Tag: Accounting
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Bill of Exchange
What is a Bill of exchange? Bill of Exchange-Goods are often sold or bought for cash or on credit. When goods are sold or bought for cash, payment is received immediately. On the other hand, when goods are sold/bought on credit the payment is deferred to a future date. In such a situation, normally the…
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Difference between Provisions & Reserves
Difference between Provisions & Reserves- Provisions are certain expenses/losses that are related to the current accounting period but the amount of which is not known with certainty because they are not yet incurred. It is necessary to form a provision for such items for ascertaining true net income. For example, a trader who sells on…
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Petty Cash Book in Accounting
Petty cash book in accounting – In every organization a Petty Cash Book is maintained by many small payments such as conveyance, cartage, postage, telegrams, and other expenses (collectively recorded under miscellaneous expenses) made. These are generally repetitive in nature. If all these payments are handled by the cashier and are recorded in the main…
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Depreciation Meaning
What is a Depreciation? Depreciation meaning- The decline in the value of a fixed asset due to use, the passage of time, or obsolescence. if a business enterprise procures a machine and uses it in a production process then the value of the machine declines with its usage. Even if the machine is not used…
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Trial Balance
What is a Trial Balance? A trial balance is a statement showing the balances, or a total of debits and credits, of all the accounts in the ledger intending to verify the arithmetical accuracy of posting into the ledger accounts. Trial balance is an essential statement in the accounting method as it indicates the final…
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Bank Reconciliation Statement
A Bank Reconciliation Statement is the comparison made between the bank balance & as shown in the firm’s cash book, the two balances do not tally. Hence, we’ve to first ascertain the causes of the difference and then reflect them during a statement called the Bank Reconciliation Statement to reconcile (tally) the two balances. A…
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Books of Accounts
Books of Accounts- It means determining what transactions to record, i.e., to identify events that are to be recorded. It involves observing activities and selecting those events that are of a considered financial character and relate to the organization. The business transactions and other economic events, therefore, are evaluated to decide whether it’s to be…
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Recording Transactions in Accounting
Introduction of Recording Transactions in Accounting In the realm of financial management, recording transactions in accounting holds paramount importance. It’s the cornerstone of accurate and transparent financial reporting, allowing individuals and businesses to maintain a clear overview of their monetary activities. This comprehensive guide delves into the intricacies of recording transactions in accounting, shedding light…
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Benefit & Role of Accounting
Benefit & Role of Accounting Standards