The word “contra” means opposite or against. This entry involves both a cash account and bank account. In this, entries are recorded on the debit and credit sides of the cash book at same time.These entries are not recorded in ledger accounts because both aspects (credit and debit) are in ... Read More

Cash book records all the transactions related to cash in an organization. Transactions are recorded according to their type (debit or credit). These are recorded in chronological order. Cash book can be both a journal and a ledgerFeatures of cash bookThe features of cash book are explained below −Act as ... Read More

Contingent liabilities include different liabilities like warranty costs, injury claims, lawsuits etc. Each of the expenses are treated differently and it should satisfy a set of conditions before realizing.General accepted accounting principles (GAAP) have some guidelines for recognition, measurement and reporting for contingent liabilities. These are explained below −IdentificationFirst step ... Read More

Contingent liabilities and provisions are governed by the international accounting standards 37 (IAS 37). The main objective is to match asset and liabilities = income and expenses in a particular financial year, so that the financial statements reflect in a realistic manner.ProvisionIt is the present obligation that arises due to ... Read More

Liability is the amount owed to a creditor. Long term and short term liabilities are the types of liabilities.Long term liabilities are expected to pay over the years or the time frame is more than a year. However, short term liabilities are expected to pay within a year.A contingent liability ... Read More

Liabilities are current obligations which arise from the previous events. Settling these obligations causes the outflow of resources by decreasing their economic benefits. In simple words, liabilities are debt owed to others (may be a company or a person).The main types of liabilities are current liabilities, non-current liabilities and contingent ... Read More

For existence purposes, business incurs various expenditures. Some will have long term impact in profit making and some will have short term impact. To increase the business efficiency and get higher returns is the main reason by incurring expenditure.There are two types of expenditures which are capital expenditures and revenue ... Read More

Revenue expenditures are those expenditures which are incurred in normal business operations by an organization/company.In other words, revenue expenditures are the sum of expenses which are incurred in production of goods and expenses incurred in services in an accounting period. Benefits of revenue expenditure received in the same period.Revenue expenditure ... Read More

Let us understand what are capital receipts and revenue receipts, before learning about their differences.Capital receiptsThese are the non-recurring income received by the company and come under investing and financial activities.They are generated from issue of shares, government’s grants, insurance claims, bank loans or loans from financial institutions, issue of ... Read More

Let us consider different scenarios about capital and revenue and therefore, understand their categorisation respectively. Proprietor contributed the amount as his capital.Nature − Comes under capital receipt.Reason − Benefits of this contribution is for a long period of time. Amount realized by selling old furniture.Nature − Comes under capital receipt.Reasonv Purchasing furniture comes under capital ... Read More