Simple interest is usually discussed and compared with compound interest. Simple interest is named as such because the interest calculated is not compounded. In contrast, when compound interest is calculated, nominal interest rate and effective interest rate w...
Many small business owners started the businesses on their own or with minimal staff strength. Usually, the major focus of the businesses is on revenue generation and leaves the function of transactions record keeping and accounting to inexperience staff. Many...
In accounting, a business entity is treated as a separate entity from the owner(s). Therefore, any capital injections made by the owner(s) are recorded as capital contribution from owners in the books of the business entity. The owner(s)’ private expenditure...
In Example 1 of my previous post, Inventories or Stocks – Part 2, Methods of Recording in General Ledger, the cost of purchasing inventories had been fixed in order to show the effect of two different methods of recording in General Ledger clearly. In realit...
There are two common methods of recording inventories or stocks in the General Ledger of business entities:- 1. The Periodic Method 2. The Perpetual Method The choice of the method used will directly determine the double entries for the recording of inventorie...
Inventories or stocks are one type of assets to many business entities. Inventories or stocks could be in the form of trading goods/merchandise for those business entities principally engaged in purchasing the goods from suppliers and resell those goods to ...