in college, it is a good option.

23. Participating in surveys can be one of the businesses to start in college

If you are eager to know which are the casual businesses to start in college, then participating in surveys is one of them. One of the good business ideas for college towns.

24. Entrepreneurship ideas for college students can be Laundry service

Laundry service can be one of the good entrepreneurship ideas for college students and a preferred business plan example for students.

25. Circulating flyers as one of the college students business ideas

You can circulate flyers or pamphlets to the targeted audience on behalf of companies and get paid; one of the best college students business ideas.

Also Read: Lactation Consultant | A comprehensive guide

26. Printing books and magazines can be one of the business ideas for students

One of the potential business ideas for students can be printing books and magazines for a firm. These activities are often outsourced and can be one of the small business ideas for students.

27. Business in college as a transcriptionist

You can take up a transcriptionist business in college and earn money. Services will include creating a script for capturing the meeting and speaker notes; one of the best project ideas for college students.

28. School business ideas for conducting travel trips

Conducting and arranging travel trips can be one of the good school business ideas. It can be ranked high in the list of entrepreneurship ideas for high school students.

29. Business ideas in schools for fashion modeling

If you are comfortable in front of the camera, then fashion modeling can be one of the best business ideas in schools. You can even think of starting a company in college; one of the entrepreneur ideas for highschool students.

30. Student run businesses as a market research consultant

Being a market research consultant is one of the creative small business ideas for students. It falls under the list of student run businesses and great college business ideas.

Also Read: Marketing Consultant | Everything you must know

31. Best products to sell to college students are gym equipment

Students who are fitness freaks but cannot afford to buy high-priced equipment can be targeted to start a college startup. Gym equipment is some of the best products to sell to college students.

32. New product idea for student to sell breakfast delicacies

A new product idea for students is to prepare breakfast delicacies and sell them to individual households or the food stores; one of the interesting entrepreneurial ideas for high school students.

33. Student website ideas can be creating a blog for demonstrating scientific experiments

Creating a blog and demonstrating various scientific experiments is one of the intellectual student website ideas. If you are thinking about how to start your own college business, this is a good opportunity.

34. Business ideas for high school students can be selling posters

Clicking exotic photographs and transforming them into posters is one of the creative business ideas for high school students and marketing plan ideas for college students.

35. DIY business ideas for students can be tailoring occupation

If you are confident in creating DIY objects for home decor, clothes, baby wardrobe accessories, then it is one of the best DIY business ideas for students. Can be ranked high among the college startup ideas.

Also Read: Business Strategy Consultant | A complete guide

Past trends from kid-focused business ideas 2020

The past trends from kid friendly business ideas or kid-focused business ideas 2020 have dealt mostly on the following as elaborated below:

Babysitting was considered as one of the entrepreneurial ideas for kids, especially when both the parents are working
Selling baby products was one of the school entrepreneurs day ideas
Create learning courses for kids was an inclusion in the list of business ideas for beginners
Designing rooms for babies was a way for starting a business for kids
Selling toys was an option on how to start a business at 11 years old
Running a creche for kids was also a trending student start up idea
A student idea for a business was renting baby furniture
A business set up for students was selling baby foods

Kuntala Banerjee

Materiality accounting – What is materiality accounting & 5 practical examples

Finance

New to the concept of Materiality accounting? Here, we cover the basics of materiality accounting, its significance and discuss 5 practical examples.

Materiality accounting

Materiality Accounting is a concept in the accounting standard, specifying the significance of the effect of certain data and facts in decision making; how the omission or inclusion of such information in the financial statements will impact the evaluation of past, present, and future events. The distinction of material vs immaterial is tough to decide since there is a very thin line of difference between them.

To resolve your dilemma, in this article we will discuss in detail the definition of materiality or what is materiality, the concept of materiality, the materiality accounting principle, and how to calculate materiality.

Also read: A guide to expanded accounting equation

Materiality Definition

Materiality definition or material items definition is elaborated in Chapter 3 Paragraphs QC6 to QC11 of the Conceptual Framework.

How does it define material accounting? Or What does materiality mean?

While auditing financial information, if it is evaluated that the omission, inclusion, or misstating of the information may impact decision making, then the information is considered to be material.

