Approaches to Asset Valuation Approaches to asset valuation, There are several methods commonly used for the valuation of assets. The selection of the approach relies on the characteristics of the asset and the intended objective of the appraisal. Here are some key methods of asset valuation: 1. Market-based Approach: This method determines the value of an… Read More »
Is depreciation a current liabilities No, Depreciation is a technique in accounting that spreads the cost of a tangible asset across its useful lifespan. It represents the wear and tear, usage, or obsolescence of the asset over time. For more information to visit: https://www.incometax.gov.in Here are the key points to understand about depreciation and its… Read More »
Tax planning vs accounting Tax planning vs accounting Website link Tax planning vs accounting: Tax planning and accounting are distinct but interconnected aspects of managing finances. Here’s a comparison between tax planning and accounting: Tax Planning: Focuses on minimizing tax liability and optimizing tax-related strategies to legally reduce taxes. Involves analyzing current and projected… Read More »
Prepaid Expenses It is considered as personal accounts in accounting because they represent an advance payment made by the business for goods or services. It will receive in the future. Personal accounts are those accounts that deal with individuals, firms or entities. That either indebts to the business or have lent money to the business.… Read More »
Methods of preparing Trial balance There are two common trial balance methods used for preparing trial balances: the Total Method and the Balance Method. Total Method: With the Total Method, the total of all debit balances and the total of all credit balances in each account can calculate separately. These totals then compare, and if… Read More »
Daybook Accounting Website Link Daybook Accounting: In accounting, a daybook (also known as a journal) is a primary record where daily transactions are initially recorded. It serves as the first step in systematically documenting accounting transactions. The daybook serves as the initial recording location for transactions before they are transferred to the general ledger… Read More »
Cash book and ledger Website link A cash book and ledger are both important accounting tools used to keep track of financial transactions, but they serve different purposes. A cash book is a record of all cash transactions that occur within a business, including cash inflows and outflows. It is used to record and reconcile… Read More »
Why is provision for depreciation not an expense Provision for depreciation is not considered as an expense but rather as a gradual reduction in the value of an asset over its useful life. Unlike immediate expensing, depreciation allows for the allocation of an asset’s cost over time. To visit- https://www.mca.gov.in/ Depreciation represents the decrease in… Read More »
Account Closure and Account Finalization Account closure and account finalization, Closing accounts and finalizing accounts are two separate processes in accounting, each with its own significance. Closing accounts involves the preparation of a company’s accounts at the conclusion of an accounting period, such as a month, quarter, or year. This process entails closing all… Read More »
Nominal Account In accounting, a nominal account is a general ledger account that is use to record revenues, expenses, gains, and losses for a specific accounting period. These accounts are also known as income statement accounts or temporary accounts. Because their balances are reset to zero at the end of each accounting period, typically a… Read More »