Financial Accounting

Companies earn revenues from their operations. However, they must also incur expenses to generate sales. The difference between both these represents the profit or income for a company. Another term used to describe this income or earnings is profits. Companies measure these profits at regular intervals to establish the profitability of their operations. In some …

What is After Tax Operating Income (ATOI) And How to Calculate It Read More »

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 …

How to Record the Journal Entry of a Cash Deposit? Read More »

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 …

Subledger Vs. General Ledger: What Are the Key Differences? Read More »

The global market has opened up many opportunities for investors to invest in securities from various markets. Despite that, many investors suffer to make an impact on their finances. Even without the global market, local investors find it challenging to profit from their investments. One of the most crucial issues has been the lack of …

Why is Accounting Considered and Called the Language of Business? Read More »

Stakeholders are parties that hold an interest in a company and its operations. Usually, these include individuals or other entities that deal with the company regularly. On top of that, it may also consist of parties that fall under the impact of its operations. Stakeholders keep a close eye on how a company operates and …

Why is Annual Reports Important for Investors? And 5 Ways Investors Could Find the Annual Reports Read More »

Investors diversify their portfolios to ensure their investments are safe. This process involves selecting and investing in several asset classes. Usually, investors prefer two types of assets. These include stock and debt. Both of these come with specific benefits. However, they are riskier investments as they increase the portfolio risks. Investors also prefer alternative investments. …

What are Operating Expenses in Real Estate? Read More »

The income statement is a financial statement that reports a company’s performance for a period. It is one of the most favorite reports for investors. Usually, it presents the profits or losses a company makes during a period. The income statement also reports on activity through income and expenses. These items are crucial in helping …

What are Other Operating Expenses? (Explained) Read More »

Companies use various techniques to increase their revenues. One of the most reliable ways to achieve it includes offering credit purchases. Usually, companies prefer to receive cash for their sales. This process reduces the time for companies to complete their operational cycle. However, some customers may not have money readily available. These customers may request …

Is Bad Debt Expense Part of Operating Expenses or Cost of Goods Sold? Read More »

Many companies have gone digital and moved their operations online. However, most companies still need physical space to allow interactions between workers. On top of that, companies need to have a location for other needs. Companies use properties and buildings to establish this location. This space may come under a lease or rental agreement. Sometimes, …

Are Mortgage Current Liabilities or Non-Current Liabilities? Read More »