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 […]
Capital Leases – Accounting Treatment and Example Read More »
Introduction: Working capital is the amount of a company’s current assets less current liabilities. This capital of a business is required to fulfill the daily trading operation of a business. Net working capital is normally positive when total current liabilities are less than total current assets. Negative working capital occurs when the current liabilities exceed
Why is Working Capital Negative? (Explanation With Example) Read More »
Accounting and finance are indeed competitive fields with different career options and good annual packages. Finance professionals and accountants can also set up independent firms or work as freelancers to grow their multiple income streams and increase their wealth. That’s why more and more students are eager to join the accounting field besides computer and
How Difficult is an Accounting-related Job? Is It Really Stressing? Read More »
If you are a professional accountant, CPA, CFA, or mortgage broker, you will have to spend most of your time doing calculations, analyses, and computations. The calculations’ complexities might differ for each professional, but the need is almost identical. However, it will be unjustified if a professional at such a level is not provided with
7 Best Calculator For CPA, CFA, And Accountants Read More »
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
What is Meant by Credited to Your Account? Read More »
Have you just graduated high school and are curious about your future career path? Well, many people would be telling you to join any of the STEM majors. And if you have an interest in Finance and Accounting, the question if these subjects are STEM majors or not might be bothering you. Right? Accounting and
Are Accounting and Finance a STEM Degree? Read More »
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
Is Prepaid Rent a Current Asset? (Is It Debit or Credit) Read More »
The purpose of accounting in any business entity is to properly record the financial transactions, classify them, and present them as useful information in financial statements and analysis. However, the financial statements and analysis can only be useful and fair if the recording and classification process of economic events and transactions has been done accurately.
What Is the Difference Between Adjusting Entries And Correcting Entries? Read More »
The primary purpose of any business entity is to make a profit through revenue generation activities. Therefore, they perform different operations like manufacturing & trading of goods or provision of services. In general, revenue is defined as the earnings of any business entity from normal business operations that can provide services or sell goods. However,
Is Service Revenue a Debit or Credit? Read More »
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
Bank Overdraft: Journal Entry and Example Read More »