Wikiaccounting

What Are the Five Audit Assertions? (The 5 Most Important)

Companies prepare financial statements to report their financial standing. These statements usually include the balance sheet and income statement. While these are the most prominent ones, companies also prepare the cash flow statement and statement of changes in equity. Usually, companies report financial information in their accounts at the end of each accounting period. This …

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What Is the Journal Entry for Accounts Payable?

Account Payable

Many companies operate in a supply chain facilitating converting material to finished goods. In this process, a company purchases raw materials from a supplier. Once they get those items, they put them through a manufacturing process to alter them. In some cases, companies may also sell them further without much modification. Most companies profit through …

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How to (Closing) End Journal Entry?

General Journal

Companies record accounting entries during a period. These entries concern business transactions that they face during that period. Usually, companies record these transactions as they occur. During this process, they consider various accounting principles and standards. Companies use journal entries to record those transactions. Before that, companies may also put them on the books of …

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How to overcome the limitations of financial statements?

Financial Statements

The share market is a significant source of income for many investors. Most investors hold various assets and securities in the market. Usually, they invest in those securities for two reasons, including capital gains and dividend income. On top of that, when they buy a company’s shares, they become its part-owner. It allows them to …

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How to interpret financial statements for better business decisions?

Financial Statements

Interpreting financial statements is a skill that all investments and shareholders require. It consists of evaluating each statement individually and combinedly. By doing so, investors can receive information crucial for their relationship with the company. More specifically, interpreting the financial statements allows investors to make better business decisions. However, the process does not have a …

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9 Popular Ways for Manipulating Financial Statements

Financial Statements

Financial statements are a link between a company and its stakeholders. Through this link, companies can present a picture of their operations. Usually, they show this picture through four primary financial statements. These include the balance sheet, income statement, cash flow statements and statement of changes in equity. Companies can use these statements to communicate …

What is the Objective of Financial Accounting? (10 Main Objective You Should Know)

Financial Accounting

Financial accounting aims to achieve operational management of accounting transactions related to business. It’s focused on collecting transaction-wise details, recording, summarizing, and reporting this information is structured and useable form. Further, the process is designed to help businesses keep a detailed record that helps meet legal and constructive obligations. Let’s discuss the objectives of financial …

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Is it Hard to Study Financial Accounting?

Financial Accounting

The answer to this question is subjective, and the answer varies from person to person. Generally, the difficulty of studying financial accounting or any other subject is dependent upon the person’s interest and other factors. These factors include but are not limited to your educational background, personal interest, and available facilities like tutors, etc. However, …

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What Are the Advantages of Financial Accounting?

Financial Accounting

The history of accounting is as old as the history of a human being. No chapter of a human’s life is completed without accounting. No matter if you are thinking about personal, business, or professional life, accounting has its role to play. Imagine financial transactions of your business are not recorded and accounted for properly; …

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How Does Financial Accounting Help in Decision Making?

Financial Accounting

When people think of accounting, they immediately associate it with financial accounting. One of the reasons behind it is that these terms have been synonymous. However, accounting defines a wide range of processes or functions within a company. On the other hand, financial accounting is a part of those processes. In essence, it is a …

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