Accounting is defined as the art of recording transactions of a particular business. Accounting helps the owner of the business to summarize huge transactions in summarize & compact form. Accounting is main function of any business which is handled by the book keeper or big companies hire accountant for it.
Headline Earnings Headline earnings of a company can be defined as the earnings that are solely based on operational and capital investment activities of a business. All the other incomes such as income incurred due to staff reductions, assets sale and accounting write downs
Accounts receivables can be defined as the amount of money or cash that is to be received by the company from another party. Accounts receivables are considered as the assets of the company and are listed on the debit side of the balance sheet.
General Ledger General ledger is one of the basic entity is the basic accounting cycle that is used to store transactions that are further used in income statement and balance sheet of a company. This can be called as the most basic or main
As we know that a breakeven point is a point where there is no loss and no profit. This means a break even analysis provide us with the information that how many number of products must be sold to earn total amount that is
A balance sheet is a financial statement of a business that can be use for internal and external purposes. The preparation of both internal and external balance sheets is for different uses and they are intended for completely different audiences. For example internal balance
There are different kinds of financial statements for reporting cash flows in a business such as income statement and statement of cash flows. These cash flows statements are different from balance sheet in a respect that they report the flow of cash for a
Accounting Methods Accounting methods are the set of rules or specific procedures through which a business keeps its financial records and transform these records into financial reports. Accounting methods are categorized in two categories the cash base accounting method and accrual based accounting method.
For a business or a company the chart of accounts may be described as an index or list of those financial accounts that a business utilizes in its accounting system and later posts to the ledger. Chart of accounts helps a company to
Maintaining the record of financial transactions and financial day to day business activities is called bookkeeping. The basic purpose of bookkeeping is to maintain the financial records of a business clean, transparent and up to date. Bookkeeping provides the basic financial information which later
Every organization aims at making best possible use of its scarce resources, wants to know the results of its efforts and needs a measure of comparison so that deficiencies and improvements can be identified and collective efforts of the organization can be channelized for
Difference Between Bill of Exchange and Cheque/Check: Learning Objectives: What is the difference between bill of exchange and cheque/check? Check Bill of Exchange It is drawn on a banker It may be drawn on any party or individual. It has three parties – the
Difference Between Bill of Exchange and Promissory Note: Learning Objectives: What is the difference between bill of exchange and promissory note? A bill of exchange differs from a promissory note on the following points: Promissory Note Bill of Exchange It is promise to pay
Advantages and Disadvantages of Absorption Costing System Learning Objectives: What are the advantages and disadvantages of using absorption or full costing method? Advantages of Absorption Costing: It recognizes the importance of fixed costs in production; This method is accepted by Inland Revenue as stock
Activity Base Definition Activity base is a measure of whatever causes the incurrence of a variable cost. For example, the total cost of X-ray film in a hospital will increase as the number of X rays taken increases. Therefore, the number of X rays
Accounting Principles and Accounting Equation Definition and Explanation: Accounting is the language of business. Affairs of a business unit are made understood to others as well as to those who own or manage it through accounting information which has to be suitably recorded, classified,
Accounting for Non-Trading Concerns Definition and Explanation of Non-trading Concerns: Individuals or institutions with activities other than trade are known as non-trading concerns. Examples of non-trading concerns are clubs, hospitals, libraries, colleges, athletic clubs etc. These institutions are started not for carrying on a
Generally Accepted Accounting Principles (GAAP): Generally accepted accounting principles (GAAP) are those principles that have substantial authoritative support. The AICPA’s code of professional conduct requires that members prepare financial statements in accordance with generally accepted accounting principles (GAAP). Specifically rule 203 of this code
Future Value and Present Value Tables Future Value Tables: Table 1: Future Value of $1 Table 2: Future Value of Ordinary Annuity (Annuity in Arrear – End of Period Payments) Present Value Tables: Table 3: Present Value of $1 Table 4: Present Value of