The basic accounting equation is a simple formula where assets are equal to liabilities plus shareholder equity, but this basic equation can be made more granular to provide greater insight into equity transactions. The type of business impacts the expanded accounting equation format, but the concept...
What are the basic accounting concepts? : Business Entity, Money Measurement, Going Concern, Accounting Period,Cost Concept, Duality Aspect concept, Realisation Concept, Accrual Concept and Matching Concept. What is periodicity and its causes?
In layman's terms, we can assume that it is the basic structure behind preparing the final accounts. It is the third step in the road map to prepare final accounts after the entries are passed in journal-register followed by classification and grouping of transactions to their respective ...
Accounting conservatism anticipates lower profits along with higher losses. Strictrevenue recognitionis a common policy for many companies using accounting conservatism. Revenue recognition follows the basic accounting concept known as thematching principle, which requires that all expenses incurred during the...
Why is it important that financial statements should be prepared on the basis of a conceptual framework? What is the main purpose of financial accounting? What is the purpose of financial accounting? What are the basic components of the conceptual framework for financial reporting?
Double entry accounting, also called double entry bookkeeping, is the accounting system that requires every business transaction or event to be recorded in at least two accounts. This is the same concept behind the accounting equation.
What are the three basic activities of accounting? What is activity-based accounting used for? (a) What are regulatory accounting principles? (b) How do they relate to enterprise fund accounting? What are regulatory accounting principles and how do they relate to...
The basic accounting equation for a balance sheet is: Assets = Liabilities + Shareholders’ Equity Need a balance sheet? Simply make a copy of our balance sheet template to get yours now. Examples of assets and liabilities on a balance sheet Here are some examples of common assets and lia...
The general concept ofaccrual accountingis that accounting journal entries are made when a good or service is provided rather than when payment is made or received. Entries are also made for debts and payments due. This method allows the current and futurecash inflows or outflowsto be combined...
A balanced scorecard is a performance metric used to identify, improve, and control a business's various functions and resulting outcomes. The concept of BSCs was first introduced in 1992 by David Norton and Robert Kaplan, who took previous metric performance measures and adapted them to include...