This Accounting category will cover various topics on accounting ranging from financial, management, and advance accounting.
What are Equity Shares? Equity shares, also known as ordinary shares, are stocks that shareholders can buy to receive ownership of a company. The proportion of their ownership depends on the fractional number of shares they hold of the total shares issued by the company. These shares also usually come with voting rights, which allows […]
Equity Shares: Definition, Types, and More Read More »
The term lease describes an arrangement where one party agrees to rent out their property to another. The party that owns the asset is the lessor, while the other party that holds and uses it is the lessee. Usually, the lessee pays the lessor a specific amount in exchange for using the asset. There are
Leveraged Lease: Definition, How It Work, and More Read More »
A check is a document that serves as an order to a bank to pay another party. Usually, an account holder will have a check book that they can use as a form to request this payment. Using this document, the account holder can make a request from their bank to use a specified amount
What is a Stale Check? Read More »
Companies need employees to operate and make profits. Some companies may have a few individuals as employees, while others employ thousands of people. However, using employees also comes with costs. These costs come in many forms, such as salaries, taxes, insurance contributions, pensions, etc. Most of these costs are inevitable for companies. However, these costs
Is Payroll Tax an Expense? All You Need to Know! Read More »
What is Market Cannibalization? Market cannibalization refers to a loss in revenues that companies suffer due to a new product. This new product disrupts a company’s existing products’ position in the market, which leads to losses for the company. Overall, the cannibalization or competition between two products does not increase the company’s market share despite
Cannibalization Rate: Definition and How to Calculate It Read More »
What is Throughput Accounting? Throughput accounting is a process used in management accounting that focuses on a company’s production efficiency. It looks at the rate at which a company converts its raw materials into finished goods and makes money from them. The purpose of throughput accounting is to identify any bottlenecks in a production process.
How to Calculate Throughput Accounting Ratio? Read More »
Most companies prepare their financial statements in their local currency. This currency is the same in which these companies transact. For example, a company that reports its financial statements in dollars may also conduct its operations in the same currency. For some companies, however, the same may not apply, as these currencies may differ. Some
Functional Currency Read More »
For companies that sell products, inventory makes up a large portion of their assets. This inventory may include any stock that companies use to manufacture products. It constitutes both raw materials and finished goods. For some companies, any items that are still a part of the production process are also a part of the inventory,
Accounting for Destroyed Inventory Read More »
What is a Lease? A lease is a contract between two parties for the right to use an asset. These parties include the lessor and the lessee. Firstly, the lessor is a company or business that owns an asset. In contrast, the lessee is an individual, business or company that uses the asset owned by
Operating Lease vs Finance Lease Read More »
What is Collateral? The term collateral represents an asset that one party offers as security in exchange for receiving a loan. The party offering collateral is the lender that owns the asset. The counterparty is the lender that accepts collateral. This collateral may come in as fixed assets, such as property, equipment, vehicles, etc. Some
Accounting for Collateral: With Example Under US GAAP – ASC860 Read More »
