Differences Between Rights and Bonus Issues of Shares
When firms are attempting to raise new capital or distribute earnings to current shareholders, they issue extra shares in rights issues or bonus issues. In spite of distributing new shares as a method behind both approaches, they differ based on intent as well as shareholders’ effects. A rights issue enables existing shareholders to buy extra […]
Meaning, Benefits and Drawbacks of ABC Analysis
ABC analysis is a widely used inventory management technique that categorizes inventory into three groups: A, B, and C, based on relative importance. This method helps businesses prioritize their inventory based on its importance and significance, leading to several benefits. Also referred to as “Selective Inventory Control.” Strategies based on an ABC analysis: The ABC […]
What is an Income Statement? Components and Elements
An income statement is a financial statement that shows a company’s revenues and expenses for a specific period of time. The Income Statement analyses the success of a company’s activities; it provides investors and creditors with the information they need to determine a business’s profitability and creditworthiness. When total sales surpass total expenses, a business […]
What is the Statement of Retained Earnings?
Statement of Retained Earnings The Statement of Retained Earnings reconciles the Retained Earnings account from the beginning to the finish of the fiscal year. Retained earnings represent the amount of profit a business reinvests in itself (i.e., the profit that is not used to pay back debt or distributed to shareholders as a dividend). It […]
Some Basic Accounting Questions You Should Be Aware of
General Accounting Concepts If you are an accounting student, these questions must be helpful in ensuring that you know basic accounting concepts. 1. In business terminology, what does the term assets mean? Assets are resources. They are things that a business can put to good use. Cash, commodities, and even entire buildings are some examples. […]
What is a Bond? Why are they issued?
A bond is a financial instrument representing a loan by an investor to a borrower. The borrower may be a corporation, government, or any other entity. When you purchase a bond, you are lending money to the issuer, and he/she undertakes to repay you the amount of principal (the initial amount of the loan) on […]