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 […]

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

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

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