The meaning of ACCOUNTING is the system of recording and summarizing business and financial transactions and analyzing, verifying, and reporting the results; also : the principles and procedures of this system. How to use accounting in a sentence.
The meaning of ACCOUNTING EQUATION is the equality of debits and credits as used in the double-entry system.
(If a company’s operating cycle is longer than one year, an item is a current asset if it will turn to cash or be used up within the operating cycle.) Current assets are presented in the order of liquidity, i.e., cash, temporary investments, accounts receivable, inventory, supplies, ...
“Accounting” encompasses all of a company’s financial transactions. A well-managed accounting department will have set policies and procedures for expenses, data management, and the generation of financial reports. Financial accounting is concerned specifically with the generation of these reports, tha...
Accounting Treatment Valuation of Intangible Assets The formula for the valuation of intangible assets is: The market value of the business less the value of net tangible assets The market value of the company is a subjective figure and not fixed. It depends upon various internal and external fac...
Current Liability is a financial obligation that a company needs to pay within a year of incurring it. Also known asshort-term liability, a company fulfills this obligation using the current assets. In the event of fulfilling one current liability, the company might also create another such lia...
Prepaid expenses are expenditures paid for within one accounting period but consumed in a future period. Examples include prepaid rent and insurance. Current Assets Formula Current assets are calculated by adding all of theliquid assetson a balance sheet. The formula is as follows: ...
Your business balance sheet helps you organize your assets. But before you can begin accounting for them, you have to learn about assets. What are assets?
How Impaired Assets Work An asset is impaired if its projected future cash flows are less than its currentcarrying value. An asset may become impaired as a result of materially adverse changes in legal factors that have changed the asset’s value, significant changes in the asset’s market pri...
Listed property can also be depreciated over time. Property that meets the "more than 50%" test is eligible for thegeneral depreciation system (GDS), an accounting method that allows it to be written off more quickly, with larger deductions in the early years. If property is used 50% or ...