Difference between current assets and current liabilities The measure that reflects the difference between current assets and current liabilities is called working capital. Working capital is calculated by subtracting the total current liability of a company from its total current asset. It is an important metric for businesses to monitor, as it indicates their ability… Read More »
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 »
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 »
Input tax Input tax is a type of credit that a business can claim against the taxes. It has paid on the purchases made for its business operations. It considers as an asset under the GST regime because it is a recoverable tax credit and can use to offset the output tax liability, thereby reducing… Read More »
Examples of contingent liabilities Contingent liabilities are potential obligations that may arise in the future, depending on the outcome of a future event. Examples of contingent liabilities include: To visit https://www.mca.gov.in 1.Lawsuits or legal claims against the company 2.Product warranties or guarantees that may need to be honored in the future 3.Environmental liabilities, such as… Read More »
Is provision a Long-Term Liability Is provision a Long-Term Liability: It is a liability that is recognize when there is a probable obligation or liability that may result from a past event, and the amount of the obligation can be estimate with reasonable accuracy. Provisions can be either short-term or long-term depending on the time… Read More »
Contingent Liabilities Contingent liabilities can verify by reviewing the company’s financial statements and related disclosures. Companies are required to disclose significant that liabilities in their financial statements, along with a description of the nature of the liability and the likelihood of it being realized. The notes to the financial statements may also include information about… Read More »
Share capital Liability Share Capital Liability, No, it is not a liability. It is a part of the company’s equity and represents the amount of money that shareholders have invested in the business by buying its shares. Share capital is shown on the balance sheet under the shareholder’s equity section. It represents the… Read More »
How are Sundry expenses treated in a balance sheet Sundry expenses are generally treated as an expense in the income statement of a business and are deducted from the revenue earned to arrive at the net income or profit for the period. They do not appear as a separate item in the balance sheet. But… Read More »
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 »