Absorb refers to the assimilation or incorporation of amounts in an account or group of accounts, effectively blending them and causing them to lose their individual identity.
Accounting concepts refer to the basic theoretical ideas that support accounting practices. These concepts ensure consistency, relevance, reliability, and understandability in financial reporting.
Comprehensive exploration of the fundamental concepts that underlie financial accounting practices, including historical context, key principles, examples, related terms, FAQs, and much more.
An in-depth look at the accrual basis of accounting, its historical context, key principles, importance, applicability, and related terms.
An in-depth explanation of the Accrual Concept in accounting, its historical context, applications, examples, and relevance in financial reporting.
A comprehensive examination of accrued charges, including historical context, key events, explanations, mathematical formulas, and more.
Accrued Revenue refers to income that has been earned but not yet received in cash or recorded at the end of an accounting period.
All-purpose financial statements, also known as general purpose financial statements, provide comprehensive information about an entity's financial position, performance, and changes in financial position.
An in-depth exploration of Allowance for Doubtful Accounts, including historical context, types, key events, detailed explanations, mathematical models, charts, importance, and applicability.
A comprehensive guide to understanding the Allowance Method, which estimates bad debts and creates a provision for them in accounting.
Comprehensive coverage on the concept of amortization, its applications, mathematical formulas, historical context, and importance in finance and accounting.
APB stands for the Accounting Principles Board and the Auditing Practices Board, pivotal entities in the realms of accounting and auditing.
Detailed exploration of appropriated retained earnings, their purpose, types, examples, historical context, applicability, comparisons, related terms, FAQs, and references.
Understanding Asset Turnover - A crucial financial ratio that measures the efficiency of a company's use of its assets to generate sales.
Audit Adjustments are adjustments suggested by auditors during an annual financial statement audit that may not necessarily lead to restatements.
Backlog Depreciation refers to the additional depreciation that arises when an asset is revalued and its accumulated depreciation increases. It is a significant concept in accounting that reflects the accurate value of assets over time.
The balance sheet date is the date at the end of the reporting period for which financial statements are prepared, assessing the financial position of an entity.
An in-depth look at Basic Earnings Per Share (EPS), a key financial metric used to assess a company's profitability without considering the potential dilution from outstanding obligations.
A comprehensive guide to understanding Basic EPS, its calculation, significance, and applications in financial analysis.
A way of analyzing a budget and presenting financial statements under major headings, each managed by a particular manager, sometimes involving responsibility for multiple budget expenditure heads.
A comprehensive guide to understanding Budgeted Cost, its importance, applications, and related concepts.
Cash Flow from Investing Activities (CFI) includes cash flows related to the acquisition and disposal of long-term assets. Learn about its types, significance, and how it impacts financial statements.
A comprehensive guide to understanding cash inflows and outflows, their definitions, types, and implications in financial management.
A comprehensive guide to understanding COGS (Cost of Goods Sold), including its historical context, calculations, and significance in various sectors.
An account used to record commissions paid by an organization to agents and others. In a double-entry system, the commissions paid account is debited, and the bank account (or the creditors' account until it is paid) is credited. This account may be combined with the commissions received account.
The principle that financial information provided by a company should not omit anything material, ensuring the reliability and relevance of financial statements.
A detailed examination of the Comprehensive Income Statement, including its historical context, key components, mathematical formulas, and importance in financial analysis.
A comprehensive guide to understanding the Conceptual Framework in financial accounting and reporting, including historical context, key principles, importance, and applicability across various regions.
The Conceptual Framework for Financial Reporting sets out the basic accounting concepts informing International Accounting Standards and International Financial Reporting Standards, serving as a guide for both the International Accounting Standards Board (IASB) and management.
The Consistency Concept is a key accounting principle that demands uniformity in accounting practices within each accounting period and from one period to another. Though no longer recognized as a fundamental principle, it underpins the comparability and reliability of financial statements.
An in-depth exploration of consolidated accounts, combining financial information of all the members within a group of companies, including historical context, key events, detailed explanations, and more.
