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.
Double entry accounting system is the basic accounting system that records the effects of a transaction from both the seller and the buyer perspective. The double entry accounting system provides a complete view of company financial affairs. There are two sides of a double
Account payable is the accounting account that shows the liability of a company or a business. It shows the obligation of a short term debt a business has to pay to someone like creditors. The account payable account is counted in the liabilities of
Mean Variance Analysis can be defined as a risk assessment tool mostly used by the investors through which they weigh the risk against the expected return from a given investment. While investing in a given asset investors try to look at the expected risk
In order to maintain their capital and perform their operations almost all the companies borrow loan from banks and other companies. Most of the companies return the borrowed loan however this is not always the case as sometimes the companies or the businesses default
Accountability can be defined as the responsibility of accountants or the accounts department of a particular business to keep finances of a business clear and transparent. Each individual or department is given a particular function related to accounting or some other financial matter and
The actual value of an asset that is shown in the balance sheet is called as the book value of that asset. In order to calculate the book value of the asset the total cost of the asset is determined and then depreciation or
Straight Line Method of Depreciation is a method of calculating depreciation of an asset where the actual cost of the asset is depreciated over the entire useful life of the asset. In order to calculate depreciation by this method the difference between the cost
The inventory conversion period is defined as the total time period required converting the entire inventory into sales. In other words it can be defined as a relationship between the total number of days in financial period and the inventory turnover ratio. This is
Net Operating Loss can be defined as a specific period or indication where the company comes to have a negative taxable income. This situation arises when the taxable income of the company is less than the actual tax deductions of the company as
It is measured as the difference between the assets and the liabilities of a company. This gap is calculated when the assets of the firms have different properties as compared to the liabilities of the firm. Liquidity Gap can be calculated as positive or
It is an accounting term that is used for the official capital fund of a non-profit organization such as charitable organizations and NGOs. The accumulated fund of an organization is the reserve of the funds and is maintained when revenue of the organization are
Accrued interest is the form of interest that has be calculated and recognized by the company on various financial documents and records but still it is not paid or received by the company. Interest that is recognized by the company is either payable interest
Accounting earnings is the actual amount of money that is earned by a company in a specific financial year. These earnings are the earnings that is actually reported on an accounting document and actually made public by the organization showing the public the actual
As the name indicates Accountants for Public Interest work free of cost just for the benefits of the public. API is an organization with a large number of accountants that work in the field of accounting to provide free services to the organizations such
Deferred billing is a method of billing in which buyers are do not charged with the interest even if they pay later than the due date of the purchase. The major advantage of deferred billing is that it helps in promoting the sales and
Controlled disbursement is a cash management technique usually employed in corporate businesses. With the help of this technique the flow of checks between the bank and the business are controlled properly. This is done in daily bases to avoid any confusion in the flow
Breakage is basically a topic that belongs to the category of Finance however sometimes firms get involved in breakage that have an effect on their revenues so we are going to discuss this topic under the accounting umbrella. Breakage is a form of revenue
It is a process in accounting that is employed by auditors in order to analyze the financial performance and review the financial information of the company. The audit cycle is conducted in every financial period or a given financial year before releasing the financial