Tag: Balance Sheet

amortisation expense formula

Amortisation

Amortisation or amortization, is the reduction in value of an intangible asset with a finite useful life over time. Its calculation is similar to that of straight line depreciation for a tangible fixed asset.

Last modified February 13th, 2023 by Michael Brown
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owners equity

Owners Equity, Capital and Retained Earnings

Owners Equity is that part of your business finance which is provided by the owners. Owners Equity includes two main components Capital which is invested as cash or cash equivalents by the owners as acapital introduction and Reserves which represent mainly profits of the business which have not been distributed to the owners.

Last modified July 16th, 2019 by Michael Brown
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types of loan capital

Loan Capital

Loan capital is that part of your business finance which is made by way of loans. Loan Capital is usually secured on business assets and sometimes personal assets of the owner. The loan capital is provided by a lender and your business is termed the borrower.

Last modified December 28th, 2022 by Michael Brown
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Creditors Basics in Accounting

Creditors are amounts which are owed by you to your suppliers, they are sometimes referred to as Accounts Payable or Trade Creditors.

If your supplier allows you credit and invoices you for a product or service and you make payment at a later date 30 days 60 days etc, then while you owe the supplier the money they are classified as a creditor of your business.

Last modified October 16th, 2019 by Michael Brown
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cash at bank cash book format

Cash at Bank and in Hand

Cash at bank and in hand refers to amounts which are held by a business in the form of notes and coins (e.g. petty cash) or which are held at a bank in the form of on demand deposits such as current accounts and savings accounts.

Last modified March 14th, 2023 by Michael Brown
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What is Stock in Accounting?

Stock is the total of raw materials, work in progress, and finished goods that a business holds for the purpose of resale. The words stock and inventory can be used interchangeably in this particular accounting context.

Last modified July 29th, 2019 by Michael Brown
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What is Inventory in Accounting?

Inventory is the total of raw materials, work in progress, finished goods and merchandise that a business holds for the purpose of sale. The words inventory and stock can be used interchangeably in this particular accounting context.

Last modified July 29th, 2019 by Michael Brown
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sales day book sales revenue

Debtors in Accounting

Debtors are amounts which are owed to you by your customers, they are sometimes referred to as Accounts Receivable. Debtors are recorded in the balance sheet of the business under the heading Current Assets, that means they are convertible into cash within a year.

Last modified October 7th, 2019 by Michael Brown
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fixed assets

Fixed Assets Basics in Accounting

Fixed assets have a long life and are for use within the business and not held for resale. They are not part of the trading inventory, and are not involved in the day to day working capital cycle of the business so are not readily convertible into cash.

Last modified October 5th, 2022 by Michael Brown
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basic balance sheet layout

Basic Balance Sheet Statement

A basic balance sheet is an accounting statement of the financial position of a business at a specific point in time. It is normally drawn up at the end of the financial year or for management accounts on a monthly basis.

Last modified June 7th, 2022 by Michael Brown
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