Detailed explanation of the Consolidated Statement of Financial Position, its importance, structure, key components, and related concepts.
A Contingent Asset is an asset for which the pay-off depends upon future events that are not under the control of the company holding the asset. These assets are not included on the company's balance sheet but do appear in the financial statement notes.
A comprehensive overview of the Continuity Assumption, also known as the Going-Concern Concept, including its importance, applications, and related considerations.
A detailed exploration of contra entries in bookkeeping, including historical context, key events, types, explanations, and examples.
An in-depth exploration of cost apportionment, including historical context, types, key events, models, charts, applicability, and more.
An in-depth look into the custom used as a basis for recording costs in accounting periods, including historical cost, current cost, and replacement cost conventions.
An in-depth guide on Cost Ledger, explaining its historical context, types, key events, and practical applications.
Understanding the importance, types, and management of current assets in business finance.
An in-depth look into Current Cash Equivalent, its applications in contemporary accounting, and its significance in measuring assets and liabilities.
Understanding the cost of replacing an asset at the balance-sheet date, considering factors like obsolescence and market dynamics.
Understanding how current-cost depreciation charges are calculated based on the current cost of assets, including historical context, methods, models, and practical applications.
A comprehensive guide to understanding debits in double-entry bookkeeping, their historical context, significance, types, and real-world applications.
An in-depth exploration of the debit and credit rules which form the basis of double-entry bookkeeping, including their historical context, applications, types, and examples.
Deferred expenses, also known as prepaid expenses, are costs that have been incurred but will be recognized as expenses in future accounting periods.
A comprehensive examination of deferred income, its historical context, types, key events, explanations, mathematical models, importance, applicability, examples, related terms, comparisons, and interesting facts.
Comprehensive overview of Deferred Tax Asset (DTA) including its significance in accounting, key events, examples, related terms, FAQs, and more.
Deferred Tax Liability (DTL) represents taxes owed in the future due to taxable temporary differences between the book value and tax base of assets and liabilities.
Comprehensive guide to deferred taxes, exploring their definitions, types, examples, and impact on financial reporting and taxation.
A comprehensive guide to understanding disallowed expenses in tax and accounting, including types, key events, explanations, importance, and related terms.
An exploration of the accounting concept of disproportionate expense and undue delay in the context of consolidating financial statements within the UK accounting framework.
An accelerated depreciation method that doubles the straight-line depreciation rate, allowing for higher depreciation expenses in the earlier years of an asset's useful life.
The double entry bookkeeping system is a foundational method in accounting where every financial transaction is recorded twice, as both a debit and a credit, to ensure accuracy and consistency.
Double-entry book-keeping is a method of recording business transactions in a set of accounts such that every transaction has a dual aspect and is recorded in at least two accounts.
A comprehensive guide to understanding the principles, applications, and significance of double-entry cost accounting in business finance.
A detailed exploration of the double-entry system in accounting, covering historical context, key concepts, examples, and its significance in modern financial management.
A comprehensive exploration of Doubtful Debts, their significance in accounting, methods for estimating them, and their impact on financial statements.
The Dual Aspect principle asserts that every financial transaction affects at least two accounts, ensuring that the accounting equation remains balanced.
Comprehensive guide on EBIT, its historical context, calculations, importance, applicability, examples, considerations, and related terms.
An in-depth exploration of Equal-Instalment Depreciation, also known as the Straight-Line Method, including historical context, formula, examples, and its importance in accounting and finance.
A comprehensive exploration of the Error of Principle in accounting, including historical context, types, key events, detailed explanations, examples, considerations, related terms, interesting facts, and more.
A detailed exploration of the expense account, its significance in accounting and business, types, historical context, key events, and practical considerations.
The principle that expenses should be recognized in the period when they are incurred.
An accounting principle that states expenses should be recognized in the period they are incurred.
A comprehensive guide to understanding Faithful Representation, its historical context, importance, applicability in financial reporting, related terms, and much more.
Comprehensive coverage of Financial Reporting Standards (FRS), including historical context, key events, detailed explanations, importance, applicability, examples, related terms, comparisons, interesting facts, FAQs, and references.
