Conflicts and different interpretations happen all the time in business. A Chinese wall is a tool that can be used to prevent these conflicts. Every business industry has different standards and different ways of looking at things. When two businesses come together, it is important to have a clear understanding …

What is an Endorsement? The term endorsement refers to signing a negotiable instrument to transfer the rights in the future. It includes writing a party’s name on the back of that instrument or other documents attached to it. Usually, there are two parties to an endorsement. The endorser is the …

Foreign investments have always been a lucrative way to make money. And with the current global market, there are more opportunities than ever before. Developing countries like China and India have been especially welcoming to foreign investors, with several benefits and protections offered. Foreign direct investment is the investment model …

An employment contract specifies the salaries or wages employees receive for their work. However, the actual amount they get may differ from that amount. Employees may wonder why the payment varies from the one mentioned in the employment contract. Therefore, it is crucial to understand how this difference generates and …

A company records transactions in its accounting systems throughout the year. These transactions come from various sources. At the end of each financial year, it summarizes these transactions in a general ledger and then a trial balance. The next step within this process is preparing financial statements. However, companies must …

A loan is a form of debt to finance various needs and operations. Companies often obtain these from financial institutions. In exchange, the lender receives interest income. Accounting standards do not allow companies to account for loans in the same accounting period. Since this finance spreads over several periods, the …

In a manufacturing business, the term “normal goods” refers to goods that show direct connections to consumers’ income and economic growth. Every company wants to produce these types of goods because they are essential for a thriving economy. These goods play a major role in business revenue and can be …

The savings and loan crisis was a major financial event that took place in the United States in the late 1980s. This crisis was caused by a number of factors, including deregulation, bad investments, and fraudulent behavior. In this blog post, we will take a closer look at what happened …

Companies use equity as a method of raising funds. Most people associate equity finance with ordinary or common stock. However, companies may also use preference shares as an alternative to obtaining funds from investors. The accounting treatment of these shares differs from that used for ordinary stock. Before discussing that, …

Companies may hold various instruments. For each, they estimate the amount they can expect to receive. In most cases, it is the same as the amount calculated under the contract terms. However, it may also differ in some cases, causing a credit loss. Companies must estimate this loss to reach …