Statement of changes in equity is one of the financial statements prepared by organizations at the end of each accounting year. Other statements that sum up the financial statements include the statement of financial position, income statement, cash flow statement, notes to account in addition to the statement of changes in equity. Statement of changes …
Financial statements are the beacon for the performance of any company. By viewing a company’s performance through the lens of financial statements, you’ll be able to make informed decisions on how you deal with such companies. Now, you should know that there are different types of financial statements. Each type helps the user, in …
This is a cost function relevant to cost accounting. The high low method is applied when there is the need to split total costs into its fixed and variable components. The high low method is straightforward to apply, all you have to do is to factor in the extreme level of activities (the highest …
Accounting is aimed at providing relevant financial information for users to make informed decisions. These users of accounting information are categorized into two and they are: Internal users, External users. Internal Users Of Financial Information These are the primary users of financial information prepared by the management of an entity. As the name …
Before learning how to read a trial balance, it is essential to understand what trial balance is, why it is important in the accounting cycle, and how to prepare it. In very simple terms, you will discover all of these and more by reading this post. So, let’s get started. What Is A Trial …
Accounting for purchases is a must-know if you are starting or working in a business involved in manufacturing or trading. In this post, I will guide you on what purchases signify in accounting, how to go about purchases accounting entry, we’ll also look into the special case of asset purchases accounting and the …
One of the subscribers to our free email newsletters sent a mail the other day. Why do assets equal liabilities? her message read. To answer this question, you will first need an understanding of the most important equation in accounting as well as the elements of the financial statements. The basic accounting equation …
The basic accounting equation is Assets equals Liabilities plus Equity i.e. Assets = Liabilities + Equity. But then: You can easily mistake asset and equity as meaning the same thing if you are not well-grounded in accounting. From my experience, people tend to think asset and equity represent the owner or shareholder’s interest …
Assets Vs Equity – Difference Between Asset And Equity Read More »
Starting out, you may categorize all monies spent in running your business under the general umbrella of “expenses”. Yes, they are expenses, but in accounting, there are different types of expenses. Knowing these types of expenses would help you in the preparation of sound financial statements and this is what you will learn the …
It is important for you as a business owner to understand the accounting elements. Fondly referred to as ALICE amongst accounting professionals, ALICE means Assets, Liabilities, Income, Capital (Equity), and Expenses. Particularly, you must be able to tell the difference between Assets and Expenses as you will be dealing with them frequently while running …
Asset Vs Expenses – Difference Between Assets And Expenses Read More »
