Learn About Simple and Compound InterestThis concept is known as the time value of money and forms the basis for relatively advanced techniques like discounted cash flow (DCF) analysis. The discount factor can be thought of as the reciprocal of the i... Read more
What is a contra asset account?In the double-entry system, transactions are recorded in terms of debits and credits. Since a debit in one account offsets a credit in another, the sum of all debits must equal the sum of all credits. The double-entry s... Read more
Exponential Functions: Compound InterestPooling together its members money is how banks and other lenders provide loans to borrowers, among other banking activities. We pay interest on credit card purchases and loans, and we earn interest on our savi... Read more
Preparing Financial Statements and Auditors' IndependenceAlmost all companies receive a yearly audit of their financial statements, such as the income statement, balance sheet, and cash flow statement. Lenders often require the results of an external... Read more
When does a negative cash balance appear on the balance sheet?Such items include sales revenue, cost of goods sold (COGS), depreciation, and necessaryoperating expenses. The retained earnings are calculated by adding net income to (or subtracting net... Read more
How to Account for a Record Estimated Loss From a LawsuitAs illustrated by these journal entries, while the initial entry to record accrued vacation increases expense on your profit and loss statement, future uses of accrued vacation do not. Dependin... Read more
What are the main objectives of comparative analysis and why are they important to external users of financial statements, such as investors?What To Study While Analyzing A Comparative Income Statement?These are mainly prepared for internal decision-... Read more
Comparative financial statements — AccountingToolsMore advanced techniques to compliment a comparative balance sheet analysisThis one-time gain caused an unusually large increase in net income for 2010. This is important as we continue our analysis o... Read more
Comparability PrincipleAnd, this means the auditor finds no issues with matching, materiality, "historical costs," or any other GAAP-defined accounting principle. And, this outcome means the auditor finds no problems with matching, materiality, histo... Read more
Dividend Per ShareThis naturally means that a company that pays dividends has been through the major growth phase and gotten to the point where they can pay out at least some of their earnings to their shareholders. Given this, there is an element of... Read more
