Basic Accounting Terminologies
Jennifer edwards As we know the process of accounting is that of recording monetary transactions of a business in an organized and transparent form and to prepare financial statements related to assets…
Retail Inventory Method
As we all know an inventory is a detailed record of all the stored goods or items business posses for a certain period of time. Inventory gives the status of…
Contribution Margin Explained
It can be defined as the marginal profit earned by a firm or a business at the sale of each unit of the product. Contribution margin is used to measure…
Debit and Credit Explained
As we all know that accounting is an art of recording and writing down monetary transactions in organized and disciplined form. Modern day concepts of accounting were introduced by Luca…
Calculating Net Income after Taxes
Net income of a company is the overall income that is left with the company at the end after subtracting expenses, losses, interest, costs, depreciation and taxes from the revenue…
Principles of Revenue Recognition
Principle of revenue recognition is also included in general accounting principles with other common principles. This is one of the basic principles of accrual accounting. According to this principle the…
Explaining Unearned Revenues
Unearned revenue can be defined as the cash piles that are generated due to several business transactions however is are not actually earned by the business. For example advance payments…
Trial Balance Sheet
A trail balance sheet is one of the most important financial documents of the double entry system. Trial balance of a business can be done at any time of the…
Difference between the Equity and the Cost Method of Accounting
These are two different methods of accounting that are used in different circumstances and situations. The equity method of accounting is used when the influence and control of the firm…
Accounting Profit Formula Explained
Accounting profit formula is used to calculate profit that incurred after selling the goods. Profit can be defined as the difference between the cost price and the sale price of…
Explaining Assets in terms of Accounting
Whenever we analyze or examine the balance sheet of a company the first heading that comes is that of current assets. Current assets may be referred to cash or other…
Accounting Information System
Accounting information systems are the tools that help you in mining the financial data of your business so that you can get the important financial information on your fingertips. With…
Causes of Bankruptcy
A business can lead to bankruptcy due a number of factors that may be under the control of management or beyond management control. Most of the time a business…
The Use of Venture Capital Funding for Business Expansion
Venture capitals are the source of funding for your business who invests in your business with an expecting return from their investment. Venture capitalists invest in your business as they…
Understanding Cash Flow Balance
Understanding cash flow and cash flow balance is very important to run a successful business. A negative cash flow can adversely hurt your business irrespective of a good product, reputed…
How to collect Debt and Overdue Accounts
If you are a small business owner, collecting your debts, unpaid bills and overdue accounts can be a quite difficult task for you. However collecting debt is very important for…
Using Break Even Analysis to make managerial decisions
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…
Financial Ratios: Figures that keep you informed
Business ratios can be explained as financial tools that can help you in finding the weak and erroneous areas of your business. With the help of these ratios you can…