Category: Accounting

What is Income Statement?

Simply a statement showing income, expenses, and profit or loss of firm is called income statement. In technical terms it is a financial statement presenting income earned during a period and expenses incurred to generate that...

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Financial Reporting Standards

Financial reporting standards are periodically issued by International Financial Reporting Standard Board. These standards are meant to ensure uniformity in financial reporting to protect the interests of the investors...

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What is Accountant?

In history landlords used to appoint a literate person to write their financial information and to maintain accounts of their customers. The reason behind was that landlords himself were not capable for such functions or they...

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Fair Value Accounting

Assets are shown in the balance sheet at the historical cost i.e. cost at which they were acquired. But it is not the case always that the assets presenting the values in the balance sheet are actually worth for that. There may...

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Matching Principle

According to the matching principle of accounting expenses of the same period must be compared to or deducted from the income of that period to ascertain profitability. It is the matching principle which requires the use of...

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BookKeeping

Bookkeeping is the recording of financial transactions such as sales, purchases, receipts, and payments. The person liable to record is named as book keeper or accounting clerk. Book keeper is not an accountant. The difference...

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Bank Reconciliation

A statement of reconciling the balances between bank book and bank statement is called bank reconciliation statement. Bank book is maintained by the customer or account holder in his/her (usually business firm) books of accounts...

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Double Entry System in Accounting

A double entry system of accounting was devised with the concept that each transaction has dual effect. Two effects of each transaction are recorded on the basis of universally accepted debit and credit rules of accountancy....

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Cash and Accrual Basis of Accounting

Cash basis of Accounting In cash basis of accounting the prevailing concept is that transactions will be entertained on the actual receipt or payment of cash. More broadly income will not be booked until it is actually received...

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