Risk and return: 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 higher…
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 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 rates…
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…
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…
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…
Objectives of internal control: Internal control refers to all the methods and procedures implemented within the organization to safeguard assets, enhance the reliability of accounting records, boost the efficiency of operations, and ensure compliance with laws and regulations. There are…
Difference between economic investment and financial investment: When entrepreneurs, corporate executives, and common people use the word investment, they almost always mean financial investment. In fact, the common meaning of the word investment is a financial investment. However, there is…
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…