A Priori Theories of Accounting encompass the use of deductive reasoning to develop measurement and valuation systems based on certain axioms or assumptions, rather than empirical observation. The 1960s marked a significant period for a priori research in financial accounting.
The accounting equation is a fundamental principle in financial accounting, representing the relationship between an entity's assets, liabilities, and owner's equity. It ensures that a company's balance sheet remains balanced and reflects the true financial position.
Accounting standards are authoritative standards for financial accounting and reporting, such as the Financial Reporting Standards issued by the Financial Reporting Council in the UK or the International Financial Reporting Standards issued by the International Accounting Standards Board. In the USA, the responsibility falls on the Financial Accounting Standards Board. These standards provide rules and procedures for the measurement, valuation, and disclosure of accounting transactions.
Accumulated depreciation is the total amount of depreciation deducted from the cost price or valuation of a fixed asset since its acquisition. This concept is crucial for financial accounting and asset management.
In activity-based costing systems, an activity measure is a quantifiable measure of the volume or rate of activity in an activity cost pool, used as a basis for allocating costs. This concept is integral for effective cost management and accurate financial accounting.
Comprehensive overview of Amortized Cost, its historical context, calculation methods, importance, and real-world applications. Insight into depreciation, amortization schedules, and related terms with examples, diagrams, and FAQs.
An in-depth guide to understanding the appropriation account, its types, historical context, key events, mathematical models, and significance in financial and governmental accounting.
Attributable profit refers to the portion of the total estimated profit from a long-term contract, which accounts for estimated remedial, maintenance costs, and other non-recoverable expenses, fairly reflecting the profit for the completed work by a specific accounting date.
A comprehensive guide on bad debt provision, including historical context, types, key considerations, formulas, importance, applicability, examples, related terms, comparisons, interesting facts, and FAQs.
A comprehensive exploration of the concept of balance in financial accounts, its historical context, types, key events, and importance in finance and accounting.
A certain volume of stock, assumed to be constant in that stock levels are not allowed to fall below this level.
A detailed overview of Bought Ledger, its importance in financial accounting, types, historical context, key events, examples, and related terms.
Brought Down (b/d) refers to the opening balance of an account at the beginning of a period, carried forward from the previous period’s closing balance.
In bookkeeping, 'brought forward' describes an amount that is the total of the corresponding column on the previous page.
An in-depth exploration of capital reserves, covering historical context, categories, key events, mathematical formulas, examples, considerations, and more.
Carriage Outwards refers to the delivery costs of goods sold, recorded as a business expense and written off to the profit and loss account for the period.
Understanding the concept of Cost Price, its significance in various industries, and how it impacts financial decision-making processes.
A thorough examination of the Certified Public Accountant (CPA) designation, including its definition, requirements, historical context, and significance in the accounting profession.
A detailed exploration of 'Credit (CR)' in accounting, including its definition, types, historical context, examples, and applications in finance.
An in-depth exploration of debits and credits, addressing their roles, mechanics, and significance in the double-entry bookkeeping system.
A comprehensive look at deferred assets, including definitions, historical context, types, key events, formulas, examples, and more.
Deferred Expenses are payments made for goods or services to be received in the future, recorded as assets until used. They are comparable to prepaid income but on the expense side of the ledger.
An in-depth analysis of deferred liabilities, including their types, importance, applications, and key considerations in financial accounting.
Depreciated Replacement Cost refers to the current cost to replace an asset with a new one, minus any depreciation. This concept is critical in the fields of accounting, finance, and real estate.
Detailed explanation of Depreciated Value, its calculation, types, special considerations, examples, historical context, and applicability in various fields.
Direct Expenses are costs that are directly tied to specific business activities, such as salaries of employees, costs of raw materials, or expenses for equipment used in production.
A comprehensive exploration of Donated Capital, its importance in financial accounting, its applications, and key examples in the business world.
Understanding the Double-Declining Balance Method: Accelerating Depreciation for Fixed Assets
An in-depth overview of the Financial Accounting Standards Advisory Council (FASAC), its historical context, functions, importance, and more.
A financial accountant focuses on preparing financial statements and reports for external stakeholders. This role is crucial for ensuring the accuracy and compliance of an organization's financial information.
An in-depth guide to Financial Accounting, covering its history, principles, key activities, and importance.
The Financial Accounting Foundation (FAF) oversees the Governmental Accounting Standards Board (GASB) and the Financial Accounting Standards Board (FASB), ensuring the establishment and improvement of financial accounting and reporting standards.
