Financial Accounting involve recording financial data and preparing financial statements of entity based on accounting standards or reporting frameworks.
The accrual accounting system is the most prevalent method of accounting used by small businesses and large corporations. The method implies that the expenses and revenues should be made part of the income statement only in the financial year they are incurred or earned. It means that cash payment or receipt of the expenses and …
The purpose of accounting in any business entity is to properly record the financial transactions, classify them, and present them as useful information in financial statements and analysis. However, the financial statements and analysis can only be useful and fair if the recording and classification process of economic events and transactions has been done accurately. …
What Is the Difference Between Adjusting Entries And Correcting Entries? Read More »
The primary purpose of any business entity is to make a profit through revenue generation activities. Therefore, they perform different operations like manufacturing & trading of goods or provision of services. In general, revenue is defined as the earnings of any business entity from normal business operations that can provide services or sell goods. However, …
Almost all of us have faced a situation when the bills are due and the incomes have not come around yet. Bank overdraft is ideal in such situations, It is one of the most common sources of short-term financing, especially for small and medium enterprises (SMEs) with fluctuating financial requirements. It works as a backup …
Business entities own different assets that are used for operations and revenue generations. Some assets are consumed within one accounting period, while others last for more than one accounting period. The short-term assets used within one year are not recorded in the company’s balance sheet. Instead, they are recorded as the expense of the company. …
Which Depreciation Method is Most Frequently Used in Businesses Today? Read More »
The choice of your university degree is probably the most significant and critical decision related to your future and professional life. Many students believe that a master’s with a major in science is what they need to have an ideal professional life. While many others believe that skills over degrees matter to make you a …
Every individual establishes a different set of expectations and ideals when they choose a field or career path to pursue. Career counselors and experts often recommend choosing a field that is a passion of an individual as well as enough paying to have a decent living. On the other hand, some people believe that you …
Investors include various asset classes as a part of their investment portfolios. They may consist of a mix of equity and debt instruments. On top of that, they may also want to expand their selection beyond the traditional investment options. In that case, they can consider alternative investments. They may consider various factors while building …
Accounting for Equity Securities: Explanation, Journal Entry, and Example Read More »
Companies prepare financial statements to report their financial position and performance after every period. This period may differ from one company to another. On top of that, the interval for which they report those activities may also vary. For example, companies can prepare those statements monthly, quarterly or annually. However, they must use the same …
Adjusted Vs. Unadjusted Cost of Goods Sold: What are the differences? Read More »
Companies earn revenues from their operations. However, they must also incur expenses to generate sales. The difference between both these represents the profit or income for a company. Another term used to describe this income or earnings is profits. Companies measure these profits at regular intervals to establish the profitability of their operations. In some …
What is After Tax Operating Income (ATOI) And How to Calculate It Read More »