As per IASB (International Accounting Standards Board), materiality in accounting or material meaning is:

“Information is material if omitting, misstating or obscuring it could reasonably be expected to influence the decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.”

Also read: Fund accounting | A complete guide

Importance of materiality principle

The materiality principle is important to ensure that the financial statements are published displaying all the crucial information with no hidden facts. The companies must portray the right image of the accounting details to their stakeholders for developing mutual faith and trust. Furthermore, as per material principle definition, it reduces the reputation of the company, losing customers and hence revenue.

An investor’s decision to buy stocks or invest in a company depends highly on the financial statements and the information contained within them. This is what is defined by materiality accounting or accounting materiality principle.

Materiality concept as per AICPA

The Materiality Concept or material accounting definition as per AICPA states that (refer SAS No. 122; SAS No. 134; SAS No. 138 of Materiality Accounting or GAAP materiality):

Misstatements, including omissions, are considered to be material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
Judgments about materiality are made in light of surrounding circumstances and are affected by the size or nature of a misstatement or a combination of both.
Judgments about materiality involve both qualitative and quantitative considerations.
Judgments about matters that are material to users of the financial statements are based on a consideration of the common financial information needs of users as a group. The possible effect of misstatements on specific individual users, whose needs may vary widely, is not considered

AICPAs ASB(Auditing Standards Board) introduced amendments to the concept of materiality through SAS (Statement on Auditing Standards) No 138 and SSAE (Statement on Standards for Attestation Engagements) No 20. The current definition of the materiality concept in accounting is consistent with the definition stated by the International Accounting Standards Board (IASB) and International Auditing and Assurance Standards Board.

Also read: 10 Best accounting calculators and how to use of them

3 instances of using materiality auditing

Here are 3 instances of using materiality auditing or maternity accounting:

1. Non-Capitalization of Expenditures

Companies can charge expenditures to expense accounts like the cost of goods sold, delivery expense, rent expense, etc. These expenses are capitalized and depreciated over time. But certain expenditures are insignificant and capitalization of them to expenses may not create any impact on the financial book of records. They are immaterial as per the materiality accounting theory.

2. Applicability of Accounting Standards

All the norms and regulations mentioned in the Accounting standards (GAAP for the US) may not be impacting the financial statements. Following them may be immaterial. Hence an auditor or a finance controller may not apply those requirements in the company’s financial records.

3. Insignificant Transactions

During month-end, quarter-end, or year-end when a company’s books are closed, a reconciliation exercise is performed. The basic objective is to check whether all the transactions have been recorded and accounted for in the book of records. If not, adjustments are done through manual journal entries. If such entries are minor, can be ignored considering they have an immaterial impact on the financial records.

Also read: Accounting Ratios | All you need to know

5 Examples of audit materiality

What is materiality in audit?

In this section, we will discuss 5 examples of audit materiality that will help you to understand the concept of materiality accounting and the definition of materiality.

Example 1

A company that has net assets worth almost 10 Million USD, may owe a meagre amount of USD 500. Omission of such liability will have a minimal impact on the book of records.

Example 2

A company experiences loss in its assets due to weather hazards. The worth of loss reported was negotiated with the insurance service provider as USD 10K; whereas the net worth of the company is 10 Million USD. As per the definition of materiality in accounting, this loss is immaterial.

Example 3

A company recording the value of USD 20 of a waste bin as an expense instead of recording as an asset and depreciating it; thereby overriding the rules mentioned in the matching principle.

Example 4

Due to material accounting, the fuel expenses are now recorded as selling and distribution expenses and not as administration expenses

Example 5

A company with annual revenue of USD 500K will disclose a purchase of machinery worth USD 20K in the financial statements. Whereas some repair work of USD 100 need not be disclosed exclusively.

Also read: A complete guide to Public accounting

What is a materiality constraint?

A materiality constraint can be termed as a threshold limit to decide whether a business transaction, which is immaterial, needs to be recorded in the financial book of records. In other words, the transaction is decided to be material when it exceeds the materiality constraint. Else if it is below the threshold, the materiality accounting/ immaterial accounting concept holds true.

For example, A company decides to set the materiality constraint as USD 10K. Whenever an asset is purchased and its cost is below USD 10K, it is recorded as an expense in that month. Else it is recorded as an asset and depreciated accordingly.

What is materiality threshold?

