admin

Trade receivables are the amounts that a company will bill to its clients when it provides goods or services to them as part of their normal business activities (Also see Understanding Asset Conversion Cycle). Typically, companies will document these billings on formal invoices, and it will summarise those invoices in the accounts receivable ageing report. … Read moreWhat are Trade Receivables and Non-trade Receivables?

The balance sheet is one of the three financial statements, other than the income statement and statement of cash flows (Also see What is the Relationship between the Profit and Loss Statement and the Balance Sheet?). Some of the business owners may choose to do the accounting tasks by themselves, and when preparing the balance … Read moreAccounting – Preparation of Balance Sheet

Typically, the businesses which are in the form of sole proprietorship or partnership will use the drawing account. It is an accounting record that documents all the distributions made to the business owners. In fact, they are the funds that the business owners have drawn from the business, and this is where the name “drawing … Read moreUnderstanding Drawing Accounts

As a business owner, you have various types of assets in your company. One of the vital assets is current assets. The cash, cash equivalents (investments with high liquidity), or anything that you can turn into cash in a year are all your current assets. On the other hand, “other current assets” is a usual … Read moreWhat are Other Current Assets?

Financial accounting depends on a few basic concepts (Also see Common Concepts in Accounting) which possess notable effects on the procedures of accounting. Principles: Listed below are some fundamental principles in financial accounting. Matching Principle A company should match its earnings and expenditures within the period that it has earned and incurred the amount. Full … Read moreFinancial Accounting — Basic Principles, Conventions, and Assumptions