Depreciation of Fixed Assets

If, say, the machine is purchased on 1st October and the year ends on 31st March, the depreciation will be charged only for a 6 month period. With this accelerated method, the numbers of years are first added together to determine the denominator of the depreciation...

Accounting Equation Explained: Formula & More

To solve a balance sheet, record all transactions properly and calculate total assets, liabilities, and equity using respective formulae. Finally, verify that both sides of the equation, i.e., Assets and (Liabilities + Equity) are equal. This equation is the basis for...

How to Read & Understand a Cash Flow Statement

The company records it when it receives an invoice for goods/services bought on credit, not when it pays for the purchase. Effective accounts payable management is all about getting payment timings right. But delaying payment to avoid a cash shortfall might result in...