Introduction Liabilities in financial accounting are the financial obligations which a company has to pay. The liabilities are classified into two types. One is current liabilities and the other is non-current liabilities. Current liabilities are those liabilities that are due within a year, whereas non-current liabilities are longer-time liabilities that are due after a year. […]
Definition: Unearned revenue is the amount that the supplier receives in advance from a customer for which the goods or services are not supplied to or satisfied by the customers. This is the cash received by the seller or the company, but they have not yet performed their duties, or their performance is not satisfied
What is Unearned Revenue? Definition, Nature, Recognition Read More »
Introduction: Unearned revenue and prepaid expense are the same things but in the context of different people. Unearned revenue is the money received in advance for the services or products that are still to be delivered to the customer at a future date. This is a liability amount which is an obligation over the company.
Unearned Revenues Vs. Prepaid Expenses – Key Different Explained Read More »
Introduction: Unearned revenue is the cash proceeds received by a company or individual for a service or product that the company or individual still has to deliver to the customer. It is an advance payment from a customer that is expecting the delivery of services or products at a later date. The company cannot recognize
IS UNEARNED REVENUE AN ASSET OR LIABILITY? Read More »
Inventory is a current asset appearing in the balance sheet under the head current asset as well as a major item of the income statement. Inventories are goods held for sale in the ordinary course of business that can help the management of the company to control and improve the business profitability and operate efficiently.
How Do Inventories Affect the Costs of Goods Sold? 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 »
Definition: Deferred tax asset arises when differences exist between the taxable income and actual income of a company. In other words, it is the amount of money the IRS owes to you because your taxable income was higher than your actual income for a particular accounting period. Hence, you paid higher taxes than you reported
Deferred Tax Assets – Definition, Example, and Why the Deferred Tax Asset Arises Read More »
Definition: The opening balance of any real account is the value of a particular class of account on the first day of the financial year. It represents the brought forward or opening amount of an asset, liability, or equity item from the preceding financial year. Real account: These are accounts reported on a balance sheet
What is the Opening Balance of the Financial Statements? (Explained) Read More »
The process of getting financial statements audited is a really important step in lieu of ensuring that the organization has presented true and fair view of their financial position over the past year. Therefore, the responsibility of an auditor to provide assurance on that particular claim is quite significant, since it really impacts the overall
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Financial Statements are very important and useful tools when it comes to measuring the overall performance of the company across a given time frame. There are numerous stakeholders which make use of the financial statements, essentially because of the fact that they provide a snapshot regarding the company’s performance in shorter time duration. As a
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