Accounting

Definition: Rectification of errors is a procedure of revising mistakes in the entries. These errors can be of two types, i.e,  the errors committed on both sides in an entry that does not influence the trial balance and can be rectified by making a journal entry. And another one is the errors that occur on one side of the trial balance and disturbs the trial balance are … [Read more...] about Rectification of Errors

Definition: Income Statement provides a significant outlook on business health and its profitability. It communicates information on producing and selling actions of a business over an extent of time. However, it won’t show the whole picture of the financial health of a company, the report on the assets, liabilities and equity of the company is shown in its balance sheet, and … [Read more...] about Income Statement

Definition: Double Entry System is one of the accounting method in which every transaction has a dual effect, i.e., every debit transaction will have an equivalent credit transaction. This system is followed by individuals and institutions for passing journal entries of their day to day business transactions, whether receiving and sacrificing benefits. For instance, Mr. A … [Read more...] about Double Entry System

Definition: Intangible Assets are an attributable non-monetary asset beyond physical affluence, retained for use in the manufacturing or production of goods and services for renting to others or for supervisory purposes. Intangible Assets are described in the Accounting Standard (AS) -26 published by the Institute of Chartered Accountants of India (ICAI). An asset is a … [Read more...] about Intangible Assets

Definition: A cash flow statement is a financial statement which serves the inflow and outflow of the cash and cash equivalents by the company. It consists of all cash receipts and cash payments transactions of the company during the year. It aims to determine the difference between the company's cash-in-hand at the beginning and the end of the year. A specified protocol of … [Read more...] about Cash Flow Statement

Definition: Bank reconciliation statement is a statement made by a firm to obtain the balance of the passbook through the balance of cash book by making certain adjustments or finding the balance of the cash book by taking the balance of passbook on a precise date. It is prepared to understand the precise position of the transactions and to make sure that no blunder has … [Read more...] about Bank Reconciliation Statement

Definition: Non-profit organization are established to provide aid to society, such as developing charity, commerce and religion. However, it has a separate legal entity other than its members, and their primary objective is to provide services without the intention of earning profits in return like trading organizations. The main source of earning for such organizations are … [Read more...] about Non-profit organization

Definition: A ledger is the second step of preparing the financial books of accounts just after posting the journal entries. It is prepared for posting and balancing monetary transactions in a summarized form that arises in the business during the financial year. Separate ledger accounts are prepared to identify the dues and payments of the parties individually at the end of … [Read more...] about Ledger