What Are The Three Golden Rules Of Accounting
1. What are the three golden rules of accounting?
Real Accounting:
Dr - What comes in
Cr - What goes out
Examples of this kind of transaction include cash/bank and rent.
Personal Accounting:
Debit is the receiver.
Credit is the giver.
An example of this kind of transaction is Vendor/Customer relations.
Nominal Accounting:
All gains and income are credit.
All losses and expenses are debit.
An example of this kind of transaction is sales and/or purchases.
2.Balance Sheet DEFINITION OF 'BALANCE SHEET'
A financial statement that summarizes a company's assets, liabilities and shareholders' equity at a specific point in time. These three balance sheet segments give investors an idea as to what the company owns and owes, as well as the amount invested by the shareholders.
3.What is the difference between accounts payable and accounts receivable?
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. 4.DEFINITION OF 'DERIVATIVE'
A security whose price is dependent upon or derived from one or more underlying assets. The derivative itself is merely a contract between two or more parties. Its value is determined by fluctuations in the underlying asset. The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes. Most derivatives are characterized by high leverage. 5.Introduction to Bank Reconciliation
A company's general ledger account Cash contains a record of the transactions (checks written, receipts from customers, etc.) that involve its checking account. The bank also creates a record of the company's checking account when it processes the company's checks, deposits, service charges, and other items. Soon after each month ends the bank usually mails
Real Accounting:
Dr - What comes in
Cr - What goes out
Examples of this kind of transaction include cash/bank and rent.
Personal Accounting:
Debit is the receiver.
Credit is the giver.
An example of this kind of transaction is Vendor/Customer relations.
Nominal Accounting:
All gains and income are credit.
All losses and expenses are debit.
An example of this kind of transaction is sales and/or purchases.
2.Balance Sheet DEFINITION OF 'BALANCE SHEET'
A financial statement that summarizes a company's assets, liabilities and shareholders' equity at a specific point in time. These three balance sheet segments give investors an idea as to what the company owns and owes, as well as the amount invested by the shareholders.
3.What is the difference between accounts payable and accounts receivable?
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. 4.DEFINITION OF 'DERIVATIVE'
A security whose price is dependent upon or derived from one or more underlying assets. The derivative itself is merely a contract between two or more parties. Its value is determined by fluctuations in the underlying asset. The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes. Most derivatives are characterized by high leverage. 5.Introduction to Bank Reconciliation
A company's general ledger account Cash contains a record of the transactions (checks written, receipts from customers, etc.) that involve its checking account. The bank also creates a record of the company's checking account when it processes the company's checks, deposits, service charges, and other items. Soon after each month ends the bank usually mails