Overview Accounting can be considered one of the most important ancillary functions within the company. This is primarily because of the reason that it gives a direct insight into the performance of the company, which can eventually be used as a very important tool for decision-making. Therefore, companies put a lot of emphasis on ensuring […]
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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 large amount of cash for making payments to certain suppliers that accept
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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 company owns. They include tangible physical business properties like
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Meaning of Equity Reserves Reserves refer to a component of shareholders’ equity, the amount kept apart for estimated claims or creation of contra asset accounts for bad debts. Reserves always have a credit balance. The reserve which belongs to equity shareholders or where it is marked for any purpose is equity reserves. The reserves appear
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Other current liabilities are types of categorization of liabilities. These are residual current liabilities that have not been specified by the company or regulations or do not meet the criteria of being classified separately. They are referred to as they are uncommon and insignificant like the major accounts of current liabilities as trade payables, accounts
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Other current assets are a type of categorization of assets. These are residual current assets that have not been specified by the company or regulations or do not meet the criteria of being classified separately. They are referred to as they are uncommon and insignificant, like the current assets like cash, accounts receivables, and prepaid
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Overview: The statement of changes in equity is one of the four main financial statements prepared by the entity for the end of the specific accounting period along with other statements such as balance sheet, income statement, and statement of cash flow. This statement normally presents the entity’s capital, accumulated losses, or retained earnings, depending
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Businesses that deal with physical products will have inventory at some point during their operations if not always. Inventory is a term used to describe all tangible materials that businesses use to manufacture products for sale. For businesses, it is one of the most important assets as it is the main reason for the revenues
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Pro forma financial statements are projected financial statements that are produced using several presumptions or projections. The business preparing the pro forma financial statements make some presumptions and prepare projected financial statements based on those presumptions. For example, the business might prepare pro forma financial statements to see the impact of possible litigation on the
HOW TO PREPARE PRO FORMA FINANCIAL STATEMENTS STEP BY STEP? Read More »
The income statement of a business, also known as the statement of profit or loss. It is among the five key financial statements for businesses. The other four are the balance sheet (also known as the statement of financial position), the statement of owners’ equity (also known as the statement of changes in equity), the
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