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

When an asset losses its value or there is a reduction in its market value, this reduction in value is referred to as Asset Impairment.

A contra account reduces the balance of its associated account and also recognizes the reason for reducing it.

A suspense account is used for an unidentified transaction. As soon as that it becomes identified, record them in their respective accounts.

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

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

Cash Book Vs Cash Account: Cash book is a separate book, while cash account is an account within ledger to record cash transaction.

Looking puzzled! Why there are too many different types of working capital? why they are categorized so broadly? & most importantly […]

Cash basis vs accrual basis accounting? Ahh! Confusing- what are they? Why and how Cash basis accounting is different from accrual […]

Accrual accounting is an accounting method that records revenues and expenses when they incur- same accounting period.

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

Three methods of preparing Cash Budget: 1.Receipt and payment method 2.Adjusted profit & loss method/Cash Flow Method 3.Balance Sheet Method.

Four easy steps to prepare cash budget: Define the period, Decide the desired cash position, estimate cash inflows outflows.

Calculate cash conversion cycle in 3Steps. Step#1 Calculate Avg. Inventory, A/R and A/P. Step#2 Calculate DIO, DSO, DPO. Step#3 Calculate CCC.

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