Introduction: Any revenue expenditure that has been incurred during a specific period of time (a month, quarter or a year) but has not been paid for is referred to as an accrued expense. In simpler words, accruals are amount payable against operating expenses. Any revenue expenditure, whether accrued or paid, is reported in the income […]
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What is Statement of Cash Flow? Cash flow is the amount of cash inflow and outflow from the cash account of an organization. It eliminated the non-cash transactions and only accounted for the cash transactions. The cash flow is recorded in a specific report model which is term as a statement of cash flow. The
How Do Accounts Payable Present in the Statement of Cash Flow? Read More »
Introduction: Inventory or stock-in-trade is the goods or commodities held by an entity for the purpose of resale or trade. At the end of an accounting year, companies usually have unsold goods in their warehouses which are referred to as closing inventory or closing stock-in-trade. This item is not reported in the income statement, but
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Introduction: A statement of cash flow is part of the annual financial statements that are presented by an entity along with the statement of financial position, statement of comprehensive income and statement of changes in equity. It represents the net cash flow (cash generated less cash spent) of an entity during a specific period (i.e.
How do Deferred Income Taxes present in Statement of Cash Flow? Read More »
Meaning of Accounts Receivables Account receivables are the amount of money due to enterprise for goods or services delivered to customers but not yet paid by them. It refers to the outstanding invoices the enterprise has or the customers owe the enterprise. It represents a line of credit extended by enterprise and normally has terms
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Meaning Impairment expense is an accounting expense recognize on the basis of which a permanent reduction in assets value is justified in the books of account compare the recoverable amount of the assets at the end of the reporting date as per certain impairment conditions or factors. The assets of the enterprise are tested for
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Meaning of Depreciation Depreciation of an asset begins when it is available for use i.e. when it is in the location and condition necessary for it to be capable of operating in the manner intended by the management. Depreciation is allocated so as to charge fair proportion of depreciable amount in each accounting period during
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Cash flow from investment activities is an item on the income statement that reports the aggregate change in a company’s financial position ensuing from investment gains or losses and changes ensuing from amounts spent on investments in capital assets, such as plant and equipment. When analyzing a company’s cash flow statement, it is important to
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What is a Cash Flow Statement? Your business’s income statement shows your net profit whereas the balance sheet shows what quantity of cash you’ve on hand. The cash flow statement provides a close map of wherever the business’s financial gain comes from and wherever it goes, making it terribly helpful for daily operations. In financial
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In accrual-based accounting, all the credit and cash transactions are recorded collectively. The financial statements of the business entity also represent the financial data corresponding to credit and cash transactions. It is an accurate method of preparing financial statements because it shows the actual income the company has earned regardless of how much cash payments
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