Business entities may apply for loans or borrow money from third parties (usually financial institutions; sometimes in the form of short term loans or advances from owners, directors & etc.). THIS IS NOT A SOURCE OF REVENUE OR OTHER INCOME. This is because...
Revenue expenditure is recorded as expenses in Income Statement. Examples of revenue expenditure are office rentals, utilities such as water & electricity, printing & stationery & etc.. Revenue expenditure also includes those incurred to maintain t...
Capital expenditure refers to the expenditure made by business entities which result in non-current assets or long-term assets and therefore are recognised and shown on the balance sheet of the business entities and not charged as expense in the income stateme...
When a business entity spends money (or purchase on credit) to acquire goods or services, a decision need to be made as to the purpose and nature of the expenditure. The questions asked include something along these lines:- What did I pay for? Is the thing tha...
Cash Book is used to record cash transactions. However, due to the fact that there is a difference between cheques and the “hard cash”, normally these two types of transactions are recorded in two separate Books of Original Entry – Cheques transactions i...
Not sure about these? In my previous post on “ Accounting Documents & Accounting Cycles “, I have discussed the commonly used accounting documents (function is record occurrence of transactions) and also examples of accounting cycles (Sales, P...