Definition: The Balance Sheet, also known as the Statement of Financial Position, is one of the five essential Financial Statements that provide crucial financial information about an entity at the end of the balance sheet date. The Balance Sheet presents three key pieces of information, including Assets, Liabilities, and Equity. It is typically presented in […]
Cost Of Goods Sold (COGS) represents all the direct costs of the products manufactured and sold by a business. For most manufacturing businesses, the COGS will consist of material and labor costs that contribute directly to the value of a product. COGS will, however, exclude any indirect costs. Indirect costs are costs that don’t directly
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Companies commonly arrange a condensed financial statement along with the customary financial statements. The core groundwork on these documents serves various legal commitments and is usually associated with an episodic audit. Nevertheless, except for substituting comprehensive financial statements, condensed financial statements turn out to be the additional documents or authentic supplementary papers essential during the
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Accounting is a process within companies to identify, analyze, summarize, record, and present financial transactions. This process involves an accountant obtaining data from various business transactions. Once they have the required data, they can start inputting it into a company’s financial systems. Most modern accounting systems process the data and prepare the result automatically. Accounting
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There are three concrete parts to the Balance sheet. The parts comprise assets, liabilities, and Equity. These three parts are also based on the accounting equation is: Shareholder’s Equity = Assets – Liabilities In simple words, the primary difference is that equity is the investors’ resources in the company, and assets are that of the
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Definition: Unadjusted trial balance is the list of the general ledger accounts balance (balance sheet’s items and income statement’s items) for the specific accounting period before making any adjustment. In other words, before proceeding with an adjustment. This statement is usually prepared in four columns. When the accountant or auditor reviews the accounting records, the
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The financial statements of any business entity give insights into any business entity’s financial health and performance. However, a business entity might need to perform further analysis to deeply evaluate the financial results. Therefore, companies perform different financial analyses. The popular type of analysis is sensitivity analysis, vertical & horizontal analysis, ratio analysis, growth rates,
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The financial statements of a company tell about different aspects of the business. Financial health, future growth prospects, underlying problems, expenses, revenues, liabilities, and assets are shown in income statements and balance sheets. Income taxes and sales taxes are critical elements of a company’s financial calculations, valuation, and operations. Income taxes are payments a business
The balance sheet is a financial statement that reports various account balances. Companies may combine several items under a single name or report them separately. Nonetheless, they accumulate those accounts to offer a financial picture of operations. The balance sheet is the only financial statement that presents those balances. Similarly, it does not report the
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Companies obtain finance from various sources. Usually, this finance comes from equity holders, which constitutes equity finance. This finance is perpetual and can be crucial in helping companies start their operations as startups. However, as companies progress, they have more options available in meeting their financing needs. The other finance source that companies can choose
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