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Different Types of Balance Sheets Explained

A balance sheet presents the sources of money (Liabilities and Owners’ Equity) and the uses (Assets) of a business.  In general, for public financial disclosers under standard accounting principles (like GAAP, IFRS) there is only one type of balance sheet. But companies whether they are private or public on the other hand, can establish various internal balance sheet based on their preferences. Management accountants generate internal financial records regularly, and are not regulated because the users are their management. There are many different types of balance sheets companies can pick from. The two key types ...Read More

Pros and Cons of Common Size Analysis

One of the techniques in overall financial statement analysis is preparing a common size analysis of a business where you can compare its financial position and performance year by year (time-series) or through comparing it with other companies (cross-sectional). But the question is, how actually good is common size analysis and what are its limitations? The key benefit of common size analysis is it is easy to understand providing initial perception about the financials. While the main limitation is that there is no standard ratios to follow and the company size is not considered in ...Read More

6 Reasons Why Accountants Should Learn to Code

Should accountants learn to code? Yes. This is because both coding, which involves the use of programming language, and accountant feature arithmetic and analytical properties. Accounting mainly features patterns that relate to capturing, storing, managing, and analysing data. Accountants also work with systems such as payroll, cash flow, assets, and accounts receivables/payable among others. all these are related to programming because for these systems to run, they must be programmed first. Attribution: The icons has been designed using resources from Flaticon.com So, a combination of accounting and programming skills can help to significantly ...Read More

Finance vs Accounting – Which Should You Study?

If your career interest lies in dealing with numbers, you're probably on the lookout for a degree in a relevant field. While some guides may recommend you take up finances, others may suggest an accounting course. So, which one is best for you? Accounting, in an organisation, deals with the information behind financial transactions. Finance, on the other head, is the management of these transactions. While accounting majorly involves record-keeping, finance is about planning. Attribution: The icons has been designed using resources from Flaticon.com   Major Differences Between Accounting and Finance Careers Now ...Read More

5 Limitations of Profitability Ratios

Profitability ratios analysis is a good way for measuring the performance of a company. It is the reason how businesses know if their capital allocation is right. Of course every positive has its negatives. Let us focus on its limitations in this post. The main limitation of profitability ratios is that they are focused on the business performance generally in terms of income and expenses for a specific period of time. It disregards the financial strength of the business and the overall long-term outlook.   This means using other ratios along profitability ratios is important ...Read More

5 Key Limitations of the Balance Sheet

The first  financial statement for any business is the balance sheet. When money comes in, owners/banks inject the money and the assets in the business increase. Such statement makes the balance sheet is an indispensable source for business decisions when it comes to allocating resources and funding. A balance sheet offers insight into a company's financial status as well as a piece of critical information regarding an entity's ability to continue to survive and operate its business operations for the foreseeable future. But the question in this post is what are the limitation of the ...Read More

Explaining Accounting Recording Process in 5 Simplified Steps

Most people think of accounting as the financial statements (income statement, cash flow, and balance sheet). But in realty a major part of accounting is the bookkeeping process which starts from receiving the invoice/receipt step to the reporting/presentation step. I know that there is much depth in a whole accounting process, otherwise organisations will not have stacked departments with accountants for many different roles. But generally, accounting recording process includes receiving the invoice/receipt, analysing/verifying, recording/storing, and reporting/presenting. Attribution: The icons has been designed using resources from Flaticon.com   In this post we will ...Read More

April 21, 2021|Accounting|

Is Accounting a good job for the future?

Are you a logical thinker? Do you find finance, math, and business interesting? Do you like helping people to stay organized and help businesses run efficiently and effectively? Then accounting may be the right career to pursue. But "wait," you might ask, "what about future job prospects of going through this path?" That is a valid concern with any professional pursuit, especially since the modern economy changes rapidly and considerably. In some cases, jobs, products and entire fields (film developers, anyone?) disappearing in short order. When it comes to accounting, you can rest assured that ...Read More

What is the Difference Between General Ledger and Subledger?

The process of accounting usually appears intimidating to a lot of people, especially when they start reading terms like general ledger and subledger. They are just technical terms that could confuse someone who does not know accounting otherwise it should be straight forward. Let us take one step backward and look at where the term ledger and subledger come up. When the business does a financial transaction like a receipt for a purchase or an issued invoice to a customer, the accountant records that transaction in their books. The general ledger is that central repository ...Read More

January 23, 2021|Accounting, Accounting Terms|

Will Accounting Be Automated? 4 Reasons Why It Is Hard?

Since the industrial revolution, there have been numeral technological evolutions that have altered jobs. Technology has led to the systemisation and automation of jobs, which constantly threatens employees. It leads us to ask ourselves whether accounting can be automated by technology and whether your career is at risk? Will Accounting Be Automated? Different studies indicated that accounting has a high chance of being automated. In contrast, others simply show lower chances due to the complication of accounting. Optimists still hold on to the option that accounting is a pretty safe career that is not at ...Read More