What is a prepayment? (Definition, Explanation, Journal Entry, and Example)

Current Assets

Definition Prepayment is an accounting term referred to the types of expenses not incurred yet but for which payment is made in advance. As the economic benefits from such resources are not taken yet this is why it is classified as an asset rather than an expense and...

Accounting for Consignment Inventory (Definition, Treatment, Journal Entry, and Example)

Inventories

Definition: Consignment inventory represents stock legally owned by one company or business but held by another. Usually, the risks and rewards associated with consignment inventory remain with the company that owns it. Consignment inventory is common in industries...

Accounting for Goods in Transit (Explanation, Examples, Treatment, and Journal Entries)

Inventories

What Is Goods In Transit? Goods in Transit indicates the stock that is bought from the purchaser and delivered through a dealer, nonetheless, the merchandise is in transit but still needs to arrive at the proposed buyer. Towards the ending of an accounting time frame,...

Is cash debit or credit? – Explanation with journal entries

Current Assets

Explanation: Cash is the company’s current assets holding for small expenses in the office or for a certain large amount of cash transactions. For example, the company holds petty cash for making payments on small office expenses. Sometimes, the company might keep a...

How to Safeguard Company Assets?

Current Assets, Financial Statements

Your success in business does not just depend only on your ability to make sales profits. You have to also learn how to properly manage and safeguard your company assets; they are what makes the profits for you. Company assets are the valuable properties that your...

How to Safeguard A Company’s Cash?

Current Assets, Financial Statements

There are a lot of risks associated with running a business and managing its assets. Learning how to safeguard your company’s cash is one of the viable ways to minimize those risks. Cash is a very important asset for every business. It provides a quick and...