The adjusting entries in accounting Adjusting entries are made specifically to update the initial recording of accounting data. There are two instances in which adjusting journal entries are required before the release of financial statements: Certain expenses or revenues have not…

Accounts receivable factoring: The process in which a business entity sells its receivables to a financial institute (called a factor) is known as factoring or accounts receivable factoring. A factor is a financial institute or bank that buys receivables from…

Accounting profit vs economic profit: 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 various…

Types of share capital 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 capital…

Trial balance in accounting 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 ledger…

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…

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 of IFRS…

What are retained earnings? Retained earnings (RE) represent the portion of the business profit that the company retains within the business. It is the profit that has not been paid out as dividends or transferred to any other reserve. A…

Types of intangible assets: There are various types of intangible assets, however, in this article, we are about to discuss the six most important types of intangible assets which are patents, trademarks, copyrights, goodwill, franchises, and license.   1- Patents…

What are Intangible Assets? Being an accounting student or business professional, you see many business assets that you can touch physically and also aware of them as well. However, there are still many assets that do not exist physically and…