Difference between book value and market value? Book Value: book value of an asset is simply its original purchase cost, adjusted for any subsequent changes, such as for impairment or depreciation. Market value Market value is the price that could be obtained by selling an asset on a competitive, open market. There is nearly always […]
What does Accrual Basis Mean in Accounting
What is Accrual basis of Accounting? Accrual Basis Accounting is an accounting method or its a system whereby revenues are recognized when earned and expenditures are recognized in the period incurred, without regard to the time of receipt or payment of cash. This method of accounting allows a more accurate evaluation of operations during a given […]
What is Amortization
What is Amortization: The intangible assets whose property right is obtained for the specific period of time diminish in value with the passage of time this called as amortization. The example is patient rights, copyright, goodwill etc similarly, the value of leasehold property also decreases with the passage of time. In business terms, […]
Special Journals and Subsidiary Ledgers in Accounting
Define Special Journal in Accounting Special Journal is any accounting journal in the general journal that is used to record and post similar types of transactions. We can also define , it’s a place where similar transactions can be recorded and organized, so bookkeepers and accountants can keep track of different business activities. Special Journals Special […]
What is Contra Account in Accounting
This post will explain what a contra account is and how it works to correctly show the value of a organization’s financial statements. It will also provide examples to show the effect of contra entries. What is Contra: Contra means against. In Accounting terms, a contra account refers to an account which is balanced […]