What Does Mean Reconstitution of Partnership?
Reconstitution of partnership refers to a change in the existing structure or terms of a partnership firm while keeping its business operations intact. It takes place when the relationship between the partners changes, thereby changing their rights, obligations, or capital contributions. However, the name of the partnership firm remains unchanged. Reconstitution can be due to […]
What is Receipts and Payments Account?
A receipts and payments account is a type of financial statement, summarizing all cash and bank transactions of an organisation for an accounting period. Although it is often prepared by non-profit making organizations, clubs and societies, helps in recording cash inflows and outflows without emphasis on profit or loss. Its principal purpose is to offer […]
What are consolidated financial reports?
Consolidated financial reports are general statements of the parent company and all other subsidiaries in just one financial report. These statements serve to depict the consolidated position of a company overall, comprehensively describing its entire financial health, and encompassing all its different forms of entities and activities. Consolidated financial reports are most used by investors, […]
Key Differences Between Revenue and Income
Revenue and income are two common terms seen on the Profit and Loss account or income statement of a company. Most students non-accounting persons don’t usually understand the difference between both terms. These terms depict two different aspects of a company’s financial health for any person associated with finance or business management. While revenue and […]
What Are ESG Reporting Frameworks?
Companies need Environmental, Social, and Governance or ESG reporting frameworks to express their sustainability and ethical performance. The significance of sustainability in businesses and in responsible investing cannot be overstated. As a result, companies’ stakeholders, customers, and regulators demand that they disclose more about their ESG performance. Companies are able to secure a structured way […]
How AI is Making the Work of Accountants Easier
Artificial Intelligence is changing the face of industries in all directions, and accounting is definitely not excluded. Artificial intelligence can help accountants deal with large volumes of data easily, minimize human error, and improve overall productivity, from repetitive tasks to complex data insights. In this article, we have discussed some of the prominent ways in […]
Benefits of Issuing Debentures Rather than Shares
Companies raising capital to raise funds in order to expand are at liberty to opt for shares or debentures. While both can raise the needed capital, oftentimes debentures offer more benefits compared to shares, especially to businesses that require maintaining tight control and want to maintain costs. In this article, we have discussed a few […]
What is Economic Batch Quantity? With Example
Economic batch quantity (EBQ) is a crucial concept that determines the most cost-effective quantity of units to produce in a single batch or production run. By optimizing the batch size, businesses can minimize their overall production costs, considering factors such as ordering, setup, carrying, and unit costs. Understanding EBQ and Its Significance Economic Batch Quantity […]
Difference Between Net Profit and Gross Profit
Profit is one of the most significant measures of a company’s financial well-being, but profits differ. Two critical metrics—gross profit and net profit—serve distinct purposes when assessing a firm’s performance. Gross profit is the profit after excluding the direct costs of goods or services manufactured, whereas net profit is the actual profit after deduction of […]
What is the Going Concern Concept?
The going concern concept is a principle that assumes a business entity will continue operating for the foreseeable future, typically in the next 12 months. This signifies that the company doesn’t plan or anticipate ceasing operations, liquidating its assets, or significantly reducing its business scale. Why is the Going Concern Concept Important? This concept is […]