Financial Accounting Concepts
Financial accounting is the process of recording, classifying, summarizing and communicating information about a business’s finances.
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The Rationale for Preparing Cash Flow Statement
Cash Flow Statement A cash flow statement is a report that measures and illustrates the company’s ability to generate revenues and meet its financial needs
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Closing entries to pass before preparing a Profit and Loss Account
Closing entries in accounting refer to the many entries that are made after an accounting year to eliminate the balances of all temporary accounts establis
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Methods of Preparing a Trial Balance
A trial balance is a listing of all the general ledger accounts in a company’s accounting system at a specific point in time. It shows the ending bal
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What are the Fundamental Accounting Assumptions?
Fundamentals accounting assumptions are the underlying assumptions that are presumed to have been followed while preparing financial statements. There are
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Trend Analysis – Meaning and Example
Trend analysis is the process of analyzing the financial statements by the computing trend of a series of information. With the help of the trend analysis
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Meaning and Accounting Treatment of Depreciation
Depreciation is the reduction in the value of an asset over time due to wear and tear, obsolescence, or other factors. Generally, the term ‘depreciation
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The Qualitative Characteristics of Financial Information
The qualitative characteristics of financial information refer to the attributes that make it useful for decision-making purposes. These characteristics in
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Characteristics of an Effective Financial Reporting Framework
Any effective financial reporting system needs to be a coherent one. Such frameworks have several characteristics: Transparency A framework should enhance
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What is a joint venture? | Methods of Recording Transactions
A Joint Venture (JV) is a temporary form of business where two or more people join together to meet short-term objectives. It is quite similar to a Partner
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Causes of disagreement in the Cash Book and Pass Book
1. (a) What is a Bank Reconciliation Statement? Explain the causes of disagreement in the balances shown by the Cash Book and Pass Book. (10) Solution: BAN