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Financial Accounting Meaning, Principles, and Why It Matters

Leave a Comment / Economic / August 21, 2023

Financial Accounting Meaning, Principles, and Why It Matters   What Is Financial Accounting? Financial accounting is a specific branch of accounting involving a process of recording, summarizing, and reporting the myriad of transactions resulting from business operations over a period of time. These transactions are summarized in the preparation of financial statements—including the balance sheet, […]

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Managerial Accounting Meaning, Pillars, and Types

Leave a Comment / Economic / August 21, 2023

Managerial Accounting Meaning, Pillars, and Types What Is Managerial Accounting? Managerial accounting is the practice of identifying, measuring, analyzing, interpreting, and communicating financial information to managers for the pursuit of an organization’s goals. Managerial accounting differs from financial accounting because the intended purpose of managerial accounting is to assist users internal to the company in

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What Is a Budget? Plus 10 Budgeting Myths Holding You Back

Leave a Comment / Economic / August 21, 2023

What Is a Budget? Plus 10 Budgeting Myths Holding You Back What Is a Budget? The term budget refers to an estimation of revenue and expenses over a specified future period of time and is usually compiled and re-evaluated on a periodic basis. Budgets can be made for any entity that wants to spend money, including governments and businesses, along with

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Balance Sheet: Explanation, Components, and Examples

Leave a Comment / Economic / August 21, 2023

Balance Sheet: Explanation, Components, and Examples What Is a Balance Sheet? The term balance sheet refers to a financial statement that reports a company’s assets, liabilities, and shareholder equity at a specific point in time. Balance sheets provide the basis for computing rates of return for investors and evaluating a company’s capital structure. In short, the

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Financial Statements: List of Types and How to Read Them

Leave a Comment / Economic / August 21, 2023

Financial Statements: List of Types and How to Read Them What Are Financial Statements? Financial statements are written records that convey the business activities and the financial performance of a company. Financial statements are often audited by government agencies, accountants, firms, etc. to ensure accuracy and for tax, financing, or investing purposes. For-profit primary financial

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Net Income (NI) Definition: Uses, and How to Calculate It

Leave a Comment / Economic / August 21, 2023

Net Income (NI) Definition: Uses, and How to Calculate It What Is Net Income (NI)? Net income (NI), also called net earnings, is calculated as sales minus cost of goods sold, selling, general and administrative expenses, operating expenses, depreciation, interest, taxes, and other expenses. It is a useful number for investors to assess how much revenue

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Securities and Exchange Commission (SEC) Defined, How It Works

Leave a Comment / Economic / August 21, 2023

Securities and Exchange Commission (SEC) Defined, How It Works What Is the Securities and Exchange Commission (SEC)? The U.S. Securities and Exchange Commission (SEC) is an independent federal government regulatory agency responsible for protecting investors, maintaining fair and orderly functioning of the securities markets, and facilitating capital formation. It was created by Congress in 1934 as the first

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Capital: Definition, How It’s Used, Structure, and Types in Business

Leave a Comment / Economic / August 19, 2023

Capital: Definition, How It’s Used, Structure, and Types in Business What Is Capital? Capital is a broad term that can describe anything that confers value or benefit to its owners, such as a factory and its machinery, intellectual property like patents, or the financial assets of a business or an individual. While money itself may be construed

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Understanding Purchasing Power and the Consumer Price Index

Leave a Comment / Economic / August 19, 2023

Understanding Purchasing Power and the Consumer Price Index What Is Purchasing Power? Purchasing power is the value of a currency expressed in terms of the number of goods or services that one unit of money can buy. It can weaken over time due to inflation. That’s because rising prices effectively decrease the number of goods or

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