How do the three financial statements work together The three main financial statements—income statement, balance sheet, and cash flow statement—work together to provide a complete picture of a company’s financial health. Each statement serves a unique purpose, but they are interconnected, allowing stakeholders to gain insights into the company’s performance and stability. Here’s how they work together: […]
Accounting Concepts Bases and Policies Concepts/conventions/principles Accounting Concepts are broad basic assumptions that underlie the periodic financial accounts of business enterprises. Examples of concepts include: The going concern concept The going concern concept Implies that the business will continue in operational existence for the foreseeable future, and that there is no intention to put the […]
ACCOUNTING THEORY International Accounting Standards and International Financial Reporting Standards The foreword to accounting standards defines Accounting Standards as Authoritative statements of how particular types of transaction and other events should be reflected in financial statements. Accounting Standards are developed to achieve comparability of financial information between and among different organizations. International Accounting Standards (IAS’s) […]
Why “Learning by Doing” Works for Accounting Students When it comes to learning accounting, just reading textbooks isn’t enough. To really understand and excel in accounting, students need to practice what they’ve learned. This method, called “learning by doing,” is especially effective for accounting students. Here’s why: Real-Life Practice Accounting isn’t just about learning theories; […]
Test your knowledge with this practice quiz You get to see the correct answers on submission of the quiz. We can help you master accounting basics concepts and help you build a strong foundation for the future. [ays_quiz id=’1′]
What is a Temporary Account Temporary accounts are used as holding places for financial transactions for a specific reporting period. At the end of the period, these accounts are emptied, meaning they’re “temporary” because their balances don’t carry over to the next period. Instead, the balances are moved to permanent accounts on the balance sheet. […]
Ways to Balance Work and Study The challenge of managing a professional career, personal commitments, and studying for the CPA (Chartered Public Accountant) exam is a complex balancing act. Our guide is designed to help CPA candidates navigate this journey with practical strategies and insights, ensuring a successful and balanced approach. CPA Preparation The CPA […]
In Financial Accounting, two primary methods dominate how financial transactions are recorded: accrual and cash accounting. Each method has its own set of rules and applications, making it crucial for businesses and individuals to understand their differences. Let’s look into these two fundamental accounting methodologies. Accrual Accounting Key Features Revenue Recognition: Under accrual accounting, revenues […]
The double-entry system is a fundamental concept in accounting that ensures accuracy and consistency in financial records. It’s based on a simple principle: for every transaction, at least two accounts are affected. Let’s break this down into more digestible parts using examples and a straightforward table. Key Principles of Double-Entry Accounting What Happens in a […]
Navigating the world of accounting can often seem daunting, especially for those not versed in the field. However, understanding the basic principles of accounting is essential for anyone involved in business, be it a small business owner, a new manager, or an individual looking to grasp the basics of financial literacy. This guide is designed […]
