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 […]

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.

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

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

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

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,

A cash receipt is issued when a cash transaction takes place and the payment is made through cash or cash equivalent. A cash receipt is an integral part of any accounting system. It has several uses including records for cash sales, balancing accounts receivable and payable, and reconciliation of accounts. Let us discuss the cash

Definition The control account is a summarized account in the general ledger. It contains aggregated total for the transactions that are posted in the subsidiary ledger. It is also called a controlling account because it enables us to perform reconciliation control on the ending balance. In other words, control account enables us to reconcile the

The Bank reconciliation process involves comparing internal and external bank records to ensure that all the transactions have been properly recorded. The primitive reason to do a stringent bank reconciliation process is to ensure no discrepancy between actual and recorded transactions. Two main documents are required during the bank reconciliation process. They include the internal