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.
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 …
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 …
Depreciation Vs Amortization Vs Depletion – What is the Difference Between Them? Read More »
The current and quick ratios are good indicators of the short-term liquidity of a business. These ratios can also provide help in analyzing the long-term solvency as well. Both ratios use a similar form of current assets and current liabilities. However, the interpretation of both these ratios varies with some key differences. What is the …
Current Ratio vs Quick Ratio – What are the Key Differences? Read More »
What is a Quick Ratio? The quick ratio is the short-term liquidity test of a business. It is an accounting ratio that measures the ability of a business to pay current liabilities using cash and cash equivalents. The quick ratio considers assets that can be converted quickly into cash, hence the name quick ratio. The …
How to Calculate Quick Ratio? How It Can be Improved? Read More »
A nominal ledger is the primary source document for the accounting records of a business. It forms the basis of an accounting system in any business. Nominal ledger records all financial transactions categorizes them into different classes and provides useful information to the users. Let us discuss what is a nominal ledger, how it works, …
Goods received note (GRN) is a confirmation of the goods received from the seller. It is issued by the buyer with multiple copies. A GRN serves many purposes for the buyer, the shipping company, and the seller. Let us discuss what is a goods delivery note, how it is issued, and what are its advantages …
Interim dividends and final dividends are two common types of dividends issued by most companies. Established companies follow a consistent dividend policy to offer income to dividend investors. Both types of dividends offer some advantages and disadvantages to the issuers. Let us discuss what are interim and final dividends and their key differences. What is …
Interim Dividend Vs Final Dividend – Key Differences (Including Pros and Cons) Read More »
A special journal is a bookkeeping record that keeps a record of special accounts of a business. It is created for bookkeeping accounts that require special records and details to be recorded. A special journal can be customized and formatted according to the needs of a business. It is followed by businesses with manual bookkeeping …
A cash receipt journal is a source document that records all cash inflows of a business. It is an important part of the cash book. Businesses can record details of cash receipt transactions that are otherwise omitted from the general ledger. Let us discuss what is cash receipt journal, how it is constructed, and its …
A 10-column worksheet presents an overview of the account books of a company at the end of an accounting period. It can be prepared for any accounting period like any other financial statement. A 10-column worksheet serves many purposes for a business. It can also be used to prepare financial statements and extract valuable financial …
