Financial Accounting

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 […]

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

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 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 revenues

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

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

Most companies exist to profit from their activities. These activities may differ from one company to another. On top of that, even investors prefer to invest in companies that illustrate growing profits. In most cases, the net income generated by a company plays a role in how it fares in its operations. However, profits aren’t

Companies rely on their accounting function to record and report transactions accurately. This function provides the base for the company to prepare financial statements. Initially, the process starts when a financial transaction occurs. The accounting function processes that transaction and records it in the books. Usually, this process happens through an automated system. All financial