Accounting period is a time frame in which, business financial activities are summarised. It can be yearly, mid-year or quarterly.Accounting period is useful to analyse company performance through its financial statements. A public held company must report to Securities and Exchange Commission (SEC) on quarterly basis.If the 12-month accounting period ... Read More

In accrual concept, the transactions are recorded in the given time frame (accounting time). In this, transactions are recorded irrespective of payment made or not. Main idea is to recognise economic events by matching revenue and expenses.In this, some may pay for the goods to be delivered for the seller. ... Read More

Every transaction of a firm is recorded in two different accounts. This relates to double entry bookkeeping. That means dual aspects concept tells every transaction affects the business in at least two aspects which are equal and opposite in nature.In a single entry system, only one side of transaction are ... Read More

Payroll accounting deals with calculations and distributions of employee’s compensations like salaries, bonuses, commissions, overtime pay. It also helps higher level management to make decisions about labour cost.Type of payroll accounting includes −Initial recordings − Records gross wages, employment taxes which are owed to governmentAccrued wages − Records wages owned ... Read More

The main difference between capital structure and financial structure is that financial structure consists of left hand side of a company’s balance sheet, whereas capital structure consists of long term debt and shareholder’s fund.Capital structure is a part of financial structure. Capital structure does not include short term liabilities, but ... Read More

Capitalisation is combination of owner’s capital and borrowed capital. That means, it tells about total fund invested in a company. Share capitals, debentures, loans etc.Capitalisation is generally classified as follows −Normal capitalisation.Over capitalisation.Under capitalisation.Over capitalisationIn this, profits are not enough to pay interest on debentures and dividends to shareholders over ... Read More

Accounting process is a process, which keeps recording and processing the financial transactions of a firm. It identifies, analyses and records day to day transactions of a firm. Earlier, it was entered manually which takes lots of time and chances of making errors is high.Computerisation helps to reduce the mathematical ... Read More

These shareholders have preferential right to get dividend and initial investment at the time of winding up the company. They get fixed dividend and they don’t have voting rights.Preference share are classified into following typesCumulative preference shares − They have right to claim dividends for years, which does not have ... Read More

Equity shareholders are real owners of the company and have control over the management. Liabilities of the equity shareholders is the value of unpaid value of shares. They can’t be redeemed during the life time of the company.Features of equity sharesFollowing are the features of equity shares −Maturity of the ... Read More

Security finance is also called corporate securities. In this, funds are mobilised through shares and debentures. These kinds of funds play an important role in capital structure of a company.Characters of security finance are as followsLong term source of finance.Corporate securities.Repayment of finance is very limited.Plays major role in capital ... Read More