A materiality Threshold is applicable for audits. It is the benchmark set to the auditors to determine whether any misstatement is large enough to impact the financial statements. In fact, it helps in earning reasonable assurance in an audit or limited assurance in a review. Auditors cannot check each and every individual business or financial transaction. Hence it is very essential to set a threshold in material accounting.

The materiality threshold is usually set as a certain percentage of a financial line item. Auditors check the amounts that are omitted or misstated vis-a-vis the threshold. If it exceeds then the transactions are considered to be material and need to be recorded as per the accounting standards else can be avoided.

Also read: 3 steps on how to setup a successful tax consulting business

How to determine materiality?

Well IASB does not specifically define a formula on how to determine materiality or calculate materiality, yet it has set some benchmarks or methods for materiality accounting. Single rule methods in audit materiality in accounting state 5% of pre-tax income, 0.5% of total assets, 1% of equity, and 1% of total revenue.

Sliding scale or variable-size methods states 2% to 5% of gross profit if less than USD 20K, 1% to 2% of gross profit if gross profit is more than USD 20K but less than USD 1 Million, 0.5% to 1% of gross profit if gross profit is more than USD 1 Million but less than USD 100 Million and 0.5% of gross profit if gross profit is more than USD 100 Million. It is good to use audit materiality calculation template for determining materiality.

What is material misstatement?

Material misstatement implies any information stated in the financial statements which is incorrect and which has a serious impact on the financial decisions and interpretations of a company. It creates a wrong picture of a company’s financial wealth and health within the stakeholders and investors.

Essentially, material misstatement definition states to leverage materiality accounting principle to inaccurately determine a transaction as material and misstating it in the book of records. This leads to serious implications on the financial position of the company and its extreme usage may lead to fraud.

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How is the materiality constraint as applied to bad debts?

Well answering to how the materiality constraint as applied to bad debts, if the bad debts are relatively small compared to the company’s revenue then they can be written off. You can set up a materiality constraint or threshold for determining when to write off the bad debts.

Accordingly, the particular amount, which is due from a customer, will be written off under bad debt expense. Besides, companies also use the allowance method for determining the bad debt expense at the end of the year i.e. the amount of money that won’t be collected.

FASB materiality and disclosure effectiveness

FASB has amended its existing chapter of the Conceptual Framework to align the definition of materiality accounting. The consistency in materiality definition accounting is to align with the U.S. Securities and Exchange Commission, the auditing standards of the Public Company Accounting Oversight Board and the American Institute of Certified Public Accountants, and the United States judicial system. Any information can be considered material if misstating or omitting it leads to serious impact on the financial information.

Kuntala Banerjee

Accounting Calculator | 10 Best accounting calculators and how to use of them

Accounting

Thinking of buying an accounting calculator but not sure which one? In this article, we discuss how to use an accounting calculator, which is the best calculator for accounting, where to buy a financial calculator and more.

Accounting calculator

An accounting calculator is a valuable device or software for Chartered Accountants and students undergoing accounting classes. Various financial calculations like profit margins, cash flows, expenses, interests, taxes, etc. are performed by an accounting or a financial calculator.

What is a financial calculator?

A financial calculator is designed and developed to perform certain mathematical and financial calculations that an ordinary calculator cannot. Unlike a basic calculator, it has specific standalone keys for financial functions like cash flow, interest (simple and compound) for faster calculations. Besides you can program and create additional financial functions required for the daily accounting activities. An accounting calculator can also graph certain financial calculations which are applicable for different industrial sectors.

Chartered Accountants are now hired in several diverse companies, and some are involved on a contractual basis. Accounting or business calculators aid them to perform complex calculations.

Also read: Recession proof businesses | A list of best business ideas

How are financial-calculators different?

Let us now try to understand the difference between financial-calculators and regular scientific calculators.

An accounting calculator can perform certain complex financial calculations like simple interest, compound interest, amortization, cash flow, gross profit margin, etc. These calculations cannot be performed by a regular calculator straightforward.
A financial calc has standalone keys available to perform direct financial calculations unlike regular calculators
A financial accounting calculator allows the programming of specific finance functions for storage and usage in future calculations. In regular calculators, you cannot program or create functions for accounting.

