Account Receivable

Working Capital Ultimate Guide: Definition, Calculation, Example, and More

Definition: Working capital is a term commonly used for the capital required for day-to-day working in a business entity, purchasing raw materials to be used in production, and meeting daily expenditures like salaries, wages, advertising, etc. It is also popularly called circulating capital due to its nature, which keeps changing. Working capital depicts those assets […]

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How Do Cash Dividends Impact Financial Statements?

Dividends, Financial Statements

Cash Dividends: Cash dividends are declared by the board of directors “BOD” and paid to the stockholders or shareholders of the company. The BOD normally approves to pay the cash dividend at an annual general meeting of the company. It is the distribution of a part of the company’s retained earnings for the year. The

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How Do Cash Dividends Affect the Statement of Cash Flow?

Dividends, Financial Statements

The dividend is the total amount of money issued paid by the company to its shareholders from their profit. At the end of every financial year, every company announces calculate their profit & loss on the basis of transactions that occur during the year. If the company earns some profit during the year, then the

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Budgeted Cash Flow Statement – How to prepare it?

Budgeting, Financial Statements, Statement of Cash Flows

Introduction: Managing the cash flow of your business by budgeting is an important technique that you can adopt instead of spending a hectic time counting and remembering where all the money came from and went to. The cash budget allows you to estimate all your revenues and expenses beforehand and works as a guideline to

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Budgeted Balance Sheet: What Is It? And How Does It Work?

Balance Sheet, Budgeting

Balance sheet: A balance sheet is a financial statement that is prepared annually at the end of each accounting period reporting the levels of assets, liabilities, and equity that the company owns at that time. It is also called a statement of financial position as it is reporting the company’s position in the financial term.

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Why is allowance for doubtful debt accounts necessary?

Account Receivable

Introduction: When a company has a policy of selling goods on credit, a lot of times customers end up not paying the amount they owe to the company. This expense is referred to as a bad debt expense and its treatment and reporting on the financial statements is a bit raveling. The International Accounting Standards

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What is the allowance for doubtful debts account?

Account Receivable

Revenue: Revenue also referred to as sales or turnover is the total amount of income that a business has earned through the sale of goods or services to the public. According to the matching principle and accrual system of accounting, revenue is recognized or the sale is made when the revenue is earned i.e. earlier

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The direct write off method and its example

Account Receivable

Bad debt expense: Bad debt expense or doubtful debt expense is an operating expense related to the accounts receivable of the company. It normally happens when the credit customers could not pay off the receivable, then the company already tries their best to recover, yet it could not get any positive results. Then the company

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The difference between bad debt and doubtful debt

Account Receivable

Revenue recognition: According to IFRS 15, revenue should be recognized when the following criteria are met: When all the risks and rewards associated with the product have been transferred from the seller to the buyer. Control over the goods is transferred to the buyer. The amount of revenue can be reasonably measured. The collection of

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Is Allowance for Doubtful Debit Credit or Debit?

Account Receivable

What is a doubtful debt? When a credit customer is expected to go bankrupt or has an unreliable profile, chances are he is going to not pay the amount he owes to us. Such accounts receivable are referred to as doubtful debts or uncollectible invoices. Even though the customer owes us money, we book an

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Financial Accounting