There maybe some who are asking when will assets be recognized in the Financial Statement. Maybe asking how do we record it and what are the characteristics of an asset to be recognized. Before we dig in to that deeper, let us first try understand what...
What is income Statement?
An Income Statement or the Statement of Financial Performance is a formal statement showing the financial performance of certain business organization. It provides measurement of income earned by the...
There are some transactions that cannot be understand by merely looking on the Balance Sheet and Income Statement alone. Because of this, companies preparing financial statements must also includes disclosure of these transactions...
Accounting starts from the understanding of the rule on debit and credit. But what is really a debit and a credit of accounting transaction?
What is debit and credit?
The term "Debit" refers to the left side of an account whereas the term "Credit"...
Companies usually makes payment of some of their expenses in advance. This is done maybe because of a policy that needs to be followed or just because the paying company want to avoid making monthly payments. An example of prepaid expense is the payment...
What is Depreciation?
Depreciation is the systematic allocation of the Depreciable cost, Cost less salvage value, of property plant and equipment items over its estimated useful life. Its objective of computing the depreciation is to...
Variable Costing and Absorption Costing are two different method of presenting the income statement. Each of this two has its own advantages and disadvantages. These two methods are widely use by different companies and called for different names.
Variable...