Detailed insight into the expenses incurred during the establishment of a company, their accounting treatment, and their impact on business operations.
A comprehensive guide to the accounting standards widely used for financial reporting in the United States.
Comprehensive overview of GAAP, including historical context, principles, applicability, and examples.
Earnings Per Share (EPS) calculated following Generally Accepted Accounting Principles (GAAP), without adjustments.
An extensive guide to Generally Accepted Accounting Principles (US GAAP), encompassing historical context, key events, detailed explanations, and their significance in financial reporting.
An in-depth exploration of the Generally Accepted Auditing Standards (GAAS), their historical context, categories, importance, applicability, and more.
An in-depth look at the Gross Margin Ratio, its importance, calculation, examples, and applicability in business.
The historical cost principle involves valuing assets based on their original purchase prices. While it utilizes actual market transaction prices, it can understate asset values and depreciation allowances during inflationary periods, leading to potential overestimation of profits.
An in-depth exploration of Historical Cost Accounting (HCA), its historical context, types, key events, importance, and applications in financial reporting.
The Historical Cost Principle dictates that assets are recorded at their original purchase cost, ensuring objectivity and reliability in financial statements.
An in-depth examination of the historical-cost convention in accounting, which involves valuing assets at their original purchase price.
A comprehensive guide to impersonal accounts, their historical context, types, key events, detailed explanations, and their importance in accounting and finance.
Understand the distinction between income and cash flow, two critical financial metrics in business and finance, and their significance in assessing financial health.
An in-depth exploration of Interest Receivable Accounts, detailing their purpose, functioning, and significance in accounting.
The Lower of Cost or Market (LCM) principle is an accounting guideline that mandates inventory to be recorded at the lower of its original cost or its current market value.
A comprehensive overview of liabilities and assets, highlighting their differences, historical context, and significance in finance and accounting.
Limited Assurance is a level of assurance provided by auditors, indicating that a review has not identified any material modifications that should be made to the financial statements.
An inventory valuation rule used in accounting to ensure items are reported at the lower of their historical cost or the current market value, aligning the financial statements with accurate and conservative values.
A comprehensive examination of the Modified Historical-Cost Convention, including its history, applications, types, key events, importance, and related terms.
The Monetary Measurement Convention in accounting ensures that transactions are recognized in financial statements only if they can be measured in monetary terms, which can lead to certain limitations in accurately reflecting an entity's value.
Net Realizable Value (NRV) represents the estimated selling price of a product minus any further processing costs required to make the product saleable. It is a key concept in inventory management, accounting, and financial analysis.
Exploring non-adjusting events, their definition, significance in financial statements, examples, and necessary disclosures.
An in-depth exploration of non-current liabilities, another term for long-term liabilities, their types, relevance in accounting, and their impact on financial statements.
Normative Accounting Theory prescribes how accounting should be done, offering guidelines and principles for creating and evaluating accounting practices, contrasting with Positive Accounting Theory, which describes and predicts current practices.
Understanding Original Cost and Its Significance in Accounting and Finance
Understanding the nuances of originating timing difference in the realm of accounting and finance.
Understanding the concept of overhead absorption, its importance, and its application in cost accounting and financial management.
Period costs refer to items of expenditure incurred on a time basis, such as rent, insurance, and business rates. These costs are typically fixed and not associated with a specific activity.
Understanding Permanent Differences Between Taxable Income and Accounting Income
A comprehensive guide to understanding the distinctions and implications of prepaid and deferred expenses in accounting and financial management.
An in-depth examination of prior-year adjustments, including their historical context, types, significance, and the accounting principles governing them.
An in-depth exploration of the Profit and Loss (P&L) Account, its structure, historical context, significance, and examples. Understanding the P&L Account in financial accounting.
The proprietary view in accounting emphasizes the rights and interests of shareholders, focusing on their stakes rather than the entity as a separate whole.
An amount calculated to cover the debts during an accounting period that are not expected to be paid. Includes general and specific provisions and their treatment for tax purposes.
