Financial Accounting Concepts
Financial accounting is the process of recording, classifying, summarizing and communicating information about a business’s finances.
-
What is a Suspense Account in Financial Accounting?
A suspense account is a general ledger account that consists of certain transactions that cannot be immediately categorised under correct accounts. The cor
-
What is an Adjusted Trial Balance?
After adjusting entries are posted to the ledger and adjusting entries are recorded, an adjusted trial balance is compiled. This is the second trial balanc
-
What is Petty Cash in Accounting? Meaning and Purpose
Every business, regardless of size, has various expenses that need to be covered daily. These expenses are often small and frequently occur, such as office
-
What is Credit Risk?
Credit risk is a term used to describe the potential financial loss a lender may experience when a borrower fails to repay a loan or credit. In other words
-
What is Business Entity Concept?
The business entity concept is a fundamental accounting principle that defines a business as a separate economic entity from its owners. This principle is
-
The Impact of Inventory Control on Business Profitability
Efficient inventory control is key to keeping a profitable and smooth-running business. Strategic stock levels management prevents businesses from wastage,
-
What is the Cost of Goods Sold? Definition | Formula
Cost of Goods Sold (COGS) is a financial metric representing the cost of the products or services a company sells during a given period. It is an important
-
What is a Joint Venture? Meaning and Purpose
A joint venture is a business agreement between two or more parties to pool their resources to achieve a goal or undertake a specific project. The parties
-
What is a Fictitious Asset in Accounting?
When checking the financial statements of a company or solving an accounting problem you might have come across a term fictitious asset. The term “fi
-
What are sundry expenses?
Sundry expenses refer to all those small, miscellaneous expenses that businesses incur during their operations but don’t fall under any specific cate