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Operating lease on the balance sheet

Introduction A lease is defined as a contract or part of a contract that conveys the right to use an asset for a period of time in return for a quid-pro-quo. They are considered as off-balance sheet financing items. It means that leased assets and liabilities are not...

Equity Vs Liabilities

There are three concrete parts to the Balance sheet. The parts comprise of assets, liabilities, and Equity. These three parts are also based on the accounting equation is: Shareholder’s equity= Assets – Liabilities In simple words, the primary difference is that...

Equity Vs Assets

There are three concrete parts to the Balance sheet. The parts comprise of assets, liabilities, and Equity. These three parts are also based on the accounting equation is: Shareholder’s equity= Assets – Liabilities In simple words, the primary difference is that...

Land improvements depreciation

Fixed assets represent long-term assets used by companies and businesses in the generation of revenues and profits. There are several types of fixed assets that companies use, including property, plant, and equipment. Since most of these assets require high-value...

Accounting for Consignment Inventory

Definition: Consignment inventory represents stock legally owned by one company or business but held by another. Usually, the risks and rewards associated with consignment inventory remain with the company that owns it. Consignment inventory is common in industries...

Accounting for unearned revenue

Revenues refer to any income earned by a company or business. For most companies, revenues come as a result of selling products or services. However, sometimes companies may also transfer goods and not receive funds for it but still need to record the revenue related...

Equity Vs. Capital: 6 Difference

In the world of finance, equity refers to any money companies generate through their shareholders or businesses through their owners. Equity is a type of finance that companies use when starting up and down the line when they need funds. However, there's also another...

Equity Vs. Debt: 6 Difference

When it comes to the sources of financing, companies or businesses have two primary options. These are equity and debt. Both of these types of finance have their advantages or disadvantages. However, companies use a combination of both to reap the maximum possible...

Operating leases on Balance Sheet

A lease is an agreement between two parties, a lessor and a lessee. In this agreement, the lessor gives the lessee the right to use an asset in exchange for payments. Usually, it consists of leasing property, machinery, vehicles, or other fixed assets. While the...