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Stockholders Equity is calculated through different methods and Formulas. In the previous article, We already studied about “ How To Calculate Stockholders Equity ”. In this article, Stockholders Equity was calculated by preparing Statement of Stockholders Equity. If you don’t read this article, then you can study this article as well in order to get better understanding of this particular topic. You may also be interested in “ What is Owners’ Equity ” Stockholders Equity is the Rights of Shareholders who invested in the company’s business. Stockholders Equity is Calculated Through Accounting Equation Or Shares Capital, Reserves, Shares Premium, Retained Earnings, Net Income / Net Loss or Net Profit / Net Loss and other Dividends. Mathematically, we can write as:                                                     ...

Here, we study about most important Accounting topic that is “Closing Journal Entries”. What are Closing Journal Entries? Closing Journal Entries Definition Closing Entries are related to closing accounts of Revenues, Expenses and Dividends at the end of Accounting Period. At the end of Accounting Period, all the Temporary Accounts ( Revenues , Expenses And Dividends) are closed in order to bring down the balance of these types of account to Zero and transferred these accounts (Revenues And Expenses) to a Temporary Accou nt that is " I ncome Summary Account" that is different from    Income Statement or Profit And Loss Account and then finally Profit Or Loss, that is calculated from Income Summary Accou nt , is transferred to Statement of Retained Earnings . Dividend is the amount distributed to shareholders out of profits, so it is closed by transferring to Statement of Retained Earnings. Note: 1. Permanent Accounts ( Assets , Liabilitie...

Here we are concerned with Net Sales Calculation. You may also be interested in, “ Credit Sales Journal Entry With Example ” In order to arrive Net Sales, Sales Returns & Allowances and Sales Discounts are deducted from Total Sales or Gross Sales. Mathematically, we can write / type as shown below: Net Sales = Gross Sales - Sales Returns - Sales Allowances - Sales Discounts For Example, if the Gross Sales is Rs. 1000000, Sales Returns is Rs. 100000, Allowances is Rs. 50000, Discounts is Rs. 100000, then Net Sales is Calculated as follows: Net Sales = 1000000 - 100000 - 50000 - 100000 = 750000 Net Sales is Reported On Trading & Profit And Loss Account or Income Statement to calculate Gross Profit for the business in the Current Accounting Period. In case of Services Company, Net Sales is reported on Income Statement or Profit And Loss Account in order to give true and fair view of Financial Statements th...

Here, we will study about, “How To Calculate Average Accounts Receivable / Average Debtor in Accounting”? You may also be interested in “ How To Calculate Accounts Receivable On Balance Sheet ” Average Accounts Receivable or Average Debtor is the sum of Opening Accounts Receivable and Closing Accounts Receivable divided by 2. Mathematically, we can use the following formula: Average Accounts Receivable Debtor Formula: Opening Accounts Receivable + Closing Accounts Receivable / 2 Here Beginning Accounts Receivable / Debtor is the Closing Balance during the Last Account Period and Closing Balance of Accounts Receivable is calculated during Current Accounting Period. Example: If the Accounts Receivable For The Previous Accounting Period is Rs. 600000 and during the Current Accounting Period is Rs. 8000000, then Average can be found as shown below: Average Accounts Receivable = 600000 + 800000 / 2 = 700000 If the Average of...

Here we will study about, “How To Calculate Accounts Receivable On Balance Sheet”? Accounts Receivable is calculated by preparing Accounts Receivable‘s Ledger in T Account Form or Self-Balancing Form. There is the Opening Balance that is the Previous Accounting Period’s Closing Balance. Credit Sales during the Current Accounting Period is added but Sales Return is deducted. Discount Allowed is deducted from the Beginning Balance of Accounts Receivable / Debtor. Cash Received from customers for goods sold or services rendered by the business is also deducted from the Opening Accounts Receivable Balance. Accounts Receivable T Account is shown below:                                       Rs.                                                ...

Accounts Receivable Aging Report Definition This report shows the Number of Accounts Receivable / Debtors or Customers that make periodic payments to Company during the Accounting Period. It shows those time periods of Unpaid Invoices during which the customers are still not making payments to company due from them for the goods sold or services rendered on account. As Accounts Receivable Aging Report shows the Customer Behavior in making over dues payments, so it is helpful in determining  the  Allowance For Doubtful Debts . The Customer for whom the invoices remain unpaid over longer period of time, the company uses Higher Fixed Percentage of Total of Uncollectible Accounts Receivable. For Example, if the customer pays over 90 days, then the company may apply 15% To 20% of Total Uncollectible Accounts Receivable in order to get more accurate comparison between Actual And Unpaid Sales. Accounts Receivable Aging Table is Prepared ...