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.
Introduction When we talk about the accounting cycle, we normally refer to the 10 steps process in accounting from the analysis, then record those transactions until the preparation of Financial Statements and reversing entry where necessary. In this article, we will detail each of the 10 steps plus examples. So what are those steps in […]
The Accounting Cycle; An Ultimate Guide Read More »
Introduction How to account for amortization of prepaid expenses is the key for accountants not just for a big company but also for a small business entity. Prepaid expenses commonly happen when an entity adopts the accrual basis accounting. When an entity makes an advance payment; for example, for rental for a period of one
How to Account for Amortization of Prepaid Expenses? Read More »
Accounting for accrued expenses is very important, especially when an entity adopts accrual basis accounting. In day-to-day operations, we often encounter such key accounting terms. So what are accrued expenses? What is the proper accounting for accrued expenses? What is Accrued Expense? Accounting for accrued expenses properly is the key task for accountants. Before jumping
Accounting for Accrued Expenses? Practical Examples Read More »
Introduction Accounting for goodwill is normally applicable for Group Company where the parent company has bought or acquired its subsidiaries’ shares. There is specific formula for goodwill calculation. Before understanding how to account for goodwill and the subsequent impairment recognition, let’s understand the key definition of goodwill first. So what is Goodwill? Definition We commonly
Accounting for Goodwill: Overview and Example Read More »
Introduction Accounting for borrowing costs are crucial; especially when an entity has a large project to build and need source of fund from bank. When we borrow any fund from bank, the bank usually charges the interest which we commonly call it as finance costs as well as other charges associated with such borrowing. We
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In previous article, we have covered the definition of depreciation expense of property plant and equipment (PPE) as well as other fixed assets and the basic understanding on types of depreciation methods. In this article, we will further explain in detail of each type of depreciation method including the calculation, when to use it as
Four Types of Depreciation Methods Read More »
Introduction The account payable of a business refers to any credit it has taken from suppliers for any goods purchased or services obtained from them. The account payable is a liability for a business that it has to pay in a future point in time. As with any other system in a business, the account
Account Payable Control System, the Ultimate Guide Read More »
Introduction Behind every successful business there are great control procedures and systems that ensure the success of the business. Among these systems, the most important system is a good inventory control system for businesses with physical stock. Inventory or stock control helps businesses ensure that stock is always available for sale and use. It ensures
Inventory Control,The Ultimate Guide Read More »
When a business purchases a new fixed asset, the business cannot expense out all of the cost of the asset in the year of purchase. This is due to the matching concept which states that expenses should be matched to the year in which revenues are earned from them. Fixed assets help a business generate
What is Depreciation? Read More »
In the previous articles, we have talked about inventory as well as methods in valuing inventory. In this article, we will talk about the inventory costing. So what are the costing methods of inventory? Inventory costing is very crucial; especially for merchandising company as we need to present in the financial statements both in statement
Four Methods of Inventory Costing Read More »
