Basic Concepts of Accounting for Partnership
Businesses can be set up in different ways, such as sole proprietorship, partnership, or as a company. Each type has its limitations. As a business grows, it requires more money and increases risk. In a partnership, two or more people agree to share the business’s money, profits, and losses. The Indian concepts of accounting for […]
How to Prepare an Income and Expenditure Account: Step-by-Step Guide
Creating an income and expenditure account is key to understanding how non-trading organizations function financially. This account shows all the money coming in and going out over a period to determine whether there is a surplus (extra money) or a deficit (shortfall). Preparing this account involves several steps to ensure everything is accurate and precise. […]
What is Input Tax Credit (ITC) in GST
Input tax credit (ITC) is the GST a business pays when buying goods or services for business use. A company can reduce the GST it owes on sales by using this ITC, but only if it follows specific rules. These rules are the same as before GST was introduced, with a few new ones, like […]
Expenses in Accounting: Types and Examples
An expense is a money used to buy something. This includes daily costs like paying a phone bill and more significant purchases like a company buying new equipment. While people might track their spending for budgeting, businesses and accountants have clear rules about what counts as an expense. Expenses in Accounting An expense in accounting […]
What are Drawings in Accounting?
A drawing account isn’t a bank account. It’s a record that shows how much money the business owner has taken out for personal use. This money is different from employee wages and is subtracted from the owner’s share in the business. Keeping separate drawings in accounting helps track these withdrawals. It makes it easier to […]
Creditors and Debtors: What You Need to Know
Understanding the roles of creditors and debtors in your business is necessary. You might be both a creditor and a debtor, depending on your transactions. Read our simple and informative guide to get a clear overview of debtors and creditors. What is a Creditor? A creditor is a person, business, or organization owed money because […]
Top 10 Accounting Concepts Every Professional Should Know
Understanding accounting concepts is one of the most essential parts of running a business. These concepts help you make intelligent financial decisions and keep your company successful in the long run. Accounting concepts are the basic ideas and assumptions of accounting that create a framework for financial accounting. These principles ensure that financial statements are […]
Mastering the Trial Balance: An Essential Guide for Beginners
A trial balance is a statement prepared by a company at the end of the financial year to assist in preparing financial statements or the balance sheet and to calculate the company’s profit and loss. Knowing how to prepare a trial balance is essential for ensuring accurate financial reporting and identifying any discrepancies before finalizing […]
What are the Different Types of Discounts?
Discounts have always been important in attracting customers by offering savings and value. In competitive markets, where consumers see many offers, brands need to use discounts to get attention and boost sales. A clear price list can make these discounts easy for customers to understand and appealing. Not all discounts are the same. Like a […]
Capital in Accounting: What You Need to Know
Several people affiliated with a specific company or an LLP possess capital in accounting. When part of the team, they transact by investing cash in the business as capital. This explains why, in the partnership or LLP agreement, each has almost control over the company, and their profits and losses are also shared in proportion […]
Appreciation in Accounting: A Beginner’s Guide
The term appreciation in accounting is the increase in the price or value of an asset over a period. It can occur because of increased demand, decreased supply, increased inflation, or reduced inflation. It is the opposite of depreciation, where asset values are involved and diminish over time. Appreciation in accounting generally refers to an […]
Depreciation in Accounting – Meaning, Types & Examples
Depreciation in accounting is used to spread the cost of a physical asset over its useful life. It tracks how much of the asset’s value has been used over time. Companies use depreciation for tax and accounting purposes and can choose various methods to calculate it. Depreciation in accounting is almost used by every business. […]
