Differences

Introduction Assets include a wide range of things, both tangible and intangible. They can be things like cash, accounts receivable, furniture, machinery, patents, logos, and even social media accounts. An asset is anything of value that a company or person owns to achieve their goals. Fixed Assets are typically tangible assets like physical items or […]

Fixed Capital vs Working Capital Fixed Capital is the money invested by a business or its owners in long-term assets. Such assets are essential for business operations therefore they aren’t meant for immediate resale and are expected to last a long time. This includes various types of tangible assets, such as land, furniture, buildings, plant […]

Revenue Vs Profit Revenue – is the excess of revenue earned over expenditure incurred by a business for a given accounting period. It increases the total capital invested in a business. Such monetary benefit arise due to the; Business operations – Relating to business activities. Non-recurring events – Relating to unforeseen events e.g. fire, theft, loss […]

Depreciation Vs Provision for Depreciation Depreciation is an accounting process of distributing the cost of an asset over its estimated useful life as per the matching concept. However, when such depreciation is accumulated in a separate account till the date of the concerned asset’s disposal or sale, it is called provision for depreciation. In other […]

Bad Debts Vs Doubtful Debts Bad debts & doubtful debts are two terms that are often considered synonymous, but there is a fine line between the two. Bad debts refer to the amount of trade receivables that have become uncollectible i.e. they cannot be recovered from the debtors. On the contrary, doubtful debts refer to […]

Revaluation Account Vs Realisation Account Revaluation Account It is a nominal account used to distribute profit or loss originating from re-assessment of the book value of a firm’s assets & liabilities. The balance of a Revaluation A/C is either profit or loss (on revaluation) which is then transferred to “Partners’ Capital A/C” in their old […]

Discount vs Rebate Discount and rebate are commonly used terms in today’s dynamic markets, especially in the e-commerce world. Rebates and discounts are distinct forms of price cuts that directly or indirectly promote the overall sales of a business. Both the terms may sound similar, however, there is some difference between discount and rebate. applied. […]

Loss Vs Expense Loss – is the excess of expenditure incurred over revenue earned by a business for a given accounting period. It reduces the total capital invested in the business. Such monetary damage may arise due to; Business operations – Relating to business activities. Non-recurring events – Relating to unforeseen events e.g. fire, theft, […]

Sales Book Vs Sales Account Sales Book – It is a subsidiary book of accounting used to record all goods sold on credit. One of the major differences between sales book and sales account is that only the items sold on credit are recorded in the sales book, whereas the same is not applicable to […]

Purchase Book vs Purchase Account Purchase Book – It is a subsidiary book of accounting used to record all goods purchased on credit. One of the major difference between purchase book and purchase account is that only the items purchased related to the core business operations are recorded in the purchase book, whereas the same […]

Debtors vs Creditors While purchasing goods on credit a buyer may not make the payment immediately instead both the seller and buyer may enter into a lending & borrowing arrangement. This allows delayed payments for current invoices. Even though payment terms are mutually agreed upon there is still a difference between debtors and creditors. Typically […]

What is the Difference Between Current Assets and Liquid Assets? Current Assets and Liquid Assets are both used to assess a company’s cash position and are also applied in the process of ratio analysis to compare with other related variables. They are similar, however, there is a slight difference between current assets and liquid assets. Both current assets […]

Difference Between Ledger and Trial Balance Although ledger and trial balance are both integral parts of the same accounting cycle, there is still a considerable difference between ledger and trial balance. They both have their respective relevance and timing in the business cycle. In short, a ledger is an account wise summary of all monetary transactions, whereas a […]

Carriage Inwards Vs Carriage Outwards Carriage inwards and carriage outwards are two different types of expenses incurred by a company while buying and selling goods. They may be treated alike inside a trial balance, however, there is a clear difference between carriage inwards and carriage outwards. One is charged when the goods are being procured […]

Difference Between Journal Entry and Journal Posting Journal entry is recorded in a journal which is also known as the primary book of accounts, this is where all transactions are recorded for the first time in a progressive order. The words are often used around each other, however, there is a difference between journal entry and […]

Depreciation Vs Depletion Vs Amortization All assets with an estimated useful life eventually end up being exhausted. Different types of assets such as fixed, intangible & mineral assets are systematically reduced within their useful life. The difference between depreciation, depletion and amortization depends on the type of asset in question. Depreciation, Depletion and Amortization are three […]

Bill of Exchange Vs Promissory Note To pay for credit sales a buyer may make a written promise in form of a promissory note or a bill of exchange. Below is a compilation of the major points of difference between a bill of exchange and a promissory note. Definition (Bill of Exchange) – It is a […]

Depreciation Vs Amortization One of the main principles of accrual accounting is that an asset’s cost is proportionally expensed based on the period over which it is used. Both depreciation and amortization (as well as depletion and obsolescence) are methods that are used to reduce the cost of a specific type of asset over its […]

Capital Receipts vs Revenue Receipts There are two types of amounts received by a firm during its regular course of business, Capital Receipts and Revenue Receipts. Difference between capital receipts and revenue receipts can be compiled as follows;   Capital Receipts 1. Capital receipts refer to amounts received by a business which lead to an […]

Current Assets Vs Current Liabilities Assets and liabilities are classified in many ways such as fixed, current, tangible, intangible, long-term, short-term etc. While analyzing the balance sheet of a company it is important to know the difference between current assets and current liabilities. Here the distinction is related to the age of assets and liabilities.   […]

Profit and Loss Vs Profit and Loss Appropriation Account Profit and loss appropriation account is an extension of the profit and loss account itself, however, there is a fundamental difference between profit and loss & profit and loss appropriation account. By definition, a P&L account or Income statement is one of the three financial statements […]

Revenue vs Profit Revenue and Profit are terms often used interchangeably however they are different and are calculated in a different way before being shown in the books of accounts. In a nutshell, the difference between revenue and profit is that Revenue can be termed as money a business makes by selling its main goods/services […]

Net Profit VS Operating Profit The term “profit” is divided into different types according to the source of benefit and the stage at which it is calculated during the life cycle of a business. This article illustrates the difference between net profit and operating profit. Some of the most common forms of profit that can […]

Gross Profit Vs Operating Profit Gross Profit The word Gross means “before any deductions”. This implies that profit before any deductions is called Gross profit. It is also called “Sales Profit”. Difference between gross profit and operating profit can be understood from their point of origin, deductions (if any), etc. It is the difference between total revenue earned from […]

Cost Accounting Vs Management Accounting The difference between cost and management accounting is very important to understand as both of them serve different purposes and different audiences. A person from the cost accounting team may not find a piece of information relevant, but a management accountant may not be able to work without it. A […]