What Does Mean Substance Over Form?
In accounting, the phrase “substance over form” refers to a preference for the underlying truth of a transaction above its legal form. The accounting idea is that a transaction’s economic substance should take precedence over its legal structure. This principle ensures that financial accounts accurately reflect the economic substance of a transaction, regardless of its […]
What is Trade Discount in Accounting?
In accounting, a trade discount is a reduction in price a manufacturer or wholesaler offers a trade buyer on the list price of goods. Offering trade discounts is a standard practice in many sectors as a means of encouraging clients to make greater purchases or to develop long-term business partnerships. Purpose of Trade Discounts The […]
Capital Expenditure Vs Revenue expenditures in Accounting
Capital Expenditure Capital expenditures comprise costs incurred for the acquisition of a fixed asset, such as land, a building, a car, machinery, etc. It also includes any expenditures incurred thereafter that boost the earning capacity of an existing fixed asset. In addition to the cost of purchasing, the cost of acquisition also includes any additional […]