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Cash Flow Statement and Its Dynamics
Meaning of Cash Flow Statement Financial statements like Profit and Loss Account, Balance Sheet and Shareholder’s Equity Account cannot answer the questions regarding the cash of a company. A company in operation generates cash from different sources and uses it for different activities. Such details of sources and uses of cash in an organization are…
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Balance Sheet: Things to Know About It
Balance Sheet A balance sheet is a statement, not an account, prepared to show the financial position of a company at a point of time. It is a statement showing the status of capital, liabilities and assets of a company. It is called a Balance Sheet as it balances out the equational relationship of Assets…
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Profit and Loss (P/L) Account – A Precise View
Concept of P/L Account Profit and Loss Account is a financial statement prepared after the preparation of the Trading Account. SO, this can be regarded as the second step in the preparation of a financial statement. The profit and loss account is prepared by adding all the indirect incomes to Gross Profit or Gross Loss…
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Trial Balance and Its Accounting Aspects
Concept of Trial Balance Before learning about trial balance, we have to recall the concept of Journal and Ledger. Journal is the book of primary entry recording the debit and credit aspects of a transaction identifying the respective impacted account. Ledger is the next step after the preparation of the journal. Ledger is the classified…
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Petty Cash Fund and Its Recording
Different expenses have to be incurred by an office. Most of such expenses are paid through cheque. But some small amount expenses cannot be paid by cheque. This includes expenses like postage, taxi fare, envelopes, tea for guests etc. These expenses have a very small amount and cannot be paid by issuing a cheque. To…
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Share : Understanding Its Basics
Meaning of Share Share is the smallest unit of the total capital of a joint-stock company. It is sold to the public so as to raise cash for the business. It can also be said as the smallest unit of company ownership. The person who purchases this smallest unit and provides funds to the company…
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Depreciation In Context Of Fixed Assets
Concept of Depreciation Every business owns some fixed assets. Fixed assets are those assets of permanent or long-term nature purchased to increase the production or productivity of a business. These are not for sale during the ordinary course of business. However, these can be disposed of off when they are not needed by the business.…
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Inventory Management – Things To Know
A business needs different types of materials to produce goods or services. These are called inventory. Such inventories could be in the form of raw materials, work in progress and finished goods. If such inventories are not available in time and required quantity, it hinders the production and sales proceeds of the company. Similarly, overstocking…
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Internal Check – AN Overview
An internal check is a part of internal control. It is concerned with the arrangement of duties of various employees of a business in such a way that the work of one employee is automatically checked by another employee. It is the mechanism set to identify mistake conducted by one employee by another employee and…