Effects of inflation on business overview: Most people think about inflation as a situation of rising prices. However, it is actually the value of money going down. The overall effects of inflation are negative on individuals as well as businesses.…
Accounting profit vs economic profit overview: The term profit in general, is the difference between the total revenues and total expenses. However, economists use the term “profit” differently from the way accountants use it. This is just because of the…
Types of Share Capital Overview Share capital is the sum of all funds that companies raise by issuing shares to investors. Following is the list of types of share capital that we will discuss in this post. 1) Authorized capital 2) Issued…
Trial balance in accounting overview: A trial balance in accounting is a list of accounts and their balances at a given time, particularly at the end of the accounting period. A trial balance is the next step after the general…
Risk and return Overview: Risk and return are two key factors influencing investment decisions. These two words are highly and positively correlated with each other. In fact, there is a most popular finance principle that says, “ higher the risk…
Impact of Inventory Errors on financial statements Inventory errors are very common among the accounting errors. There might be many reasons, however, the impact of inventory errors on financial statements is really alarming. Inventory management is no doubt very tricky…
Foreign Exchange Risk Overview: Exchange rates are quoted as a number of units of one currency (variable currency) in exchange for one unit of the other currency (base currency). Exchange rates are very volatile in nature. This means that exchange…
Overview of IFRS VS GAAP: Accounting students and professionals are always keen to learn the differences between the two primary sets of accounting principles and standards. We call them IFRS and GAAP. Let’s proceed to the discussion with an understanding…
External Sources of finance: The choice of methods of financing is among the financial decisions taken by the management. One way of categorizing the sources of finance for business is to split them into internal and external sources. So, basically,…
Sources of Finance: Every business needs finance to run or grow the business, whereas the financial needs of every business are different according to the type and size of the business. There are several sources of finance, however, the objective…