Accounting

Assets are vital for any business as they can be a source of future revenue as well as can be a means of meeting its liabilities. Valuation of assets is an important part of both financial as well as tax accounting. Valuation of assets also plays an important role in gauging the net worth of … Read moreDifference between book value and fair value

In a business there are many financial transactions that need to be recorded and then further processed for the calculation of its profit or loss. When recording the financial transactions in business books, we need to know to the accounting language to record its transactions. According to dual aspect concept of accounting, each transaction taking … Read moreDifference between debit and credit

Every business encounters several incidents and occurrences each day. Some may be minor with limited impact whereas some maybe major with more far reaching impact for the business. Whether these occurrences find place in the books of accounts or not primarily depends on whether or not they have monetary impact on the business. This article … Read moreDifference between event and transaction

Liabilities are obligations of the business that have accrued as a result of past transactions. Simply put, liabilities are the monetary value of what the business owes to outside entities. Merely owning high value assets is not enough if the business also has high liabilities. Both assets and liabilities have to be viewed simultaneously to … Read moreDifference between current and non-current liabilities

Assets are resources owned by a business which are capable of converting into or producing monetary value. It is essential for every business to keep track of the value of its assets as against the value of its liabilities, to know where its finances stand. Assets are important to business as they are not only … Read moreDifference between current and non-current assets

One of the keys to manage a profitable business is to manage and control costs. Every type of business incurs various costs while its operations are underway. An important aspect of managing these costs is to understand their nature and to understand what factors impact them. This article looks at meaning of and differences between … Read moreDifference between variable and semi-variable cost

One of the basic objectives of all for-profit business entities is to to generate income or profit for their owners. The total income generated by a business can be segregated into two types – operating income and non-operating income. The operating income has the primary importance for any business i.e., it is the basic type … Read moreDifference between operating and non-operating income

The accounting cycle of an organisation encompasses all the steps that result in the presentation of financial statements of an organisation. This begins from charting of all accounts to journalizing to posting to drawing up of profit and loss account and balance sheet. This article looks at meaning of and differences between two steps of … Read moreDifference between trial balance and balance sheet

The financial statements of a business are derived from base books of accounts namely the ledger and trial balance. While the ledger is a comprehensive account wise record of business transactions, it is followed by the trial balance which compiles the list of all account balances to verify that the books of accounts are in … Read moreDifference between unadjusted and adjusted trial balance

Definitions and meanings: Notes payable: The notes payable is a liability account maintained in the company’s general ledger. When a company lacks cash, it may issue a promissory note to a financial institution or a vendor to borrow funds or acquire assets. In a promissory note arrangement, the borrower is the maker of the note … Read moreDifference between notes payable and accounts payable