termscompared – Differences between finance terms and concepts

Difference between accrual and cash basis of accounting

Financial accounting involves measuring, presenting and reporting of financial transactions of an enterprise. The transactions are recorded in the books of accounts of the enterprise from which financial statements are subsequently drawn up. The recording of transactions in the books of accounts require adherence to certain accounting principles. There are broadly two methods of financial … Read moreDifference between accrual and cash basis of accounting

Difference between fixed cost and variable cost

Every enterprise incurs several types of costs while carrying out its business activities. It is necessary to allocate and analyse these costs to assess profitability and to understand how to manage and control them better. To achieve this, there is a need to bifurcate costs into different categories so that they can be rationally allocated … Read moreDifference between fixed cost and variable cost

Difference between chartered accountant and management accountant

Definitions and meanings: Chartered accountant: A chartered account is a professional accountant who studies and acquires experience in specialized fields of business to perform complex business engagements that are usually mandatory by a country’s law. Performing audits of public and private limited companies is an example of such engagements. Chartered accountants are normally members of … Read moreDifference between chartered accountant and management accountant

Difference between ROI and RI

Definitions and meanings: Return on investment: Return on investment (ROI) is a measure which calculates the efficiency of an investment by calculating percentage of return earned by that investment. Residual income: Residual income (RI) is the amount of income an investment opportunity generates above the minimum level of rate of return. Formulas and example: The … Read moreDifference between ROI and RI

Difference between cost accounting and management accounting

Accounting involves measuring, presenting and reporting of financial information of an enterprise. Accounting can further be segregated into types based on the information that they seek to report. These can include financial accounting, cost accounting, tax accounting and management accounting. These different types all have a similar theme that they revolve around disclosure of enterprise … Read moreDifference between cost accounting and management accounting

Difference between CA and ACCA

Introduction As the global economy develops and businesses grow, the need for qualified finance professionals to manage these businesses increase. These professionals work in wide ambit of finance related fields ranging from accounts to financial management to taxation and audit. There is also a need for regulating bodies and certifications to regulate the influx and … Read moreDifference between CA and ACCA

Difference between gross profit and net profit

Definitions and meanings: Gross Profit Gross profit is the excess revenue that is left with the business after recovering the total costs spent on the production or purchase of the goods sold. It is computed either as a part of income statement or by preparing a separate trading account. In accounting and finance, the cost … Read moreDifference between gross profit and net profit

Difference between periodic and perpetual inventory system

Definitions and meanings Periodic inventory system: A periodic inventory system is a system of inventory accounting in which real time updation of inventory balances are not made. In fact physical counting of inventory determines inventory position on completion of a specified period – usually once a quarter or once a year. In a periodic inventory … Read moreDifference between periodic and perpetual inventory system

Difference between economist and accountant

Definitions and meanings Economist: An economist is a professional who collates data from the economy, studies and analyzes it by applying economic theories and prepares reports thereon. Economists can study macroeconomic factors such as GDP, consumption, unemployment, inflation and price indices etc. They also study microeconomics factors such as consumer demand and supply, price fixing, … Read moreDifference between economist and accountant

Difference between accounting and auditing

Contents: Definitions and meanings Difference between accounting and auditing Accounting versus auditing – tabular comparison Conclusion Definitions and meanings Accounting: Accounting is a profession that involves measuring and recording of financial transactions of an enterprise. Accounting involves the following: Recording entries of income and expense transactions in the books of accounts of an enterprise Recording … Read moreDifference between accounting and auditing