Ledger is a summary of all transactions in a journal. A ledger is a record of all business transactions made by a firm. This is often called as chart of accounts.General ledger has three account types namely assets, liabilities and equity accounts. Most of the firms have almost same accounts ... Read More

Accounting is a process of making a financial report which consists of business transactions and preparing income statements, profit and loss accounts and balance sheets. The system which maintain these financial records are known as accounting system.There are different types of accounting systems, each has its own functionality. The main ... Read More

Matching concepts tells about expenses incurred during a period to be recorded in the same period in which revenues are earned. Revenues and expenses in income statement are matched for a period of time. Investors get a better idea about economics of the business.Product cost − These are tied directly ... Read More

Accounting period is a time frame in which, business financial activities are summarised. It can be yearly, mid-year or quarterly.Accounting period is useful to analyse company performance through its financial statements. A public held company must report to Securities and Exchange Commission (SEC) on quarterly basis.If the 12-month accounting period ... Read More

In accrual concept, the transactions are recorded in the given time frame (accounting time). In this, transactions are recorded irrespective of payment made or not. Main idea is to recognise economic events by matching revenue and expenses.In this, some may pay for the goods to be delivered for the seller. ... Read More

Every transaction of a firm is recorded in two different accounts. This relates to double entry bookkeeping. That means dual aspects concept tells every transaction affects the business in at least two aspects which are equal and opposite in nature.In a single entry system, only one side of transaction are ... Read More

Payroll accounting deals with calculations and distributions of employee’s compensations like salaries, bonuses, commissions, overtime pay. It also helps higher level management to make decisions about labour cost.Type of payroll accounting includes −Initial recordings − Records gross wages, employment taxes which are owed to governmentAccrued wages − Records wages owned ... Read More

The main difference between capital structure and financial structure is that financial structure consists of left hand side of a company’s balance sheet, whereas capital structure consists of long term debt and shareholder’s fund.Capital structure is a part of financial structure. Capital structure does not include short term liabilities, but ... Read More

Capitalisation is combination of owner’s capital and borrowed capital. That means, it tells about total fund invested in a company. Share capitals, debentures, loans etc.Capitalisation is generally classified as follows −Normal capitalisation.Over capitalisation.Under capitalisation.Over capitalisationIn this, profits are not enough to pay interest on debentures and dividends to shareholders over ... Read More

Accounting process is a process, which keeps recording and processing the financial transactions of a firm. It identifies, analyses and records day to day transactions of a firm. Earlier, it was entered manually which takes lots of time and chances of making errors is high.Computerisation helps to reduce the mathematical ... Read More