Essays About Accounting

  • THE ACCOUNTING EQUATION

    The accounting equation also known as the balance-sheet equation, is the fundamental equation of the double-entry bookkeeping system that displays what is owned and what is owed by the owner … Continue reading “THE ACCOUNTING EQUATION”

  • Cash Method of Accounting

    The cash method of accounting for tax purposes allows business taxpayers to recognize revenue and expenses when actual monies are received. Income is reported when a customer hands over money … Continue reading “Cash Method of Accounting”

  • Auditing advantages and limitations

    Chapter-1 INTRODUCTION INTRODUCTION The review of saving money organizations assumes an imperative part in India as it manage the saving money organizations in right way. In review of banks incorporates … Continue reading “Auditing advantages and limitations”

  • Accounting standards

    Over the period 2004-006, the Australian Accounting Standards Board (AASB), on behalf of the International Accounting Standards Boards (IASB) has greatly developed the accounting standards, in intangible assets, revenue, leases, … Continue reading “Accounting standards”

  • Essay: Payments in breach of international sanctions

    Different countries may or may not treat payments in breach of international sanctions as money laundering. Some jurisdictions differentiate these for definition purposes, and others do not. Some jurisdictions define … Continue reading “Essay: Payments in breach of international sanctions”

  • Essay: Optionally fully convertible debentures

    An Optionally Fully Convertible Debenture is just a kind of Bond that can be converted into Equity Shares by the investors if they want to. So, this is a kind … Continue reading “Essay: Optionally fully convertible debentures”

  • Essay: Management accounting

    Introduction Moved over the existing risks and competition conditions, company management needs management accounting, which is a portion of the company’s accounting system and is planned exclusively to assist managers … Continue reading “Essay: Management accounting”

  • Essay: Creative accounting

    Creative accounting techniques regarding non-current assets generally refer to the treatment of¬†development costs and of goodwill, to revaluation, amortization policy and impairments, to capitalization of expenses subsequent to commissioning and … Continue reading “Essay: Creative accounting”

  • Essay: Accounting information for investors

    1.1 Research Background Mauritius keeps on being around the most focused, stable, and great economies in Africa, with a Gross Domestic Product (GDP) of $11.5 billion and for every capita … Continue reading “Essay: Accounting information for investors”

  • Accounting Principles

    Introduction to Accounting Concepts and Principles

    Accounts are records of financial transactions, where the information about how much has been spent and how much has come in, is entered onto a sales ledger. The completed ledger can be manipulated to produce reports and this helps with financial planning.

    In preparing accounts there are several accounting principles which must be followed:

    Going concern:

    This assumes that a business will continue to trade in the future.

    Consistency:

    The same principles must be used for every set of accounts that is prepared. For example, depreciation must always be set at the same percentage. This means that different sets of accounts can easily be compared to see trends and growth rates.

    Prudence:

    Accountants should always err on the side of caution in their estimates and valuations. For example if revenue were to be over-estimated dividends may appear to be due to shareholders that have not actually been earned.

    Accruals:

    Sales and costs are considered to be incurred at the point that the sale is made and delivered, rather than when the company is actually paid. This means that sales which have been secured, perhaps in the form of orders taken but not yet delivered, will not be taken into account.

    Materiality:

    This is about the relative importance of individual transactions. Most parties will only be interested in significant amounts. This means that lots of low value sales for one customer could be combined together. However if combining transactions could mislead the user of the accounts the amounts should be split out.

    Cost:

    When looking at fixed assets, such as fully owned buildings and machinery, only the original cost of the item is recorded. Its actual value may be quite different, perhaps due to rising property prices, but to calculate a value would make the accounts subjective.

    Entity:

    Financial transactions from one person or group of people should be isolated from other unrelated transactions from the same person or group. For example, a sole trader may be withdrawing money for their salary but this would be classed as two transactions because the owner is receiving money and the business is paying out money.

    Stable money:

    Transactions that happen over a period of time must reflect a single currency and exchange rate. This will allow one year’s set of accounts to be compared with another regardless of the rate of inflation.

    Duality:

    Duality dictates that every transaction has two effects. For example, if a company buys a new asset such as a new printing machine, then fixed assets must be shown to increase and either cash or liabilities must also show an increase.

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