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 category. In this blog post, we will explore what sundry expenses are, their importance, and how they are accounted for. What do Sundry Expenses Include? Sundry expenses can include a wide range of costs, […]
What is Prepaid Expense? Journal Entry in Books
Prepaid expenses are expenses that a company or business pays for in advance but which have not yet been incurred or used. These expenses can include items such as rent, insurance premiums, and utility bills. Prepaid expenses are considered assets because they represent a future benefit to the company. When a company pays for a […]
What is the Matching Principle of Accounting?
The Matching Principle is a fundamental accounting concept that aims to ensure that expenses are recognized in the same period as the related revenues. It is one of the guiding principles of accounting and is essential for accurate financial reporting. The principle is based on the accrual accounting method, which records transactions when they occur, […]
Difference between trial balance and balance sheet
The balance sheet and trial balance are two of the most important financial statements in accounting. While they both play crucial roles in presenting a company’s financial position, they differ in scope and purpose. In this article, we’ll examine the differences between the balance sheet and trial balance. The Balance Sheet A balance sheet, also […]
What is Trade Discount? Treatment of Trade Discounts
Trade discounts are discounts given to customers who purchase goods or services in large quantities or on a regular basis. These discounts are meant to encourage customers to buy more from the seller, and they are often a percentage of the list price. In this blog post, we will explain what trade discounts are and […]
What is Del Credere Commission?
Del credere commission is a type of commission paid to a buyer’s agent or a commission agency in exchange for taking on the buyer’s credit risk. It is, in essence, a commission given to an agent in exchange for securing the buyer’s payment. This kind of compensation is often paid by the seller to the […]
What Do Mean Sundry Debtors and Sundry Creditors?
Sundry debtors and sundry creditors are words frequently used in the business world. These phrases describe the sums of money that a company owes to its suppliers and clients respectively. Business owners and managers should be aware of these words and how they affect their organisation’s financial statements. What are Sundry Debtors? Sundry debtors are […]
What are Liquidity Ratios? – Meaning and Formula
Liquidity ratios measure the short-term financial solvency of a business. Here the short term refers to a period of 12 months or lesser. Investors typically use liquidity ratios to determine the worth of a company’s assets. If the ratio is high, it means that there are more liquid assets available for quick conversion to cash […]
What are Current Liabilities? Meaning and Types
Liabilities are the obligations to pay money, render services, or deliver goods at a later date as a result of a previous transaction. This definition covers all liabilities covered in earlier chapters as well as any new liabilities. Liabilities are separated into current liabilities and long-term liabilities on the balance sheet. Meaning of Current Liabilities […]
What is the Modified Internal Rate of Return (MIRR)?
In an effort to solve some of the shortcomings of the IRR method, financial analysts have devised an alternate evaluation procedure that is comparable to the IRR but modified. The modified internal rate of return (MIRR) is a monetary indicator of an investment’s appeal. The IRR has a number of issues, but MIRR fixes two […]