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Previously we discussed about “ What Does GAAP Stand Fo r ” ? Now we are in a position to understand the nature and purpose of GAAP. ü Nature of General Accepted Accounting Principles The nature of General Accepted Accounting Principles is to ensure that the fundamental rules and accounting principles should be followed by the company businesses throughout the accounting period while preparing their financial statements. General Accepted Accounting Principles sets the standards for financial reporting of the company businesses. Accounting Principles that include Accounting Concepts and Accounting Conventions are used while preparing the Financial Statements. ü Purpose of General Accepted Accounting Principles The purpose of GAAP is to provide true and fair view of financial statements to the Users of Financial Statements . For this purpose, the information provided in these Financial Statements should be reliable and accurat...

Here you will understand the concept about "What is a Ledger Balance at an ATM". Previously we discuss about Ledger Balance in detail. Here we discuss this topic from the point view of ATM. There are two kinds of balances in your checking account. Ø Opening Balance / Current Balance The opening balance is the balance of starting the business day. Ø Available Balance / Ending Balance The amount which is remained in the ledger after additions and deductions from opening balance. For Example, you have: Opening Balance = Rs.10000 Total Deposits to your checking account for the day = Rs.1000 Total Withdraws from checking account at ATM Machine for the day = Rs.3000 Available Balance = Rs.8000 The understanding of this topic is important for understanding Business Transactions related to checking account. At start, if you are not well aware about these terms, then you probably may be confuse but when you...

Can Allowance For Doubtful Accounts Be Negative? Here we discuss about “What is a Debit Balance in the Allowance for Doubtful Accounts”. If you don’t study my previous article about Adjustments in Final Accounts , then kindly read it out because without knowing the introduction about Doubtful Debt Account , you can not understand this particular topic. Allowance For Doubtful Accounts have debit balance (which is A n  U nfavora ble or A  Negative Balance)  because the amount of Actual Bad Debts Writte n Off  is greater than the   Provision For Doubtful Debts / Allowance for Doubtful Accounts . For Example, the accounts receivable for the Previous Accounting Year was Rs.70000 and there was a provision for doubtful debts of 2% on Accounts Receivable while the Actual Bad Debts Written off in the Current Accounting Period is Rs. 5400, so now we need to adjust the Balance in Allowance For Doubtful Accounts. At The Previo...

A person who sets up Entrepreneurship for making profit after meeting risks associated with carrying out the business. An Entrepreneur must take risk to get profit but at the same time he / she must be ready for the possible loss. He / She is the only boss to carry out his own company businesses. He / She has great potential to grow depending upon his / her skills, knowledge, expertise, communication skills, Self-Confidence, Effective Leadership Qualities and other necessary qualities. He / She carry out so many businesses depending upon his / her passion. He / Should should always think big in order to be successful in the market and to become Market Leader, Uniqueness in producing products or services is the key to success. So, now after reading the above article, you are in a position to understand “What is Entrepreneur or What does Entrepreneur mean.

In the previous articles we discussed about the Ledger in Principles of Accounting ,   w hich is an important step of " Steps in the Accounting Cycle " .  If you don’t read this one then kindly read so that you better know about this term. Here we discuss about What Does Ledger Balance Mean. There are two kinds of balances in the accounts of sole proprietorship, partnership or company businesses: Ø Debit Ø Credit Ø Debit Balance It means Debit side is higher than Credit side and hence to equalize both sides, the difference between Debit and Credit side is shown on the Credit side. For Example, Cash Ledger has opening balance of Rs.80000, Cash received from Customers is Rs.50000. On the credit side Rs.30000 is paid to Suppliers. As the Debit side is greater than credit side and credit side is shortage of Rs.90000 and to equalize total debits and total credits, a value of Rs.90000 is shown on the credit side and that is the ending bala...