Companies cannot do business without taking liabilities and such liabilities may come from the owner in the form of capital or may come from outsiders in the form of secured or unsecured loans but there is another liability which is …
A contingent liability is a liability that may occur depending on the outcome of an uncertain future event. A contingent liability is recorded if the contingency is likely and the amount of the liability can be reasonably estimated. The liability …
A contingent asset is a potential economic benefit that is dependent on future events out of a company’s control. Not knowing for certain whether these gains will materialize, or being able to determine their precise economic value, means these assets …
The primary difference between Capital Receipts vs Revenue Receipts is that Capital receipts are the receipts of non-recurring nature which either creates the liability of the company or reduces the company’s assets whereas revenue receipts are the receipts of recurring …
Difference between Capital Expenditure and Revenue Based on their duration, expenses can be categorised as capital expenditure and revenue expenditure. Business entities need to identify the costs incurred by way of these categories to account for them accurately. Also, being …
Useful Life The useful life of an asset is an accounting estimate of the number of years it is likely to remain in service for the purpose of cost-effective revenue generation. The Internal Revenue Service (IRS) employs useful life estimates …
Unpaid Dividend An unpaid dividend is a dividend that is due to be paid to shareholders but has not yet been distributed. Unpaid dividends exist because of timing differences between the record date–the time at which existing shareholders become eligible …
Trade Discount A trade discount is the amount by which a manufacturer reduces the retail price of a product when it sells to a reseller, rather than to the end customer. The reseller then charges the full retail price to …
Surplus A surplus describes the amount of an asset or resource that exceeds the portion that’s actively utilized. A surplus can refer to a host of different items, including income, profits, capital, and goods. In the context of inventories, a …
It is the total amount receivable to a business for sale of goods or services provided as a part of their business operations. Trade receivables consist of Debtors and Bills Recieivables Trade receivables arise due to credit sales. They are treated as …