Category: Financial Accounting

Fixed assets are permanent and long-term assets sources of a firm which are being used for carrying out the business operations. Continue reading What is Fixed Assets? Meaning, Definition & Importance

Trial balance is a statement which takes into account all the debit and credit balances from the ledger accounts. It is prepared in order to verify whether the balance of debit side is same as that of the credit side. Trial balance can also be defined as a statement consisting of balances of different ledger accounts on a specific date. When both the sides of trial balance tally it means that books of accounts are accurate.

Continue reading What is Trial Balance? Meaning, Definition, Format & Objectives

As balance sheet and income statement provides only limited information, it is necessary to prepare a statement which shows the changes in both assets and liabilities of the firm during a specified period of time. Such a statement is known as a funds flow statement or statement of sources and application of funds or statement showing the position/movement of working capital. Thus, with the help of fund flow statement, financial analyst can make appropriate estimation about the financial position and policies of the firm. Continue reading What is Fund Flow Statement? Meaning, Definition, Uses & Objectives

Working capital is required by the firm for the purpose of purchasing raw materials, payment of wages and other routine expenses, etc. It is required for financing current assets such as cash, marketable securities, debtors and inventories. Continue reading What is Working Capital? Meaning, Definition & Need

A cash flow statement explains the inflows and outflows of cash and cash equivalents during a specified period of time. Such inflows and outflows are classified into operating investing and financing activities during a particular period of time. Continue reading What is Cash Flow Statement? Meaning, Definition & Importance

Single entry system is actually an incomplete state of a double entry system. It is also known as “Incomplete Records System”. Continue reading What is Single Entry System? Meaning, Definition, Importance & Factors