Accounting

This Accounting category will cover various topics on accounting ranging from financial, management, and advance accounting.

Are Financing Fees Amortized?

Debt financing fee is amortized over the life of the debt under the GAAP rules. The borrower incurs different types of debt issuing or financing costs. Let us discuss what are financing costs and how they should be amortized over the period of the debt instrument. What are Financing Costs? Financing costs refer to the …

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What is a Temporary Account?

A temporary account provides an accumulated balance of a specific account type for one accounting period only. It starts and ends with a zero balance for each accounting period. Let us discuss what is a temporary account, its different types, and its key differences from a permanent account. What is a Temporary Account? A temporary …

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What is a Permanent Account?

A permanent account is an ongoing source of information for an entity. It reflects the carrying balance of a particular account on the balance sheet of an entity at any time. Once created, a permanent account is maintained throughout the life of a business. Its current balance is reconciled periodically to reflect the accumulated balances …

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What is Year-Over-Year (YOY)?

Year-over-year or year-on-year (YOY) is a comparison term you have seen everywhere. It is used to compare two annual figures and is most commonly used in financial data sets. YOY analyses are common for economic, business, and investment analyses. It is a simple term and can be calculated easily for any type of data. Let …

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Is Deferred Revenue a Liability?

Deferred revenue is unearned income that a business received in advance. It is recorded as a current liability on the balance sheet of a business. Once the seller delivers the promised goods/services, the current liability is removed and turned into earned revenue in the income statement. Let us discuss what is deferred revenue, how it …

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Depreciation Vs Amortization Vs Depletion – What is the Difference Between Them?

Depreciation, amortization, and depletion are all cost allocation methods for different types of long-term assets owned by businesses. All of these are accounting terms with non-cash entries and effects on profits. These accounting methods help companies follow the accrual accounting principles of matching entries. Let us discuss what these terms and the key differences between …

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