Tag Archives: #BusinessFinance

How does capital expenditure affect the financial statements of a business?

Does Capital expenditure affect the financial statements of a business Capital expenditures are investments made by a business in long-term assets like property, plant, and equipment. These expenditures have important implications for a business’s financial statements: 1.Balance Sheet: Capital expenditures increase the assets of the business. Long-term assets, such as buildings, machinery, and equipment, are… Read More »

Is inventory asset classification current or non-current asset?

Inventory Asset Classification Inventories is typically categorized as a current asset in the balance sheet of a business. Inventory Asset Classification is because inventory expect to sell or consume within the normal operating cycle of the business, which is usually within one year. However, if the inventory is held for a longer period of time,… Read More »

What is a preliminary expense and how is it treated in a balance sheet?

What is a Preliminary Expense Preliminary Expense are the expenses that a company incurs before it starts its operations. These expenses are relate to the formation, registration, and organization of the company, such as legal fees, accounting fees, and other administrative costs. In accounting, preliminary expenses are treat as an intangible asset and are shown… Read More »

What is the balance sheet equation?

Balance Sheet Equation Balance sheet equation also known as the accounting equation, is a fundamental principle of accounting that states that the assets of a business are equal to the sum of its liabilities and owners’ equity. Mathematically, it can be represent as: Assets = Liabilities + Owners’ Equity This equation is always in balance,… Read More »

How does a write-off affect net income and net account receivable?

Write-off affect net income and net account receivable Write-off affect net income and net account receivable: A write-off is an accounting term used when a company decides that a particular asset, such as an account receivable, is unlikely to be collected. This can occur due to various reasons, such as customer insolvency or prolonged… Read More »

Q14. Elements of Bookkeeping: What is the four-element Bookkeeping system ?

Elements of Bookkeeping Website Link Elements of bookkeeping system: It also known as the double-entry accounting system, is a method of documenting financial transactions that involves recording each transaction in two separate accounts. The system consists of four elements: Assets: Assets are resources owned or controlled by a business that hold monetary value. Examples include cash,… Read More »

What is Bookkeeping?

Bookkeeping Definition Bookkeeping definition is the systematic process of recording, organizing, and maintaining the financial transactions and records of a business. It involves tracking all money that comes into and goes out of the business, ensuring that every financial transaction is accurately documented and classified. The primary objective of bookkeeping is to ensure that financial… Read More »

Why is bookkeeping a part of accounting?

Is bookkeeping a part of accounting Bookkeeping is considered a part of accounting because it is the foundation on which accounting is built. Bookkeeping involves the day-to-day recording and organizing of financial transactions such as sales, purchases, payments, and receipts. The goal of book-keeping is to maintain accurate and up-to-date financial records that can be… Read More »

What are Bookkeeping and Accounting services for a businesses Financial Management?

Bookkeeping for Financial Management Bookkeeping for Financial Management services that help businesses keep track of their financial transactions and ensure their financial records are accurate and up-to-date. Here is an overview of bookkeeping and accounting services for businesses: 1. Bookkeeping: Bookkeeping involves the day-to-day recording and organizing of financial transactions such as sales, purchases,… Read More »