Category: ACCOUNTING

Interest income: Definition, Examples, Formula, Journal Entry

Most companies incur interest expenses for the debt finance they acquire. Sometimes, however, they may also provide funds to other entities. It usually occurs when a company invests in financial assets or securities. In that case, they may also get interest income from the underlying security. What is Interest Income? …

Accrued Liabilities: Definition, Journal Entry, Examples

The accrual concept in accounting requires companies to account for expenses when they occur. This requirement allows companies to record those expenses in the same period as they help generate revenues. However, companies may pay for them at a later date. The accruals concept does not consider the settlement relevant …

Government Funds: Definition, Types, Accounting

The accounting for government funds differs from the process for other entities. Usually, this process falls under the accounting standards for government bodies. Government funds may include various types as well. Before discussing the types and accounting of government funds, it is crucial to discuss them. What are Government Funds? …

Other Income: Definition, Examples, Types

Every company prepares an income statement that shows how it derives revenues from its operations. On top of that, it also reports on expenses related to those activities. Usually, this area includes the operating profits or losses from activities only. After that, the income statement also presents non-operating income and …

Amortized Cost: Definition, Calculation, Examples

When companies acquire financial assets, they must report them on their balance sheet. The value for these items initially comes from the costs associated with obtaining them. Later, however, companies must include them at a different amount. Accounting standards dictate what these amounts should be. Usually, this process falls under …

Expenses: Definition, Types, Examples

Expenses are a necessary evil, we all have them. You may not think about them every day but they’re always there lurking in the background of your life. They can be overwhelming and stressful if you don’t keep up with them or know what to do when unexpected expenses come …

Depreciation Rate: Definition, Formula, Example

What is Depreciation? In accounting, depreciation refers to the process of deducting an asset’s cost over its useful life. This method allows companies to spread that cost over several periods. Furthermore, it is also in line with the matching concept in accounting. This concept requires companies to match expenses to …