Accounting

How to Record Interest Receivable Journal Entry? (Example, Definition and More)

Overview When an organization has an interest-earning bank deposit or another interest-bearing receivable, it should account for any interest receivable at the period’s end by adjusting with a correct journal entry. This is because interest (income) is gained over time. Similarly, the company’s total assets and total revenues on the balance sheet and income statement …

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What are Business Source Documents? 7 Important Source Documents to Know

Business source documents are the primary source of information. These documents contain valuable primary data for bookkeeping and accounting records. Business source documents can also be used as audit evidence and for tax compliance purposes. Let us discuss what are business source documents and the top 7 source documents used most widely. What are Business …

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What is Business Entity Concept? – Definition, Examples, and Details.

The business entity concept differentiates between the financial transactions of businesses and their owners. It requires maintaining separate accounting records for both. Let us discuss the business entity concept, how it works, and its importance for a business. What is Business Entity Concept? The business entity concept states that the transactions of a business and …

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What Is the Difference Between Corporate Office and the Head Office of the Company?

A corporate office is a central workplace for a corporation. It is commonly referred to as the head office of a corporation or a large company. A head office and a headquarters is also a similar term that we commonly associate with the epicenter of large companies. Let us discuss what is a corporate office, …

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Is Income Statement the Same as Profit and Loss?

Yes, an income statement is the same as profit and loss statement. These terms are used interchangeably. Traditionally, this statement was referred to as an income statement. However, companies and businesses have been using the terms profit and loss more frequently in recent times. Background There are numerous success factors for businesses, among which efficient …

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What are Bonds Payable? Are they Current or Non-current liabilities?

A bond is considered a fixed-income debt instrument that provides finance to companies and issuers. In most cases, these instruments come with a fixed interest rate. However, some may also come with a floating rate. Either way, bonds allow companies to raise finance. In exchange, it provides the investor with the right to receive interest …

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Accounting for Borrowing Costs (Journal Entry and Example)

Companies use assets for various purposes, primarily including the generation of revenues. These assets include resources owned or controlled by a company. Similarly, these resources result in an inflow of economic benefits in the future. They consist of inventories, cash, accounts receivables, and fixed assets. Of these, the fixed assets constitute a significant portion of …

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