Financial Accounting

Financial Accounting involve recording financial data and preparing financial statements of entity based on accounting standards or reporting frameworks.

  • Types of Financial Statements
  • Element of Financial Statements
  • Balance Sheet
  • Income Statement
  • Accounting principle
  • Assets
  • Liabilities
  • Retained Earning
  • Trial Balance
  • Financial Statements Analysis
  • And others importance topics related to auditing

How to Account for Liabilities? Definition, Example, Measurement, and More

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 …

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What Is a Master Budget? Definition, Purposes, Usages, and More

Budgeting

A master budget is a comprehensive financial plan that outlines a company’s projected income and expenses for a specific period, usually a year. It is an essential tool for businesses to manage their finances effectively, make informed decisions, and achieve their long-term goals. Definition: A master budget is a detailed financial plan that includes projections …

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How to Account for Uncollectible Accounts? Step by Step Guidance with Example

Financial Accounting

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 …

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How to Account for Discontinued Operations on an Income Statement?

Financial Accounting

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 …

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How To Calculate Cash Coverage Ratio? (Formula and Example)

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 …

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Rule of Debit and Credit in Accounting for Beginner (Ultimate Guide)

Financial Accounting

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 …

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What Are the Variable Costs? – Definition, Formula, Example, And More

Cost of goods sold

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 …

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