What Are Dividends? Dividends are a share in a company’s profits paid to shareholders. These payments may come directly from its profits during a year or from retained earnings. Usually, dividends come in the form of cash. But it may also cover share distribution or other benefits. Regardless of how investors get paid, dividends include …
Does a Dividend Reduce Profit? (The answer is “No”) Read More »
No business entity operates without having credit purchases and credit sales. Credit purchases and credit sales give rise to account payables and account receivables. Both accounts are recorded on the balance sheet of the business entity and are integral to the business operations. Account receivables(AR) and account payables(AP) are significant for internal accounting and external …
Accounts Receivable Vs. Accounts Payable: What are the Key Different? Read More »
Definition: Notes receivables describe promissory notes that represent loans paid from a company or business to another party. The note comes with a promise from the borrower that it will repay the lender in the future. Similarly, a note receivable gives the holder, or the lender, the right to receive the amount from the borrower. …
What is a Note Receivable? (Definition, Explanation, and Journal entry) Read More »
Accounting can be defined as the recording, summarizing, analyzing, classifying, presenting, and reporting of financial information. Financial information is mainly obtained when business transactions take place. Once financial information about business transactions is obtained, it is entered into the accounting system, mainly the general ledgers of a business. At the end of every period, this …
Rull of Debit and Credit in Accounting for Beginner (Ultimate Guide) Read More »
Definition: A variable cost is a direct cost that the total costs or expenses change when the total volume of goods and services that the company produces. A company’s total variable cost increases and decreases with the amount of production, but the variable cost per unit is not changing. If production goes up, variable costs …
What Are the Variable Costs? – Definition, Formula, Example, And More Read More »
Under the Generally Accepted Accounting Principles(GAAP) and Financial Accounting Standards Board(FASB), leases are treated as a special liability. In general, the lease is a rental agreement between two parties. The lessor gives the lessee right to use a certain property or asset for a specific period. The lessee, in return, has to pay rental payments …
Capital Leases – Accounting Treatment and Example Read More »
Introduction: Working capital is the amount of a company’s current assets less current liabilities. This capital of a business is required to fulfill the daily trading operation of a business. Net working capital is normally positive when total current liabilities are less than total current assets. Negative working capital occurs when the current liabilities exceed …
Why is Working Capital Negative? (Explanation With Example) Read More »
Accounting and finance are indeed competitive fields with different career options and good annual packages. Finance professionals and accountants can also set up independent firms or work as freelancers to grow their multiple income streams and increase their wealth. That’s why more and more students are eager to join the accounting field besides computer and …
How Difficult is an Accounting-related Job? Is It Really Stressing? Read More »
If you are a professional accountant, CPA, CFA, or mortgage broker, you will have to spend most of your time doing calculations, analyses, and computations. The calculations’ complexities might differ for each professional, but the need is almost identical. However, it will be unjustified if a professional at such a level is not provided with …
Individuals and businesses must follow accounting procedures and regulations to report expenses, revenues, assets, liabilities, contingencies, etc. However, when you are just starting to understand accounting and financial reporting, the rules of debit and credit can be very confusing. Yet another confusion that exists is the difference between double-entry, single-entry, GAAP, IFRS, etc. It might …
