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HOW TO PREPARE A BANK RECONCILIATION STEP BY STEP?

Bank reconciliations are made by a business to reconcile any differences between the bank statement of a business and its bank books. These differences can exist due to many reasons. Bank reconciliations are used to identify any errors or attempts at fraud. Bank...

HOW TO PREPARE PRO FORMA FINANCIAL STATEMENTS STEP BY STEP?

Pro forma financial statements are projected financial statements that are produced using several presumptions or projections. The business preparing the pro forma financial statements make some presumptions and prepare projected financial statements based on those...

WHAT IS ACCOUNTANCY?

In the past, accountancy used to refer to the process of communicating information about the financial position and performance of a business to its owners. This communication was usually made in the form of financial statements such as the balance sheet and the...

Capitalization of Profits

Any business is run by finances, there are two ways a company can finance its operation. Either through debt finance or equity finance. Debt financiers look for mortgages against their cash and seek a return on it, the cost associated with debt financing is higher....

The difference between gross and net income

Income is any inflow of economic benefits. The term “Economic benefits” means any benefits that can be quantified in terms of money. Businesses generate income through various means. Usually, income is generated through the sale of goods or services. Income generated...

RULE OF DEBIT AND CREDIT IN ACCOUNTING

Accounting can be defined as the recording, summarizing, analyzing, classifying, presenting, and reporting of financial information. The financial information is mainly obtained when business transactions take place. Once financial information about business...

What are the auditor’s liabilities?

Introduction Over the last two decades, the auditing profession has suffered from various scandals such as Enron and other high-profile audit scam settlements. The involvement in PwC in the Satyam scandal has brought it to its knees in an operational environment in...

Job Description of an Auditor

Introduction The role of the auditor when it comes to giving an opinion regarding the financial well-being of the organization is tantamount. This is primarily because of the reason that numerous different stakeholders are supposed to rely on the report that is...

What is the auditor’s letter of consent?

The Auditor’s letter of consent is the letter that is prepared by the client or management and communicated to the previous or current Auditor (the outgoing) to inform them about the changing of the Auditor of their company. This letter is to allow them to provide the...