Internal liabilities Internal liabilities, also known as intra-company liabilities or intercompany liabilities, refer to the debts or obligations that exist between different entities or divisions within the same company or group of companies. These liabilities arise due to financial transactions or arrangements between various internal entities. Internal liabilities can take several forms, including: Intercompany… Read More »
Office expenses Office expenses are typically classified as operating expenses and are included in the income statement of a company’s final accounts. Operating expenses are the day-to-day expenses incurred in the normal course of business operations, such as rent, utilities, office supplies, and salaries. These expenses subtract from the company’s revenue to arrive at its… Read More »
Credit Note and Debit Note A credit note and debit note are both types of accounting documents used to record transactions between two parties. A completed credit note is a document that is issue by a seller to a buyer when goods or services are return, or when the price of goods or services… Read More »
Meaning of accountancy Accountancy is a field of study and practice that deals with the measurement, processing, analysis, and communication of financial information about a business or organization. It involves the recording, classifying, summarizing, and interpreting of financial transactions to provide useful information for decision-making.The meaning of accountancy is very clear. To visit: https://www.incometax.gov.in Accountancy… Read More »
Depreciation expense or loss Depreciation is considered an expense in accounting, but it is not the same as a loss. In accounting, depreciation is the process of allocating the cost of a long-term asset over its useful life. It is an expense that represents the reduction in the value of the asset over… Read More »
Current assets to proprietor’s fund ratio The current assets to proprietor’s fund ratio is a financial metric used to assess the liquidity and financial health of a business. It measures the relationship between the current assets, which are assets that expect to convert into cash within one year, and the proprietor’s fund, which represents the… Read More »
Capital structure Capital structure refers to the composition of a company’s sources of funds, including debt, equity, and other forms of financing. It represents the way a company finances its operations, growth, and investments. The way a company finances its operations, known as its capital, is crucial as it affects the company’s financial performance, level… Read More »
Prepaid expenses vs preliminary expenses Prepaid expenses vs. preliminary expenses are two different types of expenses in accounting. It refer to the expenses that have been paid in advance but will incur in the future. Examples of prepaid expenses include prepaid rent, prepaid insurance and prepaid advertising. These expenses record as assets on the balance… Read More »
What is Input Tax? Input tax refers to the VAT (Value Added Tax) or GST (Goods and Services Tax) that a business pays on its purchases of goods and services. This tax is paid to suppliers and is recoverable against the VAT or GST a business collects from its customers. Essentially, input tax is the… Read More »
Working capital management Working capital management refers to the administration of a company’s short-term assets and liabilities to ensure it operates efficiently and maintains adequate cash flow. It plays a crucial role in a company’s financial health by balancing liquidity (the ability to meet short-term obligations) with profitability. By optimizing working capital, businesses can sustain… Read More »
