Accounting

Accounts receivable aging report is an informative document for a business showing details about the receivables schedule from different clients. Let’s discuss how to calculate accounts receivable aging and how this report can help a business in different types of analysis. What is Accounts Receivable Aging? Accounts receivable aging refers to the time taken to …

What is Accounts Receivable Aging? How to Calculate Accounts Receivable Aging? Read More »

Horizontal or trend analysis is the historic review of the financial statements of a company for a specified period. Let us discuss what is horizontal analysis, how to perform it, and what are its advantages for the users. Horizontal Analysis – Definition Horizontal analysis refers to the historical comparison of financial statement items from one …

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The vertical analysis provides a correlation between one line item in a financial statement and its top-line or baseline item. It is calculated by adding a column in the financial statement and the results are shown in percentage terms. It offers valuable information to internal and external stakeholders and can be used in different situations. …

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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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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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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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Subletting and subleasing are similar rental agreements where a third party joins an existing arrangement between a landlord and a tenant. A sublet and sublease contract has some similarities and key differences. What is Sublet? A subletting contract allows a landlord or owner of a property to include a subletter in an existing leased contract …

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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 …

Is Deferred Revenue a Liability? Read More »