The major differences between depreciation and amortization are as follows −DepreciationIt determines asset useful life.Charged on tangible assets.Annual depreciation = (cost of tangible asset – salvage value)/useful life.Have salvage value.International accounting standard (IAS-16)/accounting standard (AS-6).Residual value is considered.Straight line method, reducing balance method, units of production method.AmortisationDetermined on the basis ... Read More

The major differences between Net present value and internal rate of return are as follows −Net present valueInternal rate of returnExpressed in absolute terms.The surplus amount of project.Helps in decision making.No effect of Variation in cash outflow.If NPV is greater than 1 then the project is accepted.Helps to take constructive ... Read More

The major differences between cash flow statement and fund flow statement are as follows −Cash flow statementInflows and outflows of cash and cash equivalents.Main purpose is to show the movement of cash.Cash basis of accounting.Short term analysis.Inflows and outflows of cash.Contains both opening and closing balances of cash and its ... Read More

The major differences between the general ledger and sub-ledger are as follows −General ledgerMaster account in which accounting transactions are recorded.Account receivables account payable, cash management, bank management and fixed asset.Have different characteristics for different transactions.One ledger account.Data volume is limited.Have a chart of accounts.Controls sub-ledger.Trail balance prepared.Sub ledgerIntermediate set ... Read More

The major differences between general journal and general ledger are as follows −General journalAll financial transactions are recorded.Subsidiary book.The primary step to record before ledger.The process of recording transactions are called journalizing.Narration is compulsory.No need of balancing.It has simple format.Recorded as per transaction date.Debit and credit recorded in column-wise.Follow concept ... Read More

The major differences between a cash account and cash book are as follows −Cash accountCash bookIt is an account in a ledger.Transactions are made from journals.Serves the purpose of a ledger.Dependent on journal daybook.One type of cash account.Represents only cash balances.Journal folio.Cash transactions are recorded in the journal and then ... Read More

The major differences between profit and loss account and trading are as follows −Profit and loss accountRepresents profit earned or loss sustained.It ascertains net profit for a period.The balance is transferred to the capital account.Operating and non-operating incomes and expenses.It is prepared after trading account.The second step in preparing final ... Read More

The major differences between profit and loss account and profit and loss appropriate account are as follows −Profit and loss accountIt is prepared by all types of businesses.It doesn’t have an opening or closing balance.It is prepared after trading account.The items debited are all expenses.Not based on the partnership agreement.The ... Read More

The major differences between trail balance and adjusted trail balance are as follows −Trail balanceLedger account balance complied without any period-end adjustments.It is prepared first.It is account balances.To check the arithmetical accuracy of ledger.Checkbooks of accounts are balanced.It is less accurate.Only one version prepared.It is prepared in columnar format.Adjusted trail ... Read More

The major differences between trail balance and general ledger are as follows −Trail balanceIt is a statement of debit and credit balances.It is called a trail balance only.It summarises all ledger accounts.It may or may not contain suspense accounts.It can’t be analyzed details.No classification of accounts.It is prepared on final ... Read More