Question

-This question was submitted by a user and answered by a volunteer of our choice. “Accumulated Depreciation” is the contra account used to record depreciation. Let me help you understand the meaning of accumulated depreciation. Meaning of Accumulated Depreciation Accumulated Depreciation is the total cumulative depreciation of tangible fixed assets up to a particular date. […]

-This question was submitted by a user and answered by a volunteer of our choice. In simple words, a petty cash book which is usually prepared by the ordinary or imprest system is a book of accounting prepared for the purpose of recording expenses of small value. For example stamps, wages, postage, carriage, stationery, etc.   The […]

-This question was submitted by a user and answered by a volunteer of our choice. Types of Financial Statements Statement of financial position A statement of financial position is also known as a balance sheet. It comprises a company’s assets, liabilities, and equity. With the help of a balance sheet, the financial position of a […]

-This question was submitted by a user and answered by a volunteer of our choice. No, an invoice is not a receipt.  To make the concept easy and understandable I would like to first explain the meaning of Invoice and Receipt followed by an example of each and Key differences between them. I would like […]

-This question was submitted by a user and answered by a volunteer of our choice. No, Goodwill is not a fictitious asset. What is Goodwill? The goodwill of an entity is an intangible asset. It can be said that it’s the excess amount an entity is liable to pay when it purchases all the assets […]

-This question was submitted by a user and answered by a volunteer of our choice. When a sum of money is received by the company before providing the goods or services, it is known as an advance received from the customer. It could be due to many reasons such as demand for security deposit by […]

-This question was submitted by a user and answered by a volunteer of our choice. A ledger account consists of the financial transactions of a business. It is generally used by accountants to record summarized monetary transactions. It is also known as the principal book of accounts and books of final entry. As per my […]

-This question was submitted by a user and answered by a volunteer of our choice. Negative Goodwill Yes, I believe goodwill can have a negative balance. We call this negative goodwill “Bargain Purchase“. It’s a difference between the purchase price paid for an asset and its actual fair market value. Although you should know that […]

-This question was submitted by a user and answered by a volunteer of our choice. Branches of accounting The types or branches of accounting are as follows: Financial accounting – Strict compliance with the generally accepted principles of accounting (GAAP) is observed while recording and classifying the business transactions and preparing the financial statements of […]

-This question was submitted by a user and answered by a volunteer of our choice. Accounts receivable as an asset I think before getting onto this question you should have a clear idea about what does an account receivable means. An account receivable refers to an amount due to be received by the company for […]

-This question was submitted by a user and answered by a volunteer of our choice. I think firstly you should have a glance over the concept of cost centre and then try and apply the concept while interpreting below given example. Meaning of a Cost Centre It’s a smaller part of a larger organization wherein […]

process-of-preparing-income-statement-from-trial-balance -This question was submitted by a user and answered by a volunteer of our choice. In the Income Statement, the Trading account represents the first part and the Profit & Loss account represents the second part. The trading account gives the overall purview of all trading activities, such as the purchase and sale of […]

-This question was submitted by a user and answered by a volunteer of our choice. Yes, investments are assets. First, let me familiarize you with the meaning of the term investments in order to understand its nature. Meaning of Investments Investments are assets or resources owned and controlled by entities. They provide future economic value […]

This topic was approached differently and simplified so that even a 5-year-old can understand what a “Debit and Credit in Accounting” means. There’s more focus on terms than accounting. What is a Debit? What is a Credit? Points to Remember Think Like a Business Inside a Journal & Ledger Examples Debit Vs Credit Quiz Free […]

-This question was submitted by a user and answered by a volunteer of our choice. Yes. But first, let me familiarize you with the meaning of Chart of Accounts. Meaning of Chart of Accounts Chart of Accounts is a numbered listing (account codes) of the various accounts that form part of the accounting records of […]

Meaning Tangible assets are those assets that can be measured, touched, and felt. These are long-term assets. These assets are used to help produce goods and services. These assets can be used as collateral when loans need to be borrowed. These assets are used for the long term and are very efficient for operational use. […]

-This question was submitted by a user and answered by a volunteer of our choice. Let’s first interpret the meaning and importance of the month-end close checklist. Month-end closing is an accounting procedure that accountants usually undertake at the end of the month to close the accounting records for a particular month. So, a month-end […]

-This question was submitted by a user and answered by a volunteer of our choice. Meaning of Core Business Operations In layman’s language, the term “core business operations” refers to the organization’s main or essential area of activity for which it was founded or came into existence. It does not only focus on the mission […]

-This question was submitted by a user and answered by a volunteer of our choice. Let me start with the term ledger balancing. What is Ledger Balancing? Balancing ledger accounts means totaling both the sides of the ledger account, finding the difference between the greater total & smaller total and then recording the difference on […]

-This question was submitted by a user and answered by a volunteer of our choice. The bank reconciliation statement (BRS) is prepared by the accountant of the business. It is prepared periodically to match all the bank transactions in the cashbook with the bank statement and ensure the accuracy of the same. The questions of who, […]

-This question was submitted by a user and answered by a volunteer of our choice. What is Amortization? Amortization can be referred to as the depreciation of intangible assets such as goodwill, patent, trademarks, copyrights, computer software, etc. It is the reduction in the value of intangible assets over a period of time. Intangible assets […]

-This question was submitted by a user and answered by a volunteer of our choice. An entity should not recognize a contingent asset in the financial statements. It can only be disclosed considering the probability of the inflow of economic benefits associated with the contingent asset. A tabular representation of the question asked – When, […]

-This question was submitted by a user and answered by a volunteer of our choice. Accumulated Depreciation Depreciation is a wear and tear of an asset due to the efflux of time and various other factors. It’s basically an allocation of the cost of a tangible asset over its useful life. Accumulated depreciation is the […]

-This question was submitted by a user and answered by a volunteer of our choice. A question often asked is, “Is bad debt an asset or liability?”. Let us try to understand this concept in detail. What are Bad Debts? In layman’s language, a Bad Debt is a non-cash expense incurred by a business when […]

-This question was submitted by a user and answered by a volunteer of our choice. The term negative working capital is derived from the concept of working capital. To begin with, I would like to briefly explain the meaning of working capital. In simple terms, Working Capital refers to the total amount of current assets […]