Compound interest is the extra addition to the principal amount of a loan or deposit. Its also named as interest on interest.
Compound Interest
Operating Expenses
Operating expenses are those day to day expenses a business incurs for the smooth functioning of the business.
Recurring Billing
Recurring billing is a payment model that allows companies to invoice their customers based on an agenda that the company specifies be it once a month, once every quarter, etc.
Profitability Ratio
Profitability ratios relate income statement accounts and categories to show a company’s ability to generate profits from its operations.
Cash Flow Gap
The cash flow gap refers to the time interval between the date when a business pays cash out for the purchase of stocks or wages, and the date it receives cash from customers for the same purchase and services rendered.
Certificate of Deposit
A certificate of deposit is a savings certificate with fixed maturity dates & specified fixed interest rates. Continue reading “Certificate of Deposit”
A brief description on accounts payable
Accounts payable occurred when a company procured some goods or raw materials from a seller on credit. So, on credit means the company opts for late payment within a stated duration.
Financial Statement Analysis
Financial statement analysis can be referred to as the analysis of financial reports like balance sheet etc. This analysis can be done quarterly or annually as per the business requirement. It helps to assess the past, current & future financial situations of the business.
Difference between cash flow & revenue
Cash flow and revenue are very necessary for a small business as it shows the health status. Cash flow & revenue both are different so never take both of this as equal. Revenue shows how the business performs and sales
What is Investment Center?
An investment center is responsible for the growth in revenue of a business or entity through various investments in capital assets. Continue reading “What is Investment Center?”
What is Estimating Ending Inventory?
Ending inventory estimation is a difficult task to carry out. Ending inventory is the amount of ending units of inventory at the end of a month or fiscal year.
What is Income Tax Form 16?
Income tax form 16 is issued by an employer to its employee as a proof of the amount deducted as income tax has been deposited. Income tax form issued on annual basis i.e. every year on or before May 31st.
Pledged Asset
A pledged asset is can be referred as the loan risk decrease asset. It helps lenders to decrease the debt risk so that he can provide service with minimal risks involved.
Cash Flow forecast
Cash Flow forecast is the process of cash income & expense projection. A business must project cash income & expense for smooth business functioning and to be always ready with cash in hand for any unexpected hurdles.
Statement of Cash Flows
Cash flow statement represents a company’s cash handling capacity. This statement shows how a company manages its cash, where its generating revenues to fund operating expenses like salaries, rent expense, asset purchase expense etc.
Fair Market Value
Fair market value is the standard or fair market price of a property at the time of selling or auctioning in the open market.
Static Budget
Static Budget can be defined as the budget which never changes irrespective of the actual result. For example: If the operating expense goes above fixed amount then also this budget will not change.
Social Security Taxes
Social Security tax is levied on citizens of United States by United States Govt. Under Federal Insurance Contributions Act.
MEMO Entry
Memo entry doesn’t have any effect on general ledger, journal or balance sheet as it’s not recorded in these accounts.
Non Cash Expenses
When expenses occurred without any cash flow then those expenses are termed as “Non-Cash Expenses”. For example, asset depreciation;
Valuation Account
Valuation account is a balance sheet which combines with asset & liabilities account to find out the net carrying amount of respective assets and liabilities. Allowance for doubtful accounts, accumulated depreciation etc. termed as a valuation account.
Prime Cost
prime costs are directly related to production costs. These costs are consumed during the production process. It includes the labor cost and raw material cost as raw material and labor are the prime inputs in manufacturing a product.
Spoilage
Spoilage defines leftovers in a manufacturing process. These are also called as product wastes. These can be of two types avoidable and unavoidable.
Hurdle Rate
The hurdle rate is the minimal amount of rate of return an investor needed from his investment in a project. It also called as “minimum acceptable rate of return” (MAAR).