Also read: An ultimate guide to Fund Accounting

Top 15 Types of an accounting calculator

In this section, we will be elaborating on the 15 key types of an accounting calculator for your reference and guidance. Depending on your needs for daily accounting activities, you can leverage their extensive features for faster, and accurate calculations.

1. Net income calculator accounting

Net income is calculated by subtracting operating expenses, taxes, and interest from the gross profit. Calculating net income is one of the top uses of an accounting calculator. The calculation of each of the elements of the net income demands time and effort; hence an accounting calculator comes to the rescue.

2. CPA exam calculator

Students appearing for the CPA exam have to perform critical calculations such as unearned revenue, retained earnings, profit on the sale of inventory, and many others. A Financial CPA exam calculator is thus a must need for them, provided they do not program any functions or formulas into it. One of the best ways of using a financial calculator

3. Small business or office calculator

Preparing the financial statements like Profit and Loss, Balance Sheet is the common requirements at month-end, quarter-end, and year-end for a small business and in an office. An accounting calculator used for calculations related to liabilities, assets, revenue, receivables, etc. is referred to as the small business or office calculator.

4. Accounting profit calculator

In the finance world, accounting profit is calculated by subtracting the cost of goods sold, operating expenses, and taxes from the total revenue. An accounting profit calculator performs the functions with ease and is referred by a majority of the Chartered Accountants while preparing financial reports and balance sheets.

5. BA II plus amortization calculator

BA II plus amortization calculator from Texas Instruments is a powerful calculator to calculate amortizations. Amortizations are mainly used for mortgages and loans, wherein the periodic payments for a debt need to be calculated for a certain date.

Also read: How to set up a tax consulting business

6. Personal finance calculators

Personal finance involves managing your finance and wealth. You need to calculate your budget, income, expenses, insurance, mortgages, etc. for ensuring financial security and safety. Personal finance calculators serve the purpose and prove to be very effective in such calculations.

7. Average accounting return calculator

The accounting rate of return is calculated by dividing the average net profit by average investment. Such complex calculations require time and effort which can be easily resolved by using an average accounting return calculator. This helps in faster capital budgeting and forecasting decisions by an accountant.

8. Accounting problem solver

Accountants have to solve several challenges related to the financials and accounting domain of a company. Changes in the tax laws, cash flow calculations, analyzing and judging the financial well-being of the company, updating income and expenses at frequent intervals, etc. are the common ones. A basic financial calculator is the best accounting problem solver.

9. Accounting equation calculator

Accounting equations are the fundamental elements of a balance sheet and serve as the basic principles of accounting.

Assets = Liabilities + Shareholder’s Equity

The above is the basic equation and each element of the equation needs to be calculated. The financial calculator serves as the accounting equation calculator, aiding the process.

Also read: Expanded accounting equation | A complete guide

10. Business finance calculator

Business finance involves calculating bank loans, shareholder’s equity, taxes, and rent expenses mostly. Besides budgets, forecasts, equity, and debt financials are also some of the critical components of business finance. Hence a business finance calculator is very much useful.

11. Financially programmable 12 c calculator

A financially programmable 12 c calculator is a type of accounting calculator that is capable of critical financial calculations. The key ones being loan payments, interest rates, standard deviation, Net present value, Internal rate of return, cash flows, bonds, etc.

12. Simple financial calculators

Simple financial calculators are used to perform accounting calculations that are beyond basic arithmetic operations. The calculations involve present and future value, payments, and interest rate. They provide standalone keys to arrive at the numbers.

13. Similar figures calculator

A similar figures calculator is specifically used for performing mathematical operations on significant figures or numbers. Complex calculations using the figures are often a need from the accountants. The calculator will help to resolve the dilemma.

14. BCE calculator

Business and Computing Examinations (BCE) help accountants for gaining additional qualifications and knowledge beyond the regular accountancy exams. A BCE calculator will help in the examinations and is the best calculator for accounting students.

15. Accounting ratio calculator

Calculating financial ratios like debt ratio, debt to equity ratio, current ratio, quick ratio, return on equity, gross margin, return on assets, etc are the common calculations for an accountant. An accounting ratio calculator helps in performing such a wide range of calculations.

How to use a financial calculator?

In this section, we will discuss the different ways of using an accounting calculator. Accountants can refer to the sub-sections for quick guidance on the usage and leverage for their daily accounting activities.

