Any business has 5 main financial statements. These are the Balance Sheet (Statement of Financial Position), the Income Statement (Statement of Profit or Loss), the Statement of Owner’s Equity (also known as the Statement of Changes in Equity), the Cash Flow Statement (Statement of Cash Flows) and the Notes to the Financial Statements. These key […]
INCOME STATEMENT PRESENT BY FUNCTION Read More »
Introduction: The balance sheet, also known as the statement of financial position, is one of the annual financial reports that exhibit a company’s financial position as at the year-ended. Share capital and liabilities are both line items of the balance sheet. The statement of financial position is based on the accounting equation, which is also
What Is the Difference Between Share Capital and Liabilities? Read More »
Unearned Revenue: Unearned revenue is the money received by an individual or a company for services that have yet to be provided, or goods that are yet to be delivered. This is a prepayment from the buyer for goods and services to be supplied at a later date. This would count as a liability for
Unearned Revenue vs Unearned Income – Key Different Explained Read More »
Unearned Revenue: Unearned revenue is the money received by an individual or a company for services or goods that haven’t been supplied or provided yet to the buyer. This counts as a prepayment from the buyer’s perspective for goods and services that need to be supplied at a later date to them. Unearned revenue is
Unearned Revenue vs Unbilled Revenue – What Are the Different? Read More »
Definition and meaning: Unearned Revenue: Unearned revenue is the cash obtained from a customer in advance of providing the goods or services they are purchasing. It is considered a short-term liability instead of revenue because, as per the revenue recognition principle of accounting, revenue is reported only when earned. Since the company owes money to
Unearned Revenue Vs. Unrecorded Revenue (Explained) Read More »
Introduction: On the contrary to what the names suggest, unearned revenue and deferred revenue are both the same thing. They are both incomes for which the cash has been collected, but the obligations of delivering goods and services are yet to be performed. This concept arises from the accrual basis of accounting, which requires companies
Unearned Revenue Vs. Deferred Revenue (Explained) Read More »
Introduction: Liabilities are something a company or person owes to another party. Liabilities are the obligations a company or business owes to its lenders. Most companies rely on liabilities as this way they can carry out their transactions and pay when they can. This makes business transactions more efficient. Liabilities can also be in other
How to see a company’s liabilities? Read More »
Current Liabilities and Current Assets are a major component of the Statement of Financial Position that is prepared by every company annually at the end of the year. The SOFP represents the financial position of a company at the year-end and constitutes of balances of capital and all types of assets and liabilities owned by
What Happens When Current Liabilities Are Greater Than Current Assets? Read More »
Long term Liabilities of the company are mainly obligations that are supposed to be paid by the company after at least one year. They include a variety of debt instruments, like bonds and mortgages. In the Balance Sheet, Long Term Liabilities are mentioned below the Current Liabilities. This is because these are mainly instruments that
How to Calculate Long Term Liabilities of the Company? Read More »
Accrued liabilities incur due to accrued expenses. Accrued means expenses that have emerged but have not yet been paid for by the business. Accrued liabilities can take the form of recurring or non-recurring liabilities. Only the accrual accounting method records the accrued liabilities. Accrued liabilities are different from accounts payable for a business. A business
Accrued Liabilities – Definition, Types, and Journal Entries Read More »