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.
Cash can be considered as the life and soul of the business and works like blood that keeps a business alive. For a small and medium sized business cash flow is even more important as it helps in flourishing a business in a better
As the name indicates wage expenses are the expenses associated with the wages of the non-manufacturing employees. Wage expense is delivered to the employees on the hourly biases or in the form of monthly or weakly salaries depending upon the pay structure of a
Residual income can be defined as the income that is left with a business or an individual after paying all the expenses, debt and mortgages from the net income. Most of the businesses calculate their residual income on monthly biases after paying all the
Theory of constraints is used as a tool or a method to find the most important constraint that is acting as a limiting factor while achieving the goals and objectives of a business or an individual. In pretext of accounting the theory of constraints
Budgeting accounting is the process of preparing budget that will help in general accounting process of the company. With the help of accounting budget or budgeting accounting one can make an estimation of the future sales along with the estimate of future monetary collection
The very first record of all the financial transactions are recorded in the journal and the process of recording these entries is known as journal accounting. The major reason of recording and reconciling these entries is that they can be used in future for
Inventory control system is a system that helps in controlling, calculating and locating the products or the raw materials within an inventory either manually or through a computer aided system. In modern era the inventory control system refers to a software system that helps
Sinking fund is a tool or a mean of reimbursing those funds that were borrowed from another party by issuing bonds, preferred stocks or debentures. The issuer of the bond pays payments in the form of chunks to the trustee who purchases the bonds
The summary that shows the financial performance of a business during a specific accounting period is called profit and loss statement. A profit and loss statement can be issued at the monthly, quarterly or annually according to the accounting period of the given business.
There is certainly a difference between bookkeeping and accounting as the bookkeeping is the subset of accounting. Bookkeeping refers to recording all the transactions that are made within a business. The transactions that are recorded by bookkeeping are issued and received invoices to customers
The bill of exchange is the binding document that exists between the two companies and usually done when two parties are conducting international trade. In this bill there are two parties and one of them agrees to pay a given amount of cash to
The expense that occurs within a company due to the salaries and wages of staff and labor is called payroll expense. The salaries are granted to the staff in return of their services they provide for the business. Payroll expense may also include all
Asset conversion loan is a type of loan that is reimbursed by liquidating an asset. These types of loans are kind of short term loans and are paid by liquidation inventory or other similar assets. This loan is also called as self liquidating loan
Accounting period is the time span or time period in which certain financial activities and transactions take place is called an accounting period. Most commonly a year of 365 days or a quarter of the year is taken as financial period where financial activities
Appraisal capital is a process of accounting assets. As the name indicates it is the capital that is appraised when it occurs within a business. Appraisal capital is gathered or accumulated when the market value of the asset is recorded more than that of
The money that moves out of a company’s or an individual account as a result of a transaction is called as outbound cash flow. The examples of outbound cash flow can be the cash paid to the suppliers, the wages given to the employees,
Invoice has an important role in accounting as it is the documented proof of a transaction. It is a piece of paper that is issued by the seller to the buyer. The invoice contains information about the price, quantity and the description of the
Revenue Forecasting is very important in order to see the future growth and expansion of the company related to the revenue and expenses of the firm. With the help of revenue forecasting a firm can make important decisions regarding the operations and staffing of