Financial Accounting

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 […]

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.

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

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

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,

Most companies exist to profit from their operations. These profits come when the total income for a company exceeds its expenses for a period. Usually, the higher the income and lower the expenses are, the more earnings it will generate. Companies use these profits to fund their operations and pay their equity holders for their

In accounting, financial transactions are the essence of the whole process. These usually occur when a company deals with other parties with a monetary impact. In other words, a financial transaction is an event that has an amount attached to it. For most companies, these events occur through cash or in credit. The latter comes

The balance sheet includes three critical components. These are assets, equity, and liabilities. In accounting, each of these represents a different category of balances. Companies must identify any accounts that meet the definition for these components. Once they do so, they must classify those accounts under the relevant heading. In the end, the total balance

In accounting, a liability represents an obligation that companies accumulate due to past events. Similarly, it results in an outflow of economic benefits during a future period. In simpler words, liability is any amount owed to third parties that companies must settle. This settlement can occur any time in the future. Based on the terms

In business, security is highly crucial in avoiding unwanted risks. This security may come in many forms. In some cases, it may also include assets as collateral between two parties. Security may consist of payments to another party in advance. For example, prepaid expenses or advances constitute a type of security. Sometimes, this security may