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Journel entry : Therecording offinancialdata (taken usually from ajournal voucher)pertaining

tobusiness transactions in ajournal such that thedebits equalcredits.Journal

entriesprovide anaudit trail and ameans of analyzing the effects of thetransactions on

anorganization'sfinancial position.

Accounts payable are amounts a company owes because it purchased goods or services oncredit from a supplier or vendor. Accounts receivable are amounts a company has a right to

collect because it sold goods or services on credit to a customer. Accounts payable are liabilities.

Accounts receivable are assets

Cash Flow Statement Fund Flow Statement

sh Flow Statement exhibits inflows and outflows of cash and cash equivalents 1. Fund Flow Statement exhibits inflows and outflows of funds

working capital) alone.

ile preparing a Cash Flow Statement, cash refers to cash in hand, cash at bank

and deposits) and short-term investments (i.e., Cash & Cash equivalents alone).

2. While preparing a Fund Flow Statement, fund refers to the

working capital (i.e., Current Assets and Current Liabilities alo

Capital expenditures(CAPEX or capex) are expenditures creating future benefits. A capital expenditure

is incurred when a business spends money either to buyfixed assetsor to add to the value of an existing

fixed asset with a useful life extending beyond the taxable year.

FIFOstands for first-in, first-out, meaning that the oldest inventory items are recorded as sold first but do

not necessarily mean that the exact oldest physical object has been tracked and sold.

LIFOstands for last-in, first-out, meaning that the most recently produced items are recorded as sold first.

Since the 1970s, some U.S. companies shifted towards the use of LIFO, which reduces their income

taxes in times ofinflation,but withInternational Financial Reporting Standardsbanning the use of LIFO,

more companies have gone back to FIFO

Accounting Finance

Definition Preparation of accounting

records

Efficient and productive

management of assets

and liabilities based on

existing information

Purpose Measuring, preparation,analyzing, and

interpretation of financial

statements. To collect

and present financial

information.

Decision makingregarding working capital

issues such as level of

inventory, cash holding,

credit levels, financial

strategy, managing and

controlling cash flow.

http://www.businessdictionary.com/definition/recording.htmlhttp://www.businessdictionary.com/definition/financial.htmlhttp://www.businessdictionary.com/definition/data.htmlhttp://www.businessdictionary.com/definition/journal-voucher.htmlhttp://www.businessdictionary.com/definition/business-transaction.htmlhttp://www.businessdictionary.com/definition/journal.htmlhttp://www.businessdictionary.com/definition/debit.htmlhttp://www.businessdictionary.com/definition/credit.htmlhttp://www.businessdictionary.com/definition/provide.htmlhttp://www.businessdictionary.com/definition/audit-trail.htmlhttp://www.businessdictionary.com/definition/mean.htmlhttp://www.businessdictionary.com/definition/transaction.htmlhttp://www.businessdictionary.com/definition/organization.htmlhttp://www.businessdictionary.com/definition/financial-position.htmlhttp://www.businessdictionary.com/definition/financial-position.htmlhttp://en.wikipedia.org/wiki/Fixed_assetshttp://en.wikipedia.org/wiki/Fixed_assetshttp://en.wikipedia.org/wiki/Fixed_assetshttp://en.wikipedia.org/wiki/Inflationhttp://en.wikipedia.org/wiki/Inflationhttp://en.wikipedia.org/wiki/Inflationhttp://en.wikipedia.org/wiki/International_Financial_Reporting_Standardshttp://en.wikipedia.org/wiki/International_Financial_Reporting_Standardshttp://en.wikipedia.org/wiki/International_Financial_Reporting_Standardshttp://en.wikipedia.org/wiki/International_Financial_Reporting_Standardshttp://en.wikipedia.org/wiki/Inflationhttp://en.wikipedia.org/wiki/Fixed_assetshttp://www.businessdictionary.com/definition/financial-position.htmlhttp://www.businessdictionary.com/definition/organization.htmlhttp://www.businessdictionary.com/definition/transaction.htmlhttp://www.businessdictionary.com/definition/mean.htmlhttp://www.businessdictionary.com/definition/audit-trail.htmlhttp://www.businessdictionary.com/definition/provide.htmlhttp://www.businessdictionary.com/definition/credit.htmlhttp://www.businessdictionary.com/definition/debit.htmlhttp://www.businessdictionary.com/definition/journal.htmlhttp://www.businessdictionary.com/definition/business-transaction.htmlhttp://www.businessdictionary.com/definition/journal-voucher.htmlhttp://www.businessdictionary.com/definition/data.htmlhttp://www.businessdictionary.com/definition/financial.htmlhttp://www.businessdictionary.com/definition/recording.html

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Goal To see how the company

is performing, to monitor

day to day accounting

operations, and for

taxing.

To forecast the future

performance of the

business.

Tools Balance sheets, profit

and loss ledgers,

positional declarations,

and cash flow

statements.

Performance reports,

ratio analysis, risk

analysis, estimating break

evens, returns on

investment, etc.

Determination of funds Revenue is

acknowledged at the

point of sale and not

when it was collected.

Expenses are

acknowledged when they

are incurred than when

they are paid.

Revenues are

acknowledged during the

actual receipt in cash as

in cash flow and the

expenses are

acknowledged when the

actual payment is made

as in cash outflow.

Revenue expenditure incurred on fixed assets includes costs that are aimed at 'maintaining' rather

than enhancing the earning capacity of the assets. These are costs that are incurred on a regular

basis and the benefit from these costs is obtained over a relatively short period of time - See

more at:http://accounting-simplified.com/financial/fixed-assets/capital-and-revenue-expenditure.

Accounts payable are amounts a company owes because it purchased goods or services on

credit from a supplier or vendor. Accounts receivable are amounts a company has a right to collect

because it sold goods or services on credit to a customer. Accounts payable are liabilities. Accounts

receivable are assets.

http://accounting-simplified.com/financial/fixed-assets/capital-and-revenue-expenditurehttp://accounting-simplified.com/financial/fixed-assets/capital-and-revenue-expenditurehttp://accounting-simplified.com/financial/fixed-assets/capital-and-revenue-expenditurehttp://accounting-simplified.com/financial/fixed-assets/capital-and-revenue-expenditure