ACCOUNTING

Definition: Write off is a accounting entry that reduces the accounts receivable or accounts payable balance to zero, typically when the account is considered uncollectible or unpayable. Reasons for Writing Off Accounts: Accounts that are considered uncollectible or unpayable Accounts where the customer or supplier has declared bankruptcy Accounts where the customer or supplier has […]

EBITDA stands for Earnings Before Interest Taxes Depreciation and Amortization. It is a measure of a company’s operating profitability, also known as its cash flow from operations. Formula: EBITDA = Earnings Before Interest Taxes – Interest Expense – Depreciation – Amortization Explanation: Earnings Before Interest Taxes (EBIT) is the company’s total revenue less cost of […]

A cash book is a record of cash receipts and payments made by a business. It is typically used by small businesses and entrepreneurs. Components of a Cash Book: Cover: The cover of the cash book will usually have the business name and address. Index: The index is a list of accounts used to categorize […]

Capital Formation Capital formation is the process of creating, acquiring, and using assets to produce goods and services. It involves the investment of funds in physical assets, such as factories, equipment, and vehicles, as well as financial assets, such as stocks and bonds. Types of Capital Formation: 1. Private Sector:– Investment by individuals and businesses- […]

Footings Footings are structural elements that distribute the load of a structure to the ground. They are typically made of concrete, but can also be made of other materials such as stone, brick, or masonry. Types of Footings: Shallow footings: These footings are less than one foot deep and are used for small structures, such […]

Capital Account The capital account is a separate account used to track the balances of accounts that are in the nature of capital and are not used in the ordinary course of business operations. Typically, the capital account includes items such as Owner’s capital Accounts payable but not yet paid Accounts receivable but not yet […]

Sure, here’s an explanation of “cod cash on delivery”: COD (Cash on Delivery) is a payment method that allows customers to pay for their purchases with cash when the package is delivered to their door. This is a popular payment option in many countries, particularly in South Asia and Southeast Asia. How it works: Order: […]

Accounting Cycle The accounting cycle is a series of steps that accountants follow to ensure that financial records are accurate, complete, and up-to-date. It is a continuous process that consists of several key stages. 1. Planning:– Setting accounting goals and objectives- Determining the accounting software to be used- Establishing procedures and controls 2. Recording:– Capturing […]

Depreciation is a process of reducing the value of an asset over time to reflect its gradual deterioration or obsolescence. It is used in accounting and financial reporting to allocate costs over the useful life of an asset. Key Concepts: Depreciable asset: An asset that is used in the production or sale of goods and […]

The harmonic mean is a measure of central tendency that is calculated by taking the reciprocal of the average of the reciprocals of a set of numbers. It is often used to find the average of a set of numbers that have very different values. Formula: The harmonic mean (Hm) of a set of numbers […]