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 …
Trade Payable A trade payable is an amount billed to a company by its suppliers for goods delivered to or services consumed by the company in the ordinary course of business. These billed amounts, if paid on credit, are entered …
Substance Over Form Substance over form is the concept that the financial statements and accompanying disclosures of a business should reflect the underlying realities of accounting transactions. Conversely, the information appearing in the financial statements should not merely comply with …
A sinking fund is a fund containing money set aside or saved to pay off a debt or bond. A company that issues debt will need to pay that debt off in the future, and the sinking fund helps to …
A share may be issued at an amount more than the face value. It is the case of issue of shares at premium. For Example – a share whose face value is Rs. 10 may be issued at Rs. 20. …
For corporations, shareholder equity (SE), also referred to as stockholders’ equity, is the corporation’s owners’ residual claim on assets after debts have been paid. Shareholder equity is equal to a firm’s total assets minus its total liabilities. KEY POINTS Shareholder …