Basic Accounting
Meaning of Capitalized in Accounting
Meaning & Explanation
In accountancy, capitalization means recording a cash outflow as an asset in the balance sheet. Rather than recording it as a one-time...
What is Write off or Expense off in Accounting?
Meaning & Explanation
In layman's terms, write-off or expense-off simply means disregarding something as insignificant or eliminating something.
The term write-off or expense-off refers to the...
Goodwill
Meaning and Example
Goodwill refers to an intangible asset that facilitates a company in making higher profits & is a result of a business's consistent...
What is Net Profit and Net Loss?
Net Profit and Net Loss
A business may earn from various different operating and non-operating sources. Furthermore, it may pay for several different continuous and one-time events....
What is Gross Profit and Gross Loss?
Gross Profit and Gross Loss
A business may earn money from various different operating and non-operating sources. Similarly, it may spend on several different ongoing...
Trading Account with Format and Example in Accounting
Meaning and Overview
Type of Account
Trading Account Format (download PDF/Excel)
How to Prepare a Trading Account?
Items in a Trading A/c
Purpose...
What is Management Accounting?
Management Accounting
The word "management accounting" is a combination of two words "Management" & "Accounting", in layman terms this means accounting for internal management. Also known...
What are Qualitative Characteristics of Accounting Information?
Qualitative Characteristics of Accounting Information
There are some qualities of accounting that make it useful for both external and internal users of accounting. Without these...
What is an Accounting Period?
Accounting Period
Also known as a financial period, period of account, accounting year, financial year, etc. the period for which a business prepares its accounts...
What are Modern Rules of Accounting?
American or Modern Rules of Accounting
There are a couple of ways to approach the art of accounting, traditional and modern. Classification of accounts under...
What are the Three Types of Personal Accounts?
Three Types of Personal Accounts
Real, Personal and Nominal accounts are the traditional classification of account types in accounting, however, personal accounts are further distinguished under...
What are Revenue Receipts?
Revenue Receipt
Revenue receipts are funds received by a business as a result of its core business activities. It leads to an overall increase in...
What are Capital Receipts?
Capital Receipts
Capital receipts are funds received by a business which are not revenue in nature & lead to an overall increase in the total...
How to Prepare a Journal Entry? (Steps)
Steps to Prepare a Journal Entry
Journalizing is the process of recording a business transaction in the accounting records (Journal Book). The process to prepare...
What is Balance B/D and Balance C/D?
Balance B/D and Balance C/D
In bookkeeping, Balance B/D and Balance C/D are terms used for balancing and closing of ledger accounts from the current period to...
What is Balance B/F and Balance C/F?
Balance B/F and Balance C/F
In bookkeeping, Balance B/F and Balance C/F are a couple of accounting jargon used while journalizing. They play a role...
What are Trade Receivables and Trade Payables?
Trade Receivables
It is the total amount receivable to a business for sale of goods or services provided as a part of their business operations....
What is Ratio Analysis?
Ratio Analysis
Ratio analysis is a process of carefully studying the relationships between different data sets inside a company's financial statements with the help of...
What are Accounting Ratios?
Accounting Ratios - Definition
Accounting ratios are mathematical expressions demonstrating a relationship between two independent or related accounting figures. Such ratios are calculated on the basis...
Who are the Users of Accounting Information?
Users of Accounting Information
Accounting is the language of business, it brings life to the otherwise lifeless business activities. It acts as a bridge between users...
What is Bookkeeping?
Bookkeeping
Bookkeeping is the process of recording all financial transactions of a business unit in a systematic way on a day-to-day basis. Most common examples of...
What is Posting?
Posting From Journal to Ledger
The procedure of transferring an entry from a journal to a ledger account is known as posting. It involves transferring...
What is Authorized Capital?
Authorized Capital
Maximum value and amount of total shares that a company is authorized to issue legally is termed as authorized capital or authorized share...
What are Reserves?
Reserves in Accounting
At the end of a financial year when a company earns a profit certain portion of it is retained in the business...
What is Return Outwards?
Return Outwards
Return outwards are goods returned by a customer to the seller. They are goods that were once purchased from external parties, however, because...
What is Capital?
Capital
In its simplest form, capital means the funds brought in to start a business by the owner(s) of a company. It is an investment...
What is Return Inwards?
Return Inwards
Return inwards are goods returned to a business by its customer(s). They are goods which were once sold to external third parties, however,...
What is Debit Balance and Credit Balance?
Debit Balance and Credit Balance
A ledger account can have both debit or a credit balance which is determined by which side of the account...
What is Cost of Goods Sold or COGS?
COGS - Cost of Goods Sold
The Cost of Goods, also known as COGS or Cost of Sales, is the actual cost of the commodities...
What are Accruals?
Definition
To understand Accruals we need to understand the meaning of the word accrual, which is "The act of accumulating something". Accruals are mainly related to...
What are Drawings and its Journal Entry (Cash, Goods)?
Drawings
In accounting, assets such as Cash or Goods which are withdrawn from a business by the owner(s) for their personal use are termed as...
What are Three Major Financial Statements?
Three Major Financial Statements
Financial statements act as a report card for a business. The three major financial statements are prepared as a summary of...
What is Working Capital?
Working Capital
Also known as working assets, it is part of the total capital which is currently employed in a company's day-to-day operations. Cash or liquid...
What is a Compound Journal Entry?
Compound Journal Entry
Compound means a thing that is composed of two or more separate components. Similarly, when used in accounting, a compound journal entry...
What is Trade Discount?
Trade Discount
A reduction granted by a supplier of goods/services on list or catalogue price is called a trade discount. This is done due to...
What is Cash Discount?
Cash Discount
A cash discount is a deduction allowed by the supplier of goods or by the provider of services to the buyer from the...
What is a Voucher?
Voucher
A document that serves as evidence for a business transaction is called a Voucher. Sometimes, mistakenly seen as just a bill or receipt; it...
What is the Accounting Equation?
Accounting Equation
It wouldn't be wrong to say that this equation is the basis of all accounting. The Accounting Equation is based on the dual aspect...
What are Three Golden Rules of Accounting?
Overview and Meaning
Three Golden Rules
Examples
How to use
Modern Approach
Quiz
Revision Video
Practice
PDF Download
Conclusion
Overview and Meaning
In the general...
What is the Accounting Cycle?
Accounting Cycle or Accounting Trail
The accounting cycle is a chronological order in which an accounting process flows. It is a step by step process followed...
What is Double Entry Accounting System?
Double Entry Accounting
According to the dual aspect principle of accounting, business is a separate independent entity. Double-entry accounting system includes receiving benefits from some...
What are Accounting Principles?
What is the Principle of Income Recognition?
What is the Dual Aspect Principle?
What is the Principle of Expenses?
What is the Modifying...
What are Bad Debts?
Bad Debts
In a business scenario, amounts which are overdue to a business owner by the debtor(s) and declared irrecoverable are called bad debts. Few reasons...
What are Different Accounting Concepts?
What is Business Separate Entity Concept?
What is the Going Concern Concept?
What is Money Measurement Concept?
What is Periodicity Concept?
What is...
What is the Accounting Process?
Accounting Process
The word "Accounting" brings along with itself thousands of years of history and can be traced back to ancient times. There are proofs...