An in-depth exploration of Fixed-Assets Register, its importance in asset management, and its components in financial accounting.
Freight Out refers to the cost of shipping goods from the seller to the buyer. It encompasses expenses incurred in the logistics process to ensure goods reach their destination.
A comprehensive guide to Holding Gain, explaining its historical context, types, key events, formulas, examples, and its role in financial accounting.
A comprehensive look at the term 'In Transit,' covering its historical context, types, key events, detailed explanations, mathematical formulas, diagrams, importance, applicability, examples, related terms, comparisons, interesting facts, quotes, and FAQs.
An in-depth exploration of indirect manufacturing costs, their components, importance, and implications in production and accounting. See factory overhead for additional context.
Input VAT refers to the Value Added Tax that businesses pay on their purchases, which can be reclaimed or offset against their output VAT.
An in-depth exploration of Integrated Accounts, which combine financial and cost accounting records to ensure unified data and avoid reconciliation issues.
An in-depth exploration of inter-segment sales, transactions between different operating segments within the same entity, including historical context, key events, types, mathematical models, and relevance in various sectors.
An accounting system that keeps cost accounting and financial accounting information separately, regularly reconciling the two by use of control accounts.
Comprehensive exploration of intra-group transactions, including their historical context, types, significance, and practical applications in various fields.
Detailed insights into Inventory Accounting, including historical context, types, key events, explanations, mathematical models, importance, examples, related terms, and more.
A comprehensive book or digital record containing detailed information about inventory transactions, including historical context, key events, types, mathematical models, importance, and applicability.
A comprehensive guide to Joint Product Costing, its importance, methods, historical context, applications, key events, and detailed explanations.
A comprehensive guide to Material Cost, its historical context, types, key events, explanations, mathematical formulas, importance, applicability, and more.
An in-depth look at Material Price Variance, its significance in financial management, and the methods for calculation.
An in-depth look at net earnings from self-employment, including definitions, calculations, examples, historical context, and related terms.
An in-depth analysis of obsolescence, its types, historical context, impact on depreciation, inventories, and financial implications.
Understanding the role of opening stock in financial accounting and inventory management.
Understanding Operating Expenses (OPEX): Regular and ongoing business costs, including overhead expenses, that are necessary for day-to-day operations.
Physical capital maintenance is a key concept in the field of accounting and economics, focusing on the preservation of an entity's physical capital over time. This concept ensures that a company's capacity to produce goods and services remains intact, accounting for wear and tear as well as depreciation.
A comprehensive overview of plant and equipment as crucial components of property, plant, and equipment (PPE) in accounting, including types, importance, historical context, formulas, key events, and more.
In financial terms, provisions are specific amounts set aside by an organization to cover future liabilities or expenditures that are probable and can be estimated reliably.
Revaluation Account refers to the process of adjusting the values of a partnership's assets and liabilities to reflect their current market value. This practice is crucial during events such as the admission of a new partner or the exit of an existing partner.
A comprehensive explanation of revenue accounts, including types, key events, mathematical formulas, importance, examples, and related terms.
A detailed exploration of revenue transactions, their nature, significance, and implications in financial accounting.
An in-depth exploration of Scrap Value, also known as Salvage Value, covering its definitions, importance, calculations, and relevance in various fields such as accounting, finance, and real estate.
An in-depth look at secret reserves, their historical context, types, significance in accounting, and implications for businesses and stakeholders.
Semi-Fixed Cost, also known as stepped cost, is an item of expenditure that increases in total as activity rises, but in a stepped, rather than a linear, function. This article provides a comprehensive overview of semi-fixed costs, including definitions, types, historical context, applications, examples, key events, and more.
The concept of Service Cost represents the present value of employee benefits earned in the current period within the context of defined benefit plans.
A comprehensive look into the Statements of Financial Accounting Concepts, their purpose, historical context, types, and impact on financial accounting and reporting.
The concept of share premium pertains to the amount payable for shares issued by a company in excess of their nominal value. This article provides a comprehensive overview including historical context, types, key events, and detailed explanations.
An in-depth examination of the Sold Ledger, including its historical context, key events, explanations, formulas, importance, applicability, examples, related terms, and more.
An accounting method where bad debts are recognized only when specific accounts are deemed uncollectible, requiring deduction of the debt when considered worthless after exhaustive collection efforts.
A Standard Cost Card is a detailed record showing the standard cost structure of a product, including material costs, labor times, and overhead rates. This article covers its historical context, components, mathematical models, and modern applications in cost management.
