Liabilities and obligations are the most common aspects of any organization be it small or big. This is why it’s important to take into account certain provisions to protect the organization and its members from any unforeseen circumstances or potential risks. This is where the clawback provision comes in – …

The trial balance is an accounting document with a list of all general ledger debit and credit balances. It comes in many forms. Typically, the term itself refers to the unadjusted version of the trial balance. What is the Unadjusted Trial Balance? The unadjusted trial balance is a critical accounting …

Consumption is one of the most commonly used terms in economics. It refers to the spending of money on goods and services. To achieve economic growth, consumers need to buy products from businesses, since this will help stimulate a healthy economy. Consumption is a simple concept yet plays a critical …

Net Present Value (NPV) is a financial measure that assesses the profitability of an investment by comparing future expected cash flows to initial costs. A positive NPV indicates potential profitability, while a negative NPV suggests the investment might not be worthwhile. Sometimes, companies may decide between various projects based on …

When it comes to the business world, strategy is everything! One concept that often comes into play is the dominant strategy. This refers to the best course of action for a company, regardless of what competitors may do. It eliminates the risk of the competitor outsmarting and instead focuses on …

In financial analysis, a sophisticated scoring system provides insights into potential financial manipulation within companies. This scoring approach accounts for various financial ratios and indicators to assess the likelihood of earnings manipulation or irregularities in financial reporting. This scoring system is known as the Beneish M-Score. What is the Beneish …

When companies make things, they use different materials like ingredients in a recipe. Sometimes, they use more or less of these materials than they thought. This can happen for various reasons, like mistakes, changes in how things get produced, or even the quality of the materials. Companies must determine why …

In the realm of economics, goods, and services are classified in various ways. One such classification is based on whether a good is excludable or non-excludable. When it comes to non-excludable goods, these are resources or services provided to the public that cannot be excluded from any party who wishes …

A mortgage is a loan to buy real estate, like a home, where the property is collateral. Borrowers make regular payments over many years, including the loan amount and interest. If these payments don’t occur, the lender can take ownership of the property. The borrower must record the mortgage obligation …

Stimulus checks, a form of financial aid from the U.S. government to taxpayers, play a crucial role in bolstering the economy during challenging times. These payments, made either by paper check or direct deposit, are designed to stimulate spending and revive economic activity. It can be a lifeline for individuals …