What are different types of annuities
Annuities are financial instruments that guarantee a regular income stream, normally utilized for retirement planning. They are provided by insurance firms and exist in several forms, each serving different financial objectives and risk tolerances. The most common annuity types are fixed, variable, indexed, and immediate or deferred annuities. A fixed annuity offers a guaranteed return, […]
Treasury Bills and Commercial Paper Explained
Treasury bills, or T-bills, are short-term financial securities issued by both the federal and provincial governments having maturities of up to one year. Treasury bills typically have maturities of a few weeks to a few months, with the most common maturities being 91 days, 182 days, and 364 days. Treasury bills do not carry periodic […]
What is the Revenue Recognition Principle?
The revenue recognition principle directs a business to recognise revenue in the period in which it is earned; revenue is not considered earned until a product or service is provided. This means that revenue is recognised during the period in which the service was rendered or the product was delivered to the customer. There is […]
What is Accounting Information System?
Today, when we refer to an accounting information system (AIS), we typically imply a computerised accounting system, as computers and computer software that assist us in processing accounting transactions have become quite affordable. The benefits of adopting a computerised accounting system outweigh the costs of obtaining one, and most businesses, including the smallest ones, can […]
Top 10 Accounting Software for Indian Businesses
If you are an owner of a small business or a self-employed individual, then you must know that accounting can be a real pain. Keeping track of your finances, analysing them, and reconciling them is no easy task. This is where accounting software comes in handy. The world has become digital, and it’s now more […]
Top 10 Accounting Software | Cloud and Desktop
Whether you operate a small business or a large corporation, the proper accounting software can simplify bookkeeping, calculate taxes automatically, and offer real-time financial data. With technology advances, companies today have the luxury of choosing between cloud-based and desktop accounting applications, both of which provide advantages in terms of accessibility, security, and functionality. Here we […]
What is the Margin of Safety? Margin of Safety Formula
The Margin of Safety (MoS) refers to the difference between the actual/target output and the break-even level of output/quantity. The margin of safety (MOS) ratio equals the difference between budgeted sales and break-even sales divided by budget sales. The margin of safety indicates how much a company may lose in sales before it starts losing […]
Earnings Per Share | How to Calculate EPS?
Earnings per share (EPS) represents the proportion of a company’s net income assigned to each outstanding share of ordinary stock. Many financial professionals believe that EPS is the essential metric for determining the market price of a stock. Earnings per share that are high or rising can cause a stock’s price to rise. Inversely, declining […]
Job Order Costing versus Process Costing
Job order costing is a form of accounting that attributes individual costs directly to a completed job or service rather than to the manufacturing department. It is utilised when things are created to order or when it is simple to trace individual expenses to specific activities, presuming that the additional information adds value. Under these […]
What are the Opportunity Costs? Meaning and Examples
Opportunity costs refer to the benefits lost or profits that are sacrificed while choosing an option over another one that has been chosen. When choosing between two alternative options, only one can typically be chosen. When this occurs, you may incur opportunity costs for choosing one option over another. For instance, if you are deciding […]