What is the objectivity principle?
According to the objectivity principle, financial and accounting data must be neutral and free of personal bias. This suggests that financial reporting, such as the … Read more
What is the consistency principle in accounting?
The consistency principle in accounting encourages accountants to prepare financial statements following the same accounting principles, techniques, practices, and procedures from one accounting period to … Read more
What is merchandise inventory?
Merchandise Inventory is the term frequently asked. Retailers, wholesalers, and distributors earn money by obtaining items from manufacturers or other suppliers and then marketing, or … Read more
Is retained earnings an asset?
It is the most frequent question being asked by accounting learners, “Is retained earnings an asset?” Typically, retained earnings reflect a corporation’s earnings from its … Read more
What is depreciation in accounting?
Depreciation in accounting is when you make a proportion of the depreciable amount and charge it in the income statement. The proportion is calculated by … Read more
What is the full disclosure concept principle in accounting?
Objective Full disclosure is an accounting concept to ensure the financial statement user gets all the relevant information. Definition This concept requires a business to … Read more
Accounts payable in accounting
Accounts payable is the balance that needs to be paid to the vendors/suppliers. It’s a credit balance in the balance sheet of the company. Following … Read more
bond retirement Journal Entry
The accounting for bond retirement is based on the principles of liability. In simple words, if the bond is retired, liability is removed from the … Read more
Temporary vs. Permanent Accounts: What is the Difference among them?
Accounting is one of the hardest aspects of corporate management. The intricacy of the accounts used to classify money movement is only one of the … Read more
What is the post-closing trial balance?
A post-closing trial balance is a statement that is a statement of all balance sheet accounts having a balance of greater than zero at the end … Read more
What is the test of details performed by auditor?
Test of details refers to tests/procedures performed by auditor to obtain sufficient and appropriate audit evidence on different items of financial statement. These items include … Read more
NSF check or Non-Sufficient Funds: What does it mean
Checks made on a bank account that does not have adequate money to pay the check are referred to as NSF check or “nonsufficient funds … Read more
Five threats to auditor independence
Threats to auditor independence must be reviewed before engaging any audit activity. In simple words, an audit must be conducted independently of the client’s management. … Read more
Freight in vs Freight out
The main difference between freight in vs freight out is that freight in is transportation expense incurred on purchasing the goods. On the other hand, … Read more
Representation letter in auditing
Representation letter is used by auditor to get confirmation from audit client that they have been fair in providing all the relevant information/explanation to the … Read more
What are In-kind Benefits?
In-kind benefits are any sort of benefits that are not related to money or currency and are given above the worker’s or director’s pay. Automobiles, … Read more
Recurring expense and Non Recurring Expense
What is meant by Recurring Expense? Recurring expense is also known as recurring costs as the name suggests are repeating expenses. They are brought about … Read more
Asset vs. Expense
For an effective business management, it’s necessary to understand asset vs. expense. So, If you have started up a business or already have one, you … Read more
What is a disclaimer of opinion?
Disclaimer of opinion meaning Disclaimer of opinion means that auditors were not able to make any opinion on the financial statement of the business. So, … Read more
Statement of owner’s equity
Statement of owner’s equity help to understand the current wealth owned by shareholders/owners. The movement of balance in the statement indicates whether the business has … Read more