1. Accountant calculator for financial ratios

An accountant calculator is best used for calculating and computing financial ratios. The prominent among them being the working capital ratio, earnings per share, debt-equity ratio, quick ratio, return on equity, and price-earnings ratio.

2. Professional calculators for budgets, forecasts, and cash flows

Professional calculators for accounting are used effectively for budgeting and forecasting. The inflow and outflow of cash are computed easily with accuracy through an accounting calculator. It’s a very efficient way to use a financial calculator.

3. Financial cal for personal wealth management

A financial cal proves to be very beneficial for personal wealth management. Financial planning, asset management, and investment management are some of the essential calculations and computations needed for individuals or private investors.

4. Business finances calculator

A Finances calculator for business has a wide variety of uses. Loans, mortgages, interests, stakeholder’s equity, and even budgets are the key constituents of business financing. Hence if financial function calculators aid in such calculators, it’s a boon.

5. Accounting calculators for financial reports

Accounting calculators are beneficial for computations for generating financial reports and statements. The key ones being the balance sheet, income statement, cash flow statement, and statement of shareholder’s equity.

Hope by now, you have understood how to use finance calculator.

Also read: A guide to Remote accounting jobs

Top 10 Best financial calculators

Here are the top 10 best financial calculators to pipe up your daily accounting activities and financial calculations. The list will help to understand the best adding machine for accountants and where to buy financial calculator

Texas Instrument BA II Plus is one of the best financial calculators. Basic and advanced mathematical calculations can be performed by the calculator like amortization on BA II Plus.
HP 12CP Financial Calculator is an accounting calculator that is dominating the market currently. The processing speed is quite high and has 120 in-built functions
Sharp QS-2130 Financial Calculator is powered by solar energy. It has all the standard functions but can perform complex mathematical calculations.
HP 12 Platinum has been in the market for almost 30 years now. It has light control features and is energy efficient. Allows storing custom programs with complex formulas. It is a cheap financial calculator
HP BII+ Financial Calculator has 170 functions and 22 memory registers. The lighting can be adjusted and has a high processing speed
3405 CE Calculator from Calculated Industries is available at an affordable price. It is mainly used for performing calculations related to real estate.
Casio FC-200V Financial Calculator is used mainly for calculating amortization and investment appraisal. It has a 12 digit 4 line display.
Sharp EL-738F Financial Calculator is calculator finance, used for advanced financial and business functions. It has 12 memories and 100 registrars.
3430 Qualifier Plus IIIFX from Calculated Industries is used specifically to calculate IRR, cash flows, and other calculations related to the real estate business.
Staples Calculators have a 12 digit display and is one of the preferred accounting calculators in the US. Financial calculator Staples is good in computing IRR, NPV, Cash flows, and so on

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Top 5 accounting calculators online

The top 5 accounting calculators online allowing easy mathematical and financial calculations are illustrated below. Each one has online learning guides for example how to make financial calculator show more decimals, how to program etc.

Desmos is an accounting calculator online. The user interface has several tabs and buttons for performing the calculations
Web2.0 Calc is an accountant calculator online, that can be operated with the keyboards and mouse buttons
Good Calculators is listed among the best download financial calculators and is essentially a project. It has more than 300 free and high functioning calculators for computing business and mathematical operations
Calculator-1 is an online accounting calculator that has functions to calculate basic and complex calculations
Symbolab is the best business calculator online with buttons and tabs for straightforward calculations

Top 5 accounting calculator app

In this section, we will discuss the top 5 accounting calculator app.

10bii is considered among the best financial calculator app category. It has 105 functions for financial, business, mathematical and statistical calculations
Financial Calculators by Bishinews is an accounting calculator app used for investment and complex financial calculations
Vicinno Financial Calculator is an app that supports calculations for bonds, amortization, bonus, depreciation, and other statistical analysis
Touch RPN is an accounting calculator app used for programming accounting functions
PowerOne financial calculator is ranked high as the best financial calculator app for computing investment and accounting calculations

Also read: A guide to starting a Small business consulting

5 Best accounting calculator brands for design and ruggedness

The 5 best accounting calculator brands best known for their design and ruggedness are listed below. The suggestion is to buy financial calculators for sale from popular stores

