Accounting Terms

Top 10 – Objectives of Accounting

5 / 5 ( 6 votes ) Most common and important objectives of accounting for a company are usually systematically report transactions, analyzing those transactions, prepare financial statements, preparing balance sheet. This information will help in financial decision-making and important towards business activities. Accounting helps accountants as well as financial departments with several of business …

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What is Discounted Cash Flow (DCF)? Definition, Analysis, Examples, Problems

5 / 5 ( 6 votes ) Discounted Cash Flow Definition: In Finance, the method of discounted cash flow, discounted cash flow or discounted bottoms cash flow (DCF for its acronym) is used to evaluate a project or an entire company. DCF methods determine the present value of future cash flows discounting them at a …

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Financial Ratio Definition, Examples and Ratio Analysis Interpretation

5 / 5 ( 7 votes ) Financial Ratio Definition: The financial ratio or financial indicators are coefficients or reasons that provide financial and accounting units of measurement and comparison, through which, the ratio (division) together two data direct financial, allow analyzing the state current or past an organization to function at optimum levels defined …

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What is Cash Flow Statement? Definition, Example, Format and Cash Flow Report Analysis

5 / 5 ( 6 votes ) Cash Flow Statement Definition: Cash flow statement is one of the new financial statements that the company has incorporated reform of 2007. This is a state that reports on the use of monetary assets such as cash and cash equivalents categorizing the changes by activities and indicating the …

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Branches of Accounting or Different Types of Accounting

4.8 / 5 ( 21 votes ) There are several branches of accounting to maintain accounts at present. Different types of accounting that range from maintaining records, auditing to preparing income tax returns. Accounting professional trend to specialize in one of these field as their career option as accountant. Branches of Accounting (or) Different Types …

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What is a Balance Sheet? Definition, Format and Example of Balance Sheet

5 / 5 ( 9 votes ) Balance Sheet Definition: In financial accounting, “Balance sheet is a financial statement summary report of an assets, liabilities and equity capital of an individual or a company or an organization at a specific given time”. This provides adequate information to investors, shareholders or a group about the company’s …

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What is a profit and loss statement or Income Statement? Definition with Examples

5 / 5 ( 9 votes ) Profit and Loss Statement Definition: Under financial accounting, “profit and loss account, statement of revenue or loss, financial performance statement, operating statement, earnings statement, statement of profit and loss, P&L statement, Income statement all this terms refers to Profit and Loss statement of the financial reports”. This statement shows …

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What is a Trial Balance? Definition, Examples and Limitations of bookkeeping

5 / 5 ( 5 votes ) Trial Balance Definition: In Accounting, Trial balance is a consolidated list of all the general ledger accounts of the business. Debit balances of ledger accounts will be listed across debit column of trial balance. Whereas Credit balances of ledger accounts will be listed across credit column of trial …

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What Is a General Ledger? Definition, Format and Example of General Ledger

5 / 5 ( 8 votes ) General Ledger Definition: In a financial accounting, super set of accounts that summarize records of transactions occurred during a specified period for a business or an organization is called as General Ledger Account. All the credit and debit balances of ledger account should be equal. This information is …

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What are Journal Entries? Definition, Format and Examples of Journal Entry

5 / 5 ( 12 votes ) In accounting system, Journal entry consists of transactions which are either a credit or debit transactions. Total of debit and credit journal entry transactions are unbalanced.  Journal entry can record unique or recurring transactions. Therefore, Journal entry transactions directly affect the balances of general ledger accounts. “Journal entry …

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Steps in Accounting Process / Accounting Cycle

4.9 / 5 ( 9 votes ) “Accounting process is also referred as accounting cycle”. Traditional accounting methods are been changed in today’s accounting software. But still accounting process or accounting cycle remains the same irrespective of traditional or modern accounting methods. Steps in Accounting Process / Accounting Cycle: Here we will provide the detail …

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What is Double Entry System? Definition with Examples of Bookkeeping System

5 / 5 ( 14 votes ) Double Entry System Definition: In accounting, double entry system means every transaction requires corresponding opposite entry into another account. For example: Mr. David received Rs.5,000/- as income. In this scenario, two journal entries would look like this: debit Rs.5,000/- into cash a/c and credit Rs.5,000/- into income’s a/c. …

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What is a Single Entry System? Definition, Format, Problems and Example

5 / 5 ( 42 votes ) Single Entry System Definition: A single entry system is a method of maintaining financial information thru one sided accounting entry. It method is also known as single-entry accounting system. Normally small businesses preferred to maintain single-entry bookkeeping system with records of minimum necessities. Single entry system example: such accounting …

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Types of Accounts: Real, Personal and Nominal Accounts with Examples

5 / 5 ( 402 votes ) There are credit and debit rules of accounting which is referred as 3 golden rules of accounting. It is also referred as 3 types of accounts in accounting. Here we will also see examples of real account, examples of nominal account as well as examples of personal account. …

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What is Revenue and Expenses? Definition with Accounting Examples

4.8 / 5 ( 21 votes ) Revenue Definition: In financial accounting, an inflow of money usually from sales or services thru business activities is called as revenue. It is also known as sales or turnover of the business. In other words, an income to a business or an organisation is termed as revenue. For …

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