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Dividend is the amount of profits distributed to shareholders or stockholders in a company or corporation periodically usually annually. It is a Contra Equity Account which is deducted from the Equity on Balance Sheet . The normal balance of dividend account is Debit as it is the reversal of Equity . When the company paid it to shareholders, then it is deducted from equity and when is payable by the company to shareholder, then it is co nsidered as a Current Liability , “Dividend Payable”is created. Cash Dividend Paid To Shareholder / Stockholder In Cash Flow Statement Cash Dividend paid is shown on Cash Flows Statement under Cash from Financial Activities that is obtained by adding any decrease in dividend payable to dividend declared or ducting any increase in dividend payable to dividend declared during the accounting period. Dividend T-Account is prepared to record Transactions related to it. The closing ...

What is Tradi ng Account? The Tradi ng Account is the part of Cost of Goods Sold Statement i.e., it is related to finished goods or completed goods which have been manufactured in a industry. It is prepared to calculate Gross Profit or Gross Loss for the accounting period. It is a type of Ledger where Direct Revenues such as Sales on Credit Side and Direct Expenses such as Purchases on Debit Side are recorded. It is not prepared for Services Companies as it is related to goods or products. If the Credit Side is greater than Debit side, then there is Gross Profit but if the Debit Side exceeds the Credit Side, then there is Gross Loss. In the calculation of Gross Profit, the Closing Stock or Ending Inventory is valued at the cost which includes those goods unsold at the end of the accounting period and it must be offset with the revenue of tha t particular  period according to Matching Principle Gaap as the all the cost incurred in ear...

Equipment Is What Type Of Account Is Equipment A Current Asset ?  No,  Equipment is a Fixed Asset  On Non Current Asset having useful life of more than one year. The Rules of Debit And Credit is the same for equipment as for any Asset . The normal balance for Office Equipment is the Debit, However, it is debited when we purchase it or add cost (such as installation costs, Direct Material, Labour expenses, etc.) to it for its acquisition i.e., when Capital Expenditures incurred on it but when we sold out old Office Equipment due to improved technology that makes us to replace it for the new one, then we credit it. Equipment On Financial Statement i.e., Balance Sheet Equipment T- Account or Ledger is prepared to record all Business Transactions related to it and ending balance will go to Balance Sheet under the Section of Fixed Assets or No n Current Assets On Assets Side.

Micro Economics comes first as it is the basic of economics to study the behaviour of an individual unit or common man living in the society. After you well know about an individual unit, now you can easily learn the total productivity or output at the aggregate level. ( Macro Economics ). As far as Micro Economics Theory , due to calculation Yes, it is difficult to understand as the first step is always difficult but becomes easy and easy as you grow. So, You need full concentration on this basic step and soon after that you will have better know-how about the behavior of a particular unit in an industry or how to study the behavior of a common person living in the society. Now, after that Macro Eco nomics becomes easy for you. Macro Economics has less calculations base on Macro Economics Theory. So, you should take both Micro Economics And Macro Economics at the same time as both have strongly interdependence with each other. If you ignore one you c...

A Balance Sheet shows financial position of a business at a particular time in a specified date. It is very important financial statement for the Users of Financial Statements because it provides reliable information that is Material to them. A balance sheet consists of Assets , Liabilities and Equity . It Has two Sides. One is Assets Side and other one is Liabilities And Equity Side. Assets are the Useful resources for the business owned by it. Assets are further categorized as Current Assets And Fixed Assets / No n Current Tangible Assets And Intangible Assets . Assets are Listed on Balance Sheet In The Order of Liquidity i.e. the most liquid asset comes first and then next most liquid asset and so on. Cash is the most liquid asset, so it comes first while Goodwill comes last as it has less liquidity as compare to other assets. On Liabilities And Equity Side, firstly, Liabilities are shown then Equity. Liabilities are further listed under Current ...

Debt Vs Equity Financing Pros And Cons 1. A Debt is the Long-Term Liability of a business. It is payable over long period of time i.e., more than one year to outsiders of t he  busi ness i.e., c reditors,  ba nks, fi na ncial i nstitutio ns,  etc . The best Example is Bank Loan. It is financed by the business to utilize different projects or to start a business when the group of people lack sufficient funds but have skills to establish a well renowned business. T his process of raisi ng mo ney for various projects of t he  busi ness is called De bt Fi na nci ng  while Equity is the right of the owners of the business (Shareholders or Stockholders) who invested in the business in order to get fair return (Dividend) of their investments in the form of Share Investments in a company or corporation a nd suc h way of raisi ng mo ney for ru n ni ng  various projects of t he  busi ness is called Equity Fi na nci ng. 2. A Debt is payabl...

Assets on Balance Sheet are sorted in the order of Liquidity i.e. the most liquid asset comes first and then the next most liquid asset and so on. Cash is the most liquid asset, so it comes first then, Cash Equivalents are the most liquid assets, so these come in the second position, then Accounts Receivable , Inventory , Accrual And Deferrals  or  Prepayments . Then Fixed Assets or No n Current Assets and finally under Intangible Assets, Goodwill comes the last one to record in the Balance Sheet. Order Of Assets On Balance Sheet (According To Liquidity)   1. Cash (First One) 2. Cash Equivalents (Capital Money such as Shares, etc,) 2. Accounts Receivable / Su ndry Debtors 3. Inventory / Stock / Merchandise 4. Prepaid Expe nses / Accrued Incomes or Revenues 5. Fixed Assets / No n Current Tangible Assets 6. Intangible Assets (such as Patents, Franchises, Copyrights, Licenses, etc.) 7. Final Asset i...

Expenditures are the costs against which payment is made in advance but the benefits against which are received later on. The benefits will be received within one year known as Revenue Expenditures or Expenses or Expired Costs while if these are received for more than one year, then these will be treated as Capital Expenditures . Examples are Acquiring Costs of Fixed Assets , Cost of Acquiring Intangible Assets , Wages paid for the installation of machinery, construction of the buildings, Salaries, Expenses, Outstanding Expenses , Prepaid Expenses , Unearned Revenues , Accrued Incomes / Revenues , etc. You may also be interested in, “ Expenditures VS Expenses ” Types of Expenditures Capital Expenditures are those costs which acquired by the business for more than one year. These are incurred for acquiring Fixed Assets / No n Current Assets. Examples are Purchasing Costs of the Machinery, Buildings, Furniture, etc., Additions To Machinery, ...

O nly those Expenditures are Capitalized which are of Capital Expenditures in N ature and only Revenue Expenditures are categorized as Expenses . Revenue Expenditures are, in fact, Expenses or Expired Costs because these can be utilized and benefits will be expired within the one year. Theses are incurred for running daily working of the business’s operations. Examples are Rent, Salaries, Wages, Utility Bills, etc. See Also, “ Differe n ce Betwee n Expe nditures And Expenses ” Those expenditures which are acquired by the business for long-term basis especially i.e., for more than one year, need to be capitalized. An Example could be addition and installment cost added to the cost of Machinery that is a Fixed Asset / N on Current Asset . Any cost incurred for the installation of Machinery will be part of the cost of the Machinery. It is capitalized as it is the part of the cost of the Machinery and used for more than one year.

This statement of ow ner's equity  shows the changes in Owner’s Equity over the accounting period due to profitable activities of the owners of the business. It is prepared to calculate the value of Owner’s Equity or Capital Account in case of Sole Proprietorship while Statement of Changes In Equity is prepared in case of Companies or Corporations businesses. Statement of Owner’s Equity Format Example                                                                                      Rs. Opening Capital                                                          XXX + Ad...