Account Receivable

What is Going Concerned? Definition, Assessment, Indicators, Example, Disclosure

Accounting Principle, Audit, Financial Accounting

Definition: In accounting, going concerned is the concept that the entity’s Financial Statements are prepared based on the assumption that the entity operation is still operating normally in the next foreseeable period. This foreseeable period normally has twelve months from the ending period of Financial Statements. In order to assume that the entity has no […]

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What Are the Purposes of Budgeting?

Budgeting, Managerial Accounting

Budgeting is the tool that most business entities use to link the current performance of that business entity to their strategic objective. The entity breaks its long-term goal, like in ten years or is the market leader, into a short-term objective, called a budget. What is Budgeting in Accounting? In accounting, budgeting refers to planning

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A Beginner’s Guide to Double-entry Accounting

Financial Accounting

Double-entry accounting means at least two entries for every accounting transaction. The practice leads to the balancing act of debits and credits. The double-entry system follows the principle of the basic accounting equation. It leads to the accuracy accounting function where all debits and credits must equal at any given time. There are several types

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What is Ledger Account? – Definition, Types, and Examples

Financial Accounting

Overview Ledger accounts are the accounting units that present the summarized balances of transactions under each category. A general ledger is the collection of these ledger accounts. A business can have five types of ledger accounts: assets, liabilities, equity, revenue, and expense. Let us discuss the definition and types of ledger accounts with the help

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IASB’s Conceptual Framework – Explained

Financial Accounting

Overview: The main objective of the conceptual framework is to provide the concept, principle, and deal with the objective and qualitative characteristics of financial statements, complete definition, the guidance of measurement, and recognition of the five main elements of Financial Statements. The concept of capital and capital maintenance are also dealt with in the framework. The

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3 Types of Business Entities (Definition and Explanation)

Business Strategy, Financial Accounting

Overview: Before looking into the detail of the types of business entities, we would like to introduce the definition of business. Business is the trading activities of one person, a group of persons, commodities, and organizations in which the purpose of those activities is for generating profit directly or indirectly. Business is whatever size or

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Top 4 Purposes of Financial Statements: Why are They Required

Financial Accounting

Purposes of Financial Statements: The main purpose of financial statements is to provide information about an entity, including, but not limited to, Financial Performance, Financial Position, Profit or Loss, Nature of Business, Assets, Liabilities, and Equity Such information is very important for users to assess the entity’s status to support their decision-making. Before explaining the

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Defined Contribution Plan and Defined Benefit Plan: Explained

Financial Accounting

Overview As an employee, one might be eligible for at least one of the two types of pension plans. Defined contribution plans and defined benefits are both types of pension plans. Both of the pension plan categories are employee-sponsored, and employees are eligible for it upon retirement. A defined benefit plan is traditionally known as

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Financial Controller: Overview, Qualification, Role, and Responsibilities

Financial Accounting

Overview: Financial Controller is generally referred to as the high-level executive person who oversees the Finance Department and other senior executives, including Finance Director or sometimes CFO, Finance Manager, and other executives. There are many roles and responsibilities that the Financial Controller has, but here is the main important task they normally perform: Oversee financial

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Financial Management: Overview and Role and Responsibilities

Financial Accounting

Financial management deals with the ways in which an organization can raise funds for the various projects, allocation of those funds in the most productive and efficient way, how to exercise control over those funds, and how to distribute the returns of those funds to the various stakeholders. It generally deals with planning, controlling, organizing,

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