Definition of Ad Hoc Committee An Ad Hoc Committee is defined as a committee gathered to address a particular issue. It can be best considered as a task force, which is supposed to deal with a particular topic at hand. During the normal course of business, there are several instances where the business faces unprecedented …
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Definition of Activity Cost Pool An activity cost pool is defined as the aggregate amount of all the costs that are associated with performing a given business task. This might be a full-fledged business operation, or simply manufacturing of a certain product. The main concept behind pooling all the costs together is to get a …
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Businesses manage their finances using either cash basis of accounting or accrual basis of accounting. These two methodologies are different in their approach towards recording revenues, expenses, and subsequently income. Although the most widely used basis of accounting tends to be an accrual basis, many companies tend to switch to the cash basis of accounting. …
How to Convert from Accrual Basis to Cash Basis of Accounting? Read More »
Definition: When it comes to accounting, accretion is the steady time-bound growth reflected on a business’s earnings and assets due to its overall success, market growth, or if the business undergoes a merger or acquisition. Understanding accretion is important. However, there is a slight difference between accretion and accretion expense. The accretion expense, similar to …
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Accrual: Accrual accounting utilizes both expense and revenues of a company to denote its financial position. These accounting records are what occurred either as revenues or as expenses and therefore must be shown in a company’s income statement and balance sheet. Accrual accounting brings forward a transaction so that it can be recognized during the …
Accrual Vs. Deferral Accounting: What’s the Difference Read More »
Background Authorized and approved supports must support accounting entries. This procedural formality is implemented to bring an element of reliability to the users of financial statements. Some documents are generated to support the transaction when the business performs some activity. These documents may be internal/external depending on the nature of the transaction posted in the …
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Definition: Materiality is one of the essential accounting concepts and is designed to ensure all of the crucial information related to the business are presented in the financial statement. The purpose of materiality is to ensure that the financial statement user is provided with financial information that does not have any significant omissions/misstatements. If there …
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Accounting principles are the guidelines and rules that the business needs to follow while reporting financial data/information. These rules are standard procedures and a common set of principles that provide the basis for the financial accounting policies adopted by the business. These principles apply to the whole set of the financial statement, including assets, liabilities, …
What Are Seven Types of Accounting Principles? (Beginner Guidance) Read More »
Introduction Accounts receivables are the receivables which a company is yet to receive from one of its clients for the product or service it provided. Accounts receivables aging is a method of accounting which that organizes the receivables of a company according to the due date. The latest ones, which have the nearest date, are …
Accounts receivables are defined as any credit due as the result of a sale made on credit that the company sold it their customers. The accounts receivables are a balance of money due to the company for goods or services provided to the customers, but for which the customer has not yet paid for Account …
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