As a shareholder or a potential company investor, it is essential to know how a balance sheet works, and how it is organized, analyzed, and read. To read your balance sheet, you need to evaluate your company’s assets, liabilities, and equity to better view what your company holds and owns at any time. Whether you’re …
The Balance Sheet is considered one of the companies’ primitive sources of decision-making. This is primarily because it enlists all the details that help stakeholders reflect on the company’s financial position. In this regard, assets tend to be elementary classes because they tell the value of recoverable amounts from various financial statements. Assets can be …
Understanding Trade Receivables and Other Receivables in Balance Sheet Read More »
Overview Accrual-based accounting is used across all organizations today to apply the matching principle of accounting. This is mainly done to match the revenues for a particular period with the subsequent expenses covered in the given time frame. This helps to capture the company’s profitability, over the given course of time, with much-needed accuracy. During …
Understanding Prepaid Expenses in the Balance Sheet Read More »
Definition of Cash and Cash Equivalents Cash and Cash Equivalents mainly refer to the line items on the Balance Sheet that represent the underlying value of the company’s assets that are in the form of cash or any other liquid form of cash. They mainly include a couple of support, which have relative ease with …
Understanding Cash and Cash Equivalents in the Balance Sheet Read More »
What is non-controlling interest? Non-Controlling Interest can be described as the minority ownership of one business in another business. A business is said to have a non-controlling interest in another business if the shareholder of that particular company owns less than 50% of the outstanding shares of the company. Therefore, because of the fact that …
Non-Controlling Interest on Balance Sheet: Definition, Example, and Calculation Read More »
Introduction A lease is defined as a contract or part of a contract that conveys the right to use an asset for a period of time in return for a quid-pro-quo. They are considered as off-balance sheet financing items. It means that leased assets and liabilities are not reflected in the balance sheet of a …
Operating Lease on the Balance Sheet – Explained Read More »
What is Unearned Revenue? Unearned revenue is amount of money that is received by the business for goods and services that is yet to be delivered or rendered. Unearned revenue can also be interpreted as revenue received in advance from customers but the performance of service or delivery of goods would be done later on. …
How are Unearned Revenues Present in the Balance Sheet? Read More »
Introduction: Off-balance sheet items refer to those assets and liabilities that aren’t shown on a balance sheet. However, these assets and liabilities still belong to the company though they may not be directly associated with the company. Companies use this method of accounting to lessen the impact of ownership of certain assets and obligations of …
Off-balance Sheet Items (OBS Items) – What are they? Read More »
Balance sheet: The statement of financial position, also known as the balance sheet, is one of the financial statements prepared by companies at the end of the fiscal year. It constitutes of real account balances that do not close at the end of accounting year but rather, their balances are carried forward from one accounting …
What Are the Key Balance Sheet Items? 3 Key Items You Should Know Read More »
A Balance Sheet is one of the financial Statements the reveal the financial status of the business at a given point in time. It basically lists down all Assets, Liabilities, and the overall Equity (or Capital) that has been invested into the organization. In other words, the balance sheet is a snapshot of the overall …
Purpose of Balance Sheet – Here Are the 5 Purposes Yould Should Know Read More »
