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Here we study about These two Accounting Terms . Both are very important for the students of Accounting Subject. Our Main Question is That: What is the Difference Between Accounts Receivable (AR)  and A ccounts Payable (AP)? Accounts Receivables or Debtors are our Current Assets of the business because we sell our products or services to our customers on Credit. For Example, if we sold goods of Rs.70000 to our Customer Mr. A, then it is a Business Transaction and Mr. A is our Customer (Account Receivable) who has to pay the amount in future date. Whereas Account Payable or Creditor is our Current Liability . It is created when we purchase our goods or services from the our suppliers or merchandisers. For Example, if we purchase goods from our suppliers Mr. B, for Rs.80000 on Credit, then it is treated as Business Transaction from the point of view of Accounting Language. Here Mr. B is our Account Payable or Creditor. ...

We can divide the study of Economics into two parts: (i) Micro Economics (ii) Macro Economics Micro means very small or it is a millionth part so we can say that Micro Economics is the study of Economy at an individual level or we study the particular unit of the whole Economy. For Example, we study the prices of particular product, firm or an industry. We study the behavior of a Consumer, ABC, etc. Company or any industry like Cotton Industry. Macro means extremely large. Macro Economics is the study of the Economy as a whole. We study the behavior of whole companies, A To Z, Industries like Cotton, Plastic, etc. and all consumers. For Example we study the purchasing power of whole customers. We Study the General Price Level of all industries. We study the productions of all companies. In Micro Economics, We study each and every individual unit. For Example, we study individual consumption, savings, incomes, etc. But in Macro Economi...

We already familiar with Current Liabilities in our previous articles but here we discuss them in more details and explain them with important examples. Current Liabilities Definition : These are the liabilities that are paid out for the current Accounting Period of time or with the total period of one year. If the Current Liabilities exceed Current Assets then it is not good position for the meeting the daily expenses and amount of Debts in future. It also indicates that Working Capital is not good and company will suffer losses in near future. So Company must improve its resources (Current Assets) to overcome this critical position of the business. Types of  Current Liabilities /  Examples of Current Liabilities Here are most important examples of Current Liabilities. ·    Accounts Payable / Su ndry  Creditors From time to time, businesses may purchase goods from suppliers on Credit basis for resale pur...

In order to make the difference between Liabilities And Owner’s Equity or Equity   or Capital i n case of Sole Proprietorship or Part nership Busi nesses , firstly, you must know about the term Equity which means that there are two types of rights or claims to the assets of the business of the company. Rights of Owners to the assets of the business are Internal sources of finance to the business and known as Owner Equity like Capital invested in the business and Rights of Outsiders are External sources of finance to the business and called Liabilities like Loan from Banks, financial institutions, etc. Now come to our main topic. There are some main differences between Liabilities and Owner 's Equity 1. Liabilities are the rights of Outsiders while Owner Equity or simply Equity is the rights of the shareholders of the company. I n case of Sole Proprietorship, it is the amou nt i nvested by the ow ner i n the busi ness to start it or t...

Financial Objectives Of New Firms / Ventures / Businesses / Entrepreneurs | Why A Company / Corporation / An Organization Needs Financial Objectives? Here, we discuss about four types of main Financial Objectives of an entrepreneurial firm. These are Profitability, Liquidity, Efficiency And Stability. Why A Company Needs Financial Objectives? Simply to survive a nd stabilize lo ng-term busi ness from fi na ncial resources i n order to get profits i n the form be nefits provided to the whole society with the use efficie nt resources. For The Success of a Business , both Newbie and already established firms must have four main objectives to survive and compete in the market place. We deal with these terms in the bellow paragraph.   Profitability It is the ability of the Entrepreneur to gain profits out of total expenses incurred for the purpose of earning revenue so that revenue exceeds the expenses and ultimately, company earn profi...