What is the Realization Concept in Accounting?
Definition The realization concept or the revenue recognition principle in accounting is a method used by accountants for recording revenue earned by the business. This … Read more
Definition The realization concept or the revenue recognition principle in accounting is a method used by accountants for recording revenue earned by the business. This … Read more
Substance over form principle states that transaction should be recorded based on realism (substance). If there is a conflict between realism and form (legal aspects), … Read more
The name trading account is given to a ledger account used by trading business firms to aid in the formation of income statement and balance … Read more
Definition Accounting conventions are the set of guidelines that companies use to record financial transactions. These conventions play a vital role in the entire accounting … Read more
Definition Accumulated losses are losses incurred by the business in the past. These losses are adjusted against shareholders’ equity. These losses lead to a decrease … Read more
Definition Period cost is the cost that is not based on the one-time transactional event rather it is incurred over specific time. These costs are … Read more
Investment Portfolio Diversification Meaning Investment portfolio diversification is a finance term used frequently by investors and businesses. The portfolio is a combination of financial investments. … Read more
Definition Forensic accounting is about investigating financial fraud/crime. It involves detailed understanding of the business processes, operations, working dynamics, background checks, and many more things … Read more
Definition Businesses uses throughput accounting as an intelligent mechanism to plan production. The purpose of using this accounting approach is profit maximization. This concept is … Read more
Gross margin vs contribution margin can be an excellent metric to understand business profitability potential. What is Gross margin? Gross margin is about profit strength … Read more
Original documents containing details about a business transaction are referred to as source documents. The source document contains vital information such as the date and … Read more
Definition Drawings in accounting refer to the withdrawal from a business by its owner in the form of cash or any other asset aimed to … Read more
Unpresented cheque is the cheque that has not been presented to the bank. Although the business has written and accounted for the cheque in their … Read more
Uncredited cheques are the cheques that have been collected by the business and recorded as the receipt of cash in the business books. However, the … Read more
Definition and explanation Price level accounting seeks to adjust financial statements due to fluctuation in the value of the currency. The currency fluctuation may be … Read more
Analyzing business transactions is the basis of a strong financial reporting framework. The posting of accounting transactions in the accounting record leads to changes in … Read more
Profitability ratios help understand the profitability of a business at different stages of the income statement. For instance, the gross profit ratio helps to understand … Read more
Businesses generate revenue from rendering services and the sale of tangible products. Income generated from service rendered is referred to as service revenue. The transaction … Read more
Consolidation, mergers, and joint ventures are the concepts of the business when a business acquires another business. The arrangements may be different from company to … Read more
GAAP refers to generally accepted accounting principles. It’s a set of procedures, accounting principles, and accounting standards related to business reporting and financial accounting. The … Read more