Accounting Definitions
Accounting definitions are defined by different authors in different ways. Accounting definitions are easy to understand and in easy language. Accounting definitions provides proper guideline & process in the preparation of different accounts of any thing.
The economic entity principle of accounting is a principle that gives us guideline about storing the financial information of a given entity. This principle states that the financial information of a given entity must be stored separately then the financial information of the owner
Dividend policy is a form of document that is designed by the management and decision makers of the company to decide the amount of dividend that must be paid to the investors. When a company shows growth in its profit and other related outcomes
A contingent liability can be defined as the loss that is not calculated at present but may occur at some point in future. The contingent liability comes in to the view when various uncertainties associated with assets and liabilities are resolved with the passage
Whenever a company sells its products and services the amount is either paid in cash on hand or the customers are allowed to pay for the products later. Whenever the customer pays for the product later it is called purchasing a product on credit
Sales tax is a kind of tax that is charged to the customer whenever the customer makes purchase of a certain product. The sales tax is charged by the company on the behalf of government and is charged according to the nexus concept. Sales
Asset purchase is a type of acquisition in which the purchaser only wants to purchase the assets of the seller. Although asset purchase is a common practice but it must be done with extra care so that there should be no confusion both at
The acquisition process is a process of acquiring another company, business or a firm that have a related business and can prove beneficial for the acquirer. The process of acquisition must be done with an extra care instead of randomly selecting any business entity
Dividend can be defined as the payment made to the stockholders of a company that have a share in the company’s profit as they have invested equity in the company. There are a number of different types of dividends such as:- Cash Dividend Property
It is a method of revenue recognition that is used by the accountants to find out the percentage of completion of project, revenue associated with project and the cost associated with the percentage of completed project. The cost to cost method can be termed
Profit Velocity Analysis is a method of evaluating the products to find out which products take highest time to get pushed from the manufacturing bottle neck. Most of the companies use contribution margin to find out the products that are hardest to push where
A small amount of cash that is kept reserved by a business to fulfill sudden but small every day operational needs is called petty cash. The small cash needs may include the purchase of office supplies, printing of office cards, every day fresh flowers
Stockholder equity can be defined as the financial share of the stockholder in a business. It can also be defined as the residual funds invested by the stockholder in the business that means the total amount of capital invested in the business by the
Current liability is that entry of the balance sheet that has to be paid by the company to any third party within a year. It is the responsibility of the company to pay current liabilities within current accounting year. In other words a current
The annual rate of return is the return that an investment provides a business over a period of one year or annually. The annual return is shown in a time weighted percentage that is spanned over a period of one year. There are a
Acquisition accounting is a formula or a method of showing the financial position of a company a purchasing company on the consolidated statement of the company. The term acquisition accounting is reserved for the process of purchase where one company is purchasing the other
An active asset is an asset in the business or a firm that is used on regular biases and is used as an active part of a business operation. Active asset is a routine part of the business activities and without this asset a
Activity cost driver is a factor or a certain indicator that affects the certain activities within a business and also affects the cost related to those activities. As the name indicates the activity cost drivers drives or influences the cost of a certain business
Accumulated fund is the fund that is accumulated over time by non-profit organizations such as NGOs and other such organizations. Accumulated fund is not used to by operational or other expenditures as this fund is beyond all these expenses. Accumulated fund in actual is