Accrual accounting is an accounting method that recognizes economic events regardless of when cash is exchanged. In accrual accounting, revenues and expenses are recognized when earned or incurred, rather than when the related cash is received or paid. The accrual basis of accounting provides a more accurate picture of a company’s financial position and results … Read more
What is a Chart of Accounts (COA)? A chart of accounts (COA) is a list of the financial accounts used by a business or organization. It typically includes accounts for cash, receivables, payables, equity, revenue, and expenses. The COA provides a framework for tracking an organization’s financial transactions. How Does a Chart of Accounts Work? … Read more
Weighted Average: What is it, how is it calculated and used? How do I calculate weighted total? There are a few different ways to calculate a weighted total. One way is to multiply each item’s weight by its value, and then add all of the products together. For example, if you had two items with … Read more
A certified financial statement is a document that has been prepared by a certified public accountant (CPA) and that has been reviewed and approved by a board of directors or another authorized body. This type of financial statement is typically used in situations where there is a need for a high degree of assurance regarding … Read more
Balance Sheet: Components and Examples What is the main purpose of balance sheet? The balance sheet is one of the most important financial statements for a business. It provides a snapshot of a company’s assets, liabilities, and equity at a particular point in time. The balance sheet can be used to assess the financial health … Read more
The quality of earnings definition refers to the ability of a company to generate profits that are sustainable over the long term. This can be measured by looking at a number of factors, including the company’s financial stability, the quality of its products and services, and the strength of its management team. How is quality … Read more
A Cumulative Translation Adjustment (CTA) is an entry in a company’s equity section of the balance sheet. It represents the aggregate amount of all translation gains and losses that have accumulated since the inception of the company. Translation gains and losses occur when a company’s functional currency is different from the currency of the country … Read more
Cash Flow From Investing Activities: Types and Examples Is a cash investment an asset? Yes, a cash investment is an asset. An asset is anything that has value and can be converted into cash. Cash is an asset because it can be used to purchase goods and services. What are the 2 methods of cash … Read more
How to Read and Use an Income Statement. How do you prepare an income statement in accounting? To prepare an income statement, you will need the following: 1. A list of your income sources 2. A list of your expenses 3. Your accounting software Once you have these items, you can begin to prepare your … Read more
Accumulated other comprehensive income (AOCI) is an account on the balance sheet that represents the portion of shareholders’ equity that comes from sources other than the company’s net income. This can include items such as unrealized gains and losses on investments, foreign currency translation adjustments, and pension plan adjustments. AOCI can be a positive or … Read more
