Accounting Miscellaneous

The long term assets that have no physical existence but are rights that have value is known as Intangible assets. An intangible asset is an asset that is not physical in nature. Goodwill, brand recognition and intellectual property, such as patents, trademarks, and copyrights, are all intangible assets.

Net income equal to Revenues minus Expenses. Revenue is the income generated before any expenses are taken out. Therefore, when a company is said to have “top-line growth,” the company’s revenue is growing. Revenue is also called net sales which is revenue minus any returns of purchased merchandise.

A cheque returned by bank marked “NSF” means that There are not sufficient funds in your account. Non-sufficient funds (NSF) is a term used in the banking industry to indicate that a cheque cannot be honored because insufficient funds are available in the account on which the instrument was drawn.

The matching concept matches revenues with expenses. The matching concept is an accounting practice whereby firms recognize revenues and their related expenses in the same accounting period.

In accounting, an economic event is referred to as Transaction. An accounting event is a transaction that is recognized in the financial statements of an accounting entity. In accounting, a transaction includes such things as recording the depreciation of an asset or payment of dividends. Accounting events can be either external or internal.

Provision for doubtful debts account is an Contra asset account. It is used along with the account Accounts Receivable in order for the balance sheet to report the net realizable value of the company’s accounts receivable.

The sales journal is used to record all of the company sales on credit. Most often these sales are made up of inventory sales or other merchandise sales.

Every business transaction affects at least two accounts, our accounting system is known as a double-entry system.

Commercial accounting is based on Double entry book keeping. Commercial accounting is something about providing right informatin to right people on right time. In commercial accounting, the system is maintained by the business organizations. The main objective of commercial accounting is to know the profit or loss and the financial position of any business.

Fixed asset are shown at written down value in Balance sheet. If the asset is not impaired and the company operates under GAAP, then the cost model must be used.