Introduction Basically, when we are talking about types of financial statements, we will firstly think about Income Statement, Balance Sheet, Statement of Changes in Equity as well as the Cash Flow Statements. Financial statements are basically arising from the the summary of business transactions as result of business activities during the course of day today …
Introduction When preparing financial statements; especially on the disclosure notes, we shall think of materiality. How should we disclose each item in the financial statements? Shall we put at lump sum amount or at separate notes? All of these questions would best describe about the materiality concept. So what is materiality concept? Definition The materiality …
Introduction When someone ask about when shall we recognize an expense in corresponding to the revenue, we will think of matching principle. So what is matching principle? Definition of Matching Principle Similar to the accrual basis of accounting, the matching principle is the basic concept refers to the recognition of expenses of any particular period …
Introduction The accrual accounting is one of the important concept in accounting that is widely used and referred to. Be for understanding about accrual accounting, let see on example below. Company ABC has paid a yearly rent in advance for US$30,000 on 01 January 2019. How would this payment shall be recorded? Shall the company …
