Branches of Accounting: Accounting has universal application for recording transactions and events and presenting suitable information to aid decision-making regarding any type of economic activity ranging
The loss suffered by a company on the sale of fixed assets, The loss suffered by the business in the ordinary course of business is
Contingent Assets and Contingent Liabilities: A contingent asset is a potential asset associated with a contingent gain. Unlike contingent liabilities and contingent losses, contingent assets and contingent gains are not recorded in accounts, even when they are probable and the
Systems of Accounting, Basis of accounting (Cash Basis & Accrual Basis). Difference between Accrual Basis of Accounting and Cash Basis of Accounting. Cash Basis of accounting:
Types of Cash Book: Cash book is the book in which all transactions concerning cash receipts and cash payments are recorded. Cash Book is in
Steps to Locate Errors: Even if there is only a very small difference in the trial balance, the errors leading to it must be located and
Accounting Principles : Accounting is a language of the business. Financial statements prepared by the accountant communicate financial information to the various stakeholders for decision-making
Difference between Capital Expenditure and Revenue Expenditure: The following are the points of distinction between capital expenditure and revenue expenditure: The Revenue Expense relates to the
Accounting Equation: The accounting equation that is the foundation of double entry accounting. The accounting equation displays that all assets are either financed by borrowing money or paying with the money
Capital Profit and Revenue Profit: Capital profit which is earned on the sale of the fixed assets, The profit which is earned during the ordinary course
Comparison between Capital Expenditure and Revenue Expenditure, check out difference between capital Expenditure and Revenue Expenditure. Capital Expenditure: This represents expenditure incurred for the purpose
Features of the Ledger Account: After recording the transactions in the journal, recorded entries are classified and grouped into by preparation of accounts. The book
Limitations of Accounting, What are the Limitations of Accounting: Accounting is not fully exact: Accounting is influenced by the personal judgment in respect of various terms.People
Definition of Accounting: Accounting is used by business entities for keeping records of their monetary or financial transactions. A businessman who has invested money in
Balancing Ledger Accounts: Balancing of an account means the process of equalizing the two sides of an account by putting the difference on the side where
Capital and Revenue Receipts: Capital receipts comprise of payments or contributions into the business by the proprietor, partners or companies towards the capital of the firm
Users of Accounting Information: Accounting is of primary importance to the proprietors and the managers. However, other persons such as creditors, prospective investors, etc. are
Role of Accountant: An accountant performs financial functions related to the collection, accuracy, recording, analysis and presentation of a business, organization or company’s financial operations.
Double Entry System of book-keeping has emerged in the process of evolution of various accounting techniques. It is the only scientific system of accounting. According
Petty Cash Book: Payments in cash of small amounts like traveling expenses, postage, carriage etc. are petty cash expenses. These petty cash expenses are recorded in
Rules of Debit and Credit: The left hand side of an account is called the debit side; while the right hand side is called the
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Suspense Account: When a trial balance does not agree, efforts are made to locate errors and rectify them. However, if reason for disagreement of trail
Rectification of Errors: Every concern is interested in ascertaining its true profit and financial position at the close of the trading year. But inspite of the
Difference between Capital Receipts and Revenue Receipts: Receipts which are not of revenue nature are capital receipts.The Receipts which are not received now and then
Accounts and its Classification (Accounts Classification): The business transactions are recorded in accounts. An account is an individual record of a person, firm, or thing, an
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Trial Balance methods: A trial balance is a schedule or list of debit and credit balances extracted from various accounts in the ledger including cash
Revenue Expenditure: Expenses whose benefit expires within the year of expenditure and which are incurred to maintain the earning capacity of existing assets are termed as
Advantages of Accounting: These advantages usually coincide with the ability for companies to improve operations and overall profitability. Business owners can also create a competitive