A comprehensive guide to the Statement of Financial Accounting Standards (SFAS), including historical context, key events, importance, and examples. Explore the intricacies of SFAS, its applicability, and related terms.
A detailed exploration of Straight-Line Amortization, a method that allocates equal interest expense across all periods, disregarding the bond's book value changes.
Tangible assets possess a physical presence, whereas intangible assets lack physical existence. Discover their definitions, types, and significance in finance and accounting.
An in-depth examination of tax apportionment, its history, types, methods, and its importance in financial and tax accounting.
An in-depth exploration of unrealized profit and loss, their importance, applications, and related concepts in finance and investments.
Written-Down Value (WDV) is a measure used in accounting and finance to represent the net value of an asset after accounting for depreciation or amortization.
A comprehensive guide on 'Write Off', its historical context, types, key events, explanations, importance, applicability, examples, related terms, comparisons, and interesting facts.
A comprehensive guide explaining the concept of a write-off, the reduction of the recognized value of an asset, often indicating it is no longer recoverable.
Understanding accumulated depletion as a contra-asset account for depletable assets and its implications in financial accounting.
Understand the concept of Closing Inventory, its valuation methods, importance in financial accounting, and impact on financial statements and business operations.
An in-depth exploration of Contributed Capital, including definitions, types, examples, historical context, applicability, and related terms such as Paid-in Capital and Surplus.
A comprehensive article detailing the concept of Control Accounts in accounting, which provide summaries of totals from subsidiary ledgers, such as accounts payable and accounts receivable.
A comprehensive overview of Financial Accounting, its key aspects including balance sheets and income statements, differences from managerial accounting, historical context, applicability, and more.
Full costing, also known as absorption costing, is an accounting method that assigns all manufacturing costs to the product. This includes both variable and fixed costs. It contrasts with direct costing which only includes variable manufacturing costs.
An in-depth overview of general expenses, which are costs incurred for operations beyond selling, administrative, or cost of goods sold.
The economic accrual of interest involves the calculation and understanding of interest cost for an indebtedness over a given period. This detailed entry covers the compounding process, methods of calculation, and its applications in financial accounting and tax deductions.
A comprehensive guide to Nonoperating Expense (Revenue), outlining expenses and income that are incidental to a business's main activities, such as the sale of land by a mattress maker.
The Periodic Inventory Method is an accounting process used to determine the cost of inventory sold or put into production by using data on beginning inventory, purchases, and ending inventory. This method calculates the cost of withdrawals from inventory.
Prepaid income refers to rents, interest, or compensation received in advance for services to be performed in the future, and is generally included in taxable income in the year received.
The Reserve Method (Bad Debts) involves the accrual of bad-debt expense based on the projected worthlessness of receivables or prior experience with uncollectible receivables.
Understanding retained earnings: their importance, calculation, and implications for businesses.
A comprehensive guide to subsidiary ledgers and their importance in financial accounting, detailing how they support the general ledger.
An accelerated depreciation method that allows for a larger depreciation expense in the earlier years of an asset's useful life.
Unearned premium represents insurance premiums that have been paid in advance for coverage that extends beyond the current period. If a policy is canceled, the insurer must refund the unearned amount.
An in-depth explanation of the concept of 'Year' in the context of Calendar and Fiscal Tax Year, including definitions, examples, and special considerations.
Understand the concept of accounts receivable, its significance in business operations, how it is utilized, and illustrative examples to provide a clearer understanding.
Accrued expenses are recognized on the books before they have been billed or paid. This article provides a comprehensive overview of accrued expenses, including their definition, examples, benefits, and considerations.
Explore the concept of actuarial gain or loss, the adjustments made to the assumptions used to value a corporation’s defined benefit pension plan obligations. Learn about its significance, how it works, and its impact on financial statements.
Comprehensive guide on the allowance for bad debt, covering its definition, methods for recording, and practical application in financial accounting.
An in-depth exploration of Asset Retirement Obligations (ARO), including their definition, practical examples, implications, and accounting treatment.
Explore the Certified Management Accountant (CMA) designation, including its definition, examples, career opportunities, and strategic importance in financial accounting and management.
A comprehensive explanation of 'Due to Account,' a liability account within the general ledger indicating funds payable to another account, including definitions, examples, and its importance in financial accounting.
Explore the concept of general provisions, balance sheet items representing funds set aside by companies to cover anticipated future losses. Learn how they work, different types, special considerations, and their significance in financial accounting.
An in-depth look into held-for-trading securities, their characteristics, accounting treatments, and the role of fair value adjustments.