HP 12C Platinum Accounting Calculator is elegant in design and with high durability. It has excellent battery life. The accounting calculator from HP has 130 built-in functions.
Texas Instruments BAII Plus Accounting Calculator has a 10 digit display. It has inbuilt memory for programming and storing the accounting functions
Casio DM-1200BM Accounting Calculator has good review ratings. It has a 12 digit extra-large display with independent memory
Canon HS-1200TS is one of the best accounting calculator brands. It has a 12-inch liquid crystal display with an ergonomic design
Helect H1006 is the best buy financial calculator with a large 12-digit display and an attractive model

Kuntala Banerjee

10 Recession proof businesses that have stood strong for over a century

Businesses

Searching ideas for recession proof businesses? In this post, we cover top 10 businesses that have survived the ups and downs of the market.

Recession proof businesses

Recession proof businesses are organizations that are not impacted by the slowdown in the economy. These types of businesses are needed by the people and hence do not experience a financial downfall.

Want to know more about such businesses or recession definition business?

In this article, we will discuss recession proof business ideas, how to profit from the next recession, the best jobs during recession or who made money during the recession, and recession proof careers.

Also Read: IT Consultant | Critical items that you must know!

List of US recessions

The US has suffered about 48 recessions in the past; the US recessions are highlighted below:

Great Depression (Aug 1929 till Mar 1933)
The recession from May 1937 till June 1938
Recession of 1945, 1949, 1953, 1958
The recession of 1960 till 1961
The recession of 1969 till 1970
The recession of 1973 till 1975
The recession of 1980, the 1990s, 2000s
Great recession (Dec 2007 till Jan 2009)

What are recession proof industries?

What industry did not suffer during the great depression?

Here are the top key recession proof industries and surviving businesses during the great depression:

Healthcare Industries
Utility Industry
Financial Advisory Services Industry
Education Industry
FMCG or Fast Moving Consumer Goods Industry

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Top 15 recession proof businesses

Who made money during the great depression or other economic recessions?

To answer the question, in this section we will discuss in detail the top recession proof businesses. Professionals can target these industries that do well in recession, to build up their careers.

1. The best industry to start a business is Food and Beverage

Foods and drinks are a necessity for all. Hence the best industry to start a business and is one of the safest recession proof businesses. Grocery stores, drug stores, door-to-door food delivery, convenience stores, fast food stores, and vending machine businesses are some of the industries that do well in a recession and prevent recessional unemployment.

2. During recessions investment in Healthcare Services is a boon

Healthcare services are in constant demand. Elderly people, kids, people with chronic illnesses, regular medical check-ups, and other common ailments demand the services of doctors, nurses, and other healthcare workers. Hence during recessions investment in Healthcare services is a boon and a free of business recession.

3. How to profit from a recession – invest in Baby Products

People seldom compromise on products required for their babies. So if you are thinking about how to profit from a recession then invest in baby products. It is one of the preferred recession businesses and one of the safest businesses to start.

4. Preparing for economic collapse by investing in Financial and Accounting Services

If you are thinking of starting a business and preparing for economic collapse, invest in Financial and Accounting Services. The services are needed to control wealth and financial security and hence listed as one of the preferred industries that do well in a recession.

5. How to make money in a recession in freelance content writing

If you are wondering how to make money in a recession in freelance content writing; remember writing is less affected by economic downfall. The majority of the companies prefer outsourcing their content to firms specializing in writing quality content.

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6. Recession proof career in pet care business

For a recession proof career, it is good to invest in the pet care business. Seldom a compromise is made in veterinary services, grooming services, and pet products; the reason being considered as one of the recession proof small businesses.

7. Recession resistant industries involve cleaning services companies

Cleaning services are a must for the majority of households, public places, or firms. It is considered important in the list of recession resistant industries. Hospitals, shopping centers, restaurants, beauty salons, and several recreational facilities hire specialized services to keep their environment clean.

8. Recession proof sectors involve Beauty companies

Beauty companies are considered among the list of recession proof sectors. Manicure parlors, beauty salons, hair salons never face a dearth of customers even during the economic recession; considered as a recession proof business idea.

9. Businesses that make money during a recession are Educational institutions

Education is a necessity. Starting from kindergarten, junior school, middle school, high school, and to colleges, academic institutions are never compromised. It’s one of the businesses that make money during a recession and is listed among the recession proof business ideas.

