Cash Accounting

Modified Accrual Accounting

๐–๐ก๐ฒ ๐Œ๐จ๐๐ข๐Ÿ๐ข๐ž๐ ๐€๐œ๐œ๐ซ๐ฎ๐š๐ฅ ๐€๐œ๐œ๐จ๐ฎ๐ง๐ญ๐ข๐ง๐ ? ๐ƒ๐ž๐ญ๐š๐ข๐ฅ๐ž๐ ๐„๐ฑ๐ฉ๐ฅ๐š๐ง๐š๐ญ๐ข๐จ๐ง.

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Modified accrual accounting recognizes revenues only when measurable and available. And recognize expenses when they incur.

Is Petty Cash an expense account or an asset account?

๐ˆ๐ฌ ๐๐ž๐ญ๐ญ๐ฒ ๐‚๐š๐ฌ๐ก ๐€๐ง ๐„๐ฑ๐ฉ๐ž๐ง๐ฌ๐ž ๐€๐œ๐œ๐จ๐ฎ๐ง๐ญ ๐Ž๐ซ ๐€๐ง ๐€๐ฌ๐ฌ๐ž๐ญ ๐€๐œ๐œ๐จ๐ฎ๐ง๐ญ?

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Is Petty Cash An Expense Account or Asset Account? Petty Cash is not an expense account, it is an asset account.

Free cash flow vs cash flow

๐…๐ซ๐ž๐ž ๐‚๐š๐ฌ๐ก ๐…๐ฅ๐จ๐ฐ ๐•๐ฌ ๐‚๐š๐ฌ๐ก ๐…๐ฅ๐จ๐ฐ- ๐‡๐จ๐ฐ ๐“๐ก๐ž๐ฒ ๐ƒ๐ข๐Ÿ๐Ÿ๐ž๐ซ?

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Free Cash flow & Cash flow. FCF is used for the valuation of an enterprise while CF is used to calculate an organizationโ€™s net cash flow

Cash Accounting

๐‚๐š๐ฌ๐ก ๐€๐œ๐œ๐จ๐ฎ๐ง๐ญ๐ข๐ง๐  ๐’๐ญ๐ž๐ฉ-๐›๐ฒ-๐’๐ญ๐ž๐ฉ ๐’๐จ๐ฅ๐ฏ๐ž๐ ๐„๐ฑ๐š๐ฆ๐ฉ๐ฅ๐ž

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Cash Accounting method only considers two kinds of transactions- cash inflows & outflows. It doesn’t recognize any payables, and receivables.

Free Cash Flow

๐–๐ก๐š๐ญ ๐ข๐ฌ ๐…๐ซ๐ž๐ž ๐‚๐š๐ฌ๐ก ๐…๐ฅ๐จ๐ฐ (๐…๐‚๐…) ๐š๐ง๐ ๐‡๐จ๐ฐ ๐ญ๐จ ๐‚๐š๐ฅ๐œ๐ฎ๐ฅ๐š๐ญ๐ž ๐ˆ๐ญ?

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Free Cash Flow (FCF) indicates that a company is financially sound, and it has the ability to grow and pay its debts and dividends.

How-do-changes-in-working-capital-impact-cash-flow

๐‡๐จ๐ฐ ๐ƒ๐จ ๐‚๐ก๐š๐ง๐ ๐ž๐ฌ ๐ข๐ง ๐–๐จ๐ซ๐ค๐ข๐ง๐  ๐‚๐š๐ฉ๐ข๐ญ๐š๐ฅ ๐ˆ๐ฆ๐ฉ๐š๐œ๐ญ ๐‚๐š๐ฌ๐ก ๐…๐ฅ๐จ๐ฐ?

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The “impact” relates to how the cash flow has changed when there is positive and negative fluctuation in working capital.

Cash Flow vs. Profit

๐‚๐š๐ฌ๐ก ๐…๐ฅ๐จ๐ฐ ๐ฏ๐ฌ. ๐๐ซ๐จ๐Ÿ๐ข๐ญ: ๐’๐š๐ฆ๐ž ๐จ๐ซ ๐ƒ๐ข๐Ÿ๐Ÿ๐ž๐ซ๐ž๐ง๐ญ ๐…๐ข๐ง๐š๐ง๐œ๐ข๐š๐ฅ ๐Œ๐ž๐ญ๐ซ๐ข๐œ๐ฌ?

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Cash flow vs. Profit- Cash Flow represent the liquidity of the company while profitability represents the income and expenses of the company.

๐๐ซ๐ž๐ฉ๐š๐ซ๐ž ๐‚๐š๐ฌ๐ก ๐…๐ฅ๐จ๐ฐ ๐’๐ญ๐š๐ญ๐ž๐ฆ๐ž๐ง๐ญ ๐ข๐ง ๐Ÿ‘ ๐„๐š๐ฌ๐ฒ ๐’๐ญ๐ž๐ฉ๐ฌ.

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Cash Flow Statement helps to track cash inflow and outflow. CFS has three main parts: operating, investing, and financing activities.