Nature of Capital Reduction Account Nature of Capital Reduction Account, It is a special type of account that is create when a company reduces its share capital. The nature of capital reductions accounts is to record the reduction in the company’s share capital, which typically occurs when the company buys back its own shares or… Read More »
Working Capital vs Operating Expenses Working capital and operating expenses are two different financial concepts in accounting that represent different aspects of a company’s financial performance. For more information to visit:https://www.mca.gov.in Working-capital represents the amount of money that a company has available to cover its day-to-day operations and short-term obligations. It is a crucial metric… Read More »
Difference between capital and equity Difference between capital and equity What is Capital? Capital refers to the resources or assets that a business or individual uses to generate income or grow wealth. It can take various forms, such as: Cash: Money that is available for immediate use. Assets: Machinery, real estate, or other… Read More »
Capital Exp. Vs. Working Capital: Capital expenditure It refers to the money spent on long-term assets that are expected to provide benefits for more than one accounting period. These assets include property, plant, and equipment (PP&E), intangible assets, and investments. Capital expenditure is recorded on the balance sheet as an asset, and the cost… Read More »
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 »
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 »
Difference between Depreciation and Capital Loss Depreciation and capital loss are two different concepts in accounting. Depreciation is the term used to describe the reduction in the value of an asset as a result of factors such as wear and tear, obsolescence, or other similar reasons, over a period of time. It is a non-cash… Read More »
Financial Assets Financial assets refer to any asset that is primarily based on financial value and is expected to provide future economic benefits to the holder. Examples of these asset include stocks, bonds, bank deposits, mutual funds, exchange-traded funds, derivatives, and insurance policies. These assets can be trade on financials markets, and their value can… Read More »
