Financial Accounting

This category covers various aspects of financial accounting such as basic accounting, principle of accounting, accounting treatment as well as financial statements or financial reporting.

Return on Assets – ROA: How to Calculate and 3 Ways to Increase Return on Assets – Explained

Return on assets is one of the most crucial matrices to assess profitability and business operations performance. If the business efficiently manages its operations and utilizes assets, the return on assets is expected to be higher and vice versa. Detailed understanding Return on assets is calculated by dividing net income by the total assets. The …

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What is the periodicity assumption in accounting?

Periodicity assumption states that a business can report its financial information in any designated period of time. It means that they can divide the activities of a business into an artificial period. That’s the reason why the periodicity assumption is preferred while presenting financial information. This assumption allows the companies to prepare their financial statements …

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True Up in accounting: What is It?

Accounting has evolved to be complex for providing comprehensive insights to the user of financial statements. The objective of improving financial reporting is to enhance the true representation of the financial and operational information presented in the financial statement. So, the process to enhance user experience requires the business accountant to present financial information that …

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Accounting for Accrued Vacation – US GAAP Rules

Accrued vacations are entitled absence payments to an employee from the employer when certain conditions are fulfilled. An employer may adopt a certain compensation policy that includes compensated absence. ASC 710 provides guidelines on the accounting treatment of compensated vacations and the accrued liability for an employer. Let us discuss how an employer can account …

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Accounting for Spare Parts Inventory

Companies involved in the manufacturing process have assets that assist in this process. Usually, these assets include machinery, which helps them alter raw materials into finished goods. Companies acquire machines through capital investments, usually an upfront payment to a supplier. In some cases, they may also feature leased machinery. Regardless of the source, companies need …

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