## Debits and Credits Definition Rules & Examples

In accounting language debits and credits are simply left and right side of the accounts. They merely show increase and decrease in specific accounts. Businesses under double entry accounting system record transaction minimum in two accounts. One amount will record Read More …

## Financial Ratio Analysis – Types of Ratios & Examples

Definition Financial ratio analysis is the result of dividing one financial statement item by another is financial item. Ratios help financial analysts to interpret financial statements by focusing on specific relations. In more simple words a ratio is nothing more Read More …

## Accounting Equation Definition, Examples & Explanation

The total assets at any point of time will be equal to the funds mobilized by the business i.e. creditors’ claims and owners’ equity this relationship is known as accounting equation or balance sheet equation

## Double Entry Accounting System Explanation & Examples

Double Entry Accounting system also known as double entry bookkeeping means every business transaction have two or more accounts effects

## Pro Forma Financial Statements – Example & Template

Basically a pro forma financial statements (projected financial statements) is a report prepared by the management on the basis of best estimates, assumptions and projections related to an activity or project. Such report is developed to portray, project, analyze and/or Read More …

## Cash Flow from Financing Activities Preparation & Example

Cash flow financing activities is the section of cash flow statement contains and displays the movement of those cash flows which are connected with the activities performed during the year to finance the business. A company may need cash during Read More …

## Cash Flow from Investing Activities Preparation & Example

Cash flow from investing activities is the section of cash flow statement consists of investments made in assets which in short or long run will generate profit and cash flows for the entity. Assets here would mean and include fixed assets Read More …

## Cash Flow from Operating Activities Preparation & