Financial Accounting

Definition: Liabilities are obligations that an individual or a company owes to others. These obligations arise from past transactions or events, and their settlement usually requires transferring economic resources such as cash, goods, or services. Liabilities represent a claim against a company’s assets and must be settled at some point in the future. Nature: Depending […]

When a company sells goods or services on credit, there is always a risk that some customers will not pay their bills. As a result, companies need to account for the possibility of uncollectible accounts, which are also known as bad debts. Accounting for uncollectible accounts involves estimating the amount of uncollectible accounts and creating

Discontinued Operations are parts of a business that have been sold, disposed of, or abandoned and are no longer considered a part of the company’s ongoing operations. These operations are reported separately in the financial statements due to the significant impact they can have on a company’s financial results. Why do Discontinued Operations matter? Discontinued

Companies use two forms of finance to fund their operations. These include equity and debt finance. Equity finance is straightforward and comes from the company’s shareholders. Usually, this finance does not carry any interest. However, companies have to pay dividends to shareholders. However, these dividends are only applicable when the company is profitable. When it

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