10. Digital Marketing is a recession proof business

Digital marketing is on the rapid rise and a recession proof business. SEO, SEM, email marketing, and social media promotions and campaigns are targeted by companies. The sector consists of companies that thrived during the recession in the past.

Also Read: Social Media Consultant | A comprehensive guide

11. Home care and cleaning essentials are recession proof products

Other than the recession proof business ideas, it is good to understand that home care and cleaning essentials are recession proof products. Companies that did well during the recession in the past had been selling home care and cleaning products.

5 Recession Proof Jobs

What are the best jobs during recession? Or How to make money during a recession?

Listing the 5 recession proof jobs or the recession proof businesses:

Risk Analyst – Analysing data and information to identify risks and mitigating the same are the jobs of a risk analyst.
Cybersecurity Professional – Cybersecurity professionals aid the companies in tracking vulnerabilities and fix the same; hence a necessity for many
AI Specialist – With digital innovations on the rise, being an AI specialist is one of the best recession proof jobs to be engaged in.
Medical Professional – Healthcare and medical facilities are always in demand. The services of a medical professional are one of the jobs that are recession proof.
Law enforcement officer – Ensuring safety and security is a need in every single city in the world. A law enforcement officer is thus always in high demand.

Also Read: Security Consultant | Everything you must know

5 Recession Proof Careers in services sector

How to survive the next great depression?

Here are the key recession proof careers in services sector to help you:

Public Utility – One of the reliable recession proof businesses providing stability in job security. It includes services related to gas, electricity, water, etc.
Funeral Services – A person’s journey to heaven is devoid of all the materialistic world. Hence organizing funeral services can be an option to take up as one of the recession proof careers.
Public Safety – Ambulance drivers, firefighters, and police officers are always in demand in any place; thus included in the list five recession proof careers.
Grocery store owner – The demand for groceries falls under necessity. Hence a grocery store owner is one of the best recession proof careers to opt for.
Senior Care – Homecare for old people is a continual demand and never affected by the recession.

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5 Recession Proof Investments

How to make money in the next recession? or What are the best investments during recession?

In this section we will focus on recession proof investments to think of:

Healthcare business – Healthcare industry is one of the recession proof businesses.
Real Estate – People look for a secure and reliable housing option during recessions. Investment in real estate is a recession proof investment.
Gold and Silver – Reliable assets to invest since their value never decreases in the stock market; one of the reliable recession proof investments.
Consumer staples – Essential consumer staples never fall in demand; one of the safest recession proof investing options
Service and Repair companies – The majority of households are bent on fixing their existing assets and utilities. Hence service and repair companies are the best investments for recession

Also Read: Healthcare Consultant | Critical items that you must know!

5 stocks that do well in a recession

Detailed below are 5 stocks that do well in a recession:

High Dividend stocks – They do well in a recession as the potential for return is higher compared to other stocks.
Technology Stocks – Vital when people are working from home or in remote locations. The demand for technology is growing; one of the recession proof businesses.
Pharmaceutical Stocks – One of the reliable stocks that do well in a recession. People need medication even during a recession.
High Yield Savings Account – Yielding a certain percentage more than a normal savings account, it is reliable; one of the safest stocks that do well in a recession.
Utility Stocks – Utility stocks always pay consistent dividends even during a recession.

Also Read: Tax Consultant | A how-to guide for everyone

5 recession proof jobs 2020

Let’s now try to understand the 5 recession proof jobs 2020 was good for:

IT Professionals – IT support is a necessity and is in continuous demand; one of the recession proof jobs 2020. Troubleshooting of IT issues, laptop and desktop repair had been in demand in 2020 and will continue in the future.
Accountants – Financial accounting and tax services are one of the recession proof businesses; that had been in 2020 and also in the current situation.
Federal government employees – Federal jobs like military, civil services have been less impacted by the recession in 2020 and hence secure and reliable.
School teachers and college professors – Education continued in 2020 even it was in online mode. Classes continued in the recession phase too. Thus the demand for school teachers and college professors continued.
Delivery and courier services – With more and more shifting into online buying, delivery and courier services increased in demand in 2020.

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Remember, it is advisable to avoid selecting industries most affected by recession in your career goal.

Kuntala Banerjee