Category Archives: Finance

Money measurement concept – As per this concept, only those transactions, which can be measured in terms of money are recorded. Since money is the medium of exchange and the standard of economic value, this concept requires that those transactions alone that are capable of being measured in terms of money be only to be recorded […]

Entity Concept – Entity concept states that business enterprise is a separate identity apart from its owner. Accountants should treat a business as distinct from its owner. Business transactions are recorded in the business books of accounts and owner’s transactions in his personal books of accounts. The practice of distinguishing the affairs of the business from […]

Accounting Estimates – Earlier we have learned how to measure a transaction, which had already taken place and for which either some value/money has been paid or some valuation principles are to be adopted for their measurement. But there are certain items, which are not occurred therefore cannot be measured using valuation principles still they are […]

Accounting Policy – Accounting Policies refer to specific accounting principles and methods of applying these principles adopted by the enterprise in the preparation and presentation of financial statements. Accounting policies are the specific principles and procedures implemented by a company’s management team and are used to prepare its financial statements. These include any methods, measurement systems and […]

Meaning of Accounting – Accounting is the language of business. According to American Institute of Certified Public Accountants (AICPA) – Accounting is the art of “Accounting is the art of recording, classifying, and summarising in a significant manner and in terms of money, transactions and events which are, in part at least, of a financial character, and […]

Interest on Capital – Interest is generally allowed on capitals of the partner Interest on capital of partners is calculated for the relevant period for which the amount of capital has been used in the business. Normally, it is charged for full year on the balance of capital at the beginning of the year unless […]

Towards becoming a professional Valuer demystifying the valuation conundrum: We have always been intrigued by magic.It is not often that a magician reveals his secrets. However, in the movie, Now You See Me, the magicians actually revealed the secret to their performance. In an early scene of the movie, a volunteer from the audience at a […]

Ledger: After recording the transactions in the journal, recorded entries are classified and grouped into by preparation of accounts and the book, which contains all set of accounts (viz. personal, real and nominal accounts), is known as Ledger. It is known as principal books of account in which account-wise balance of each account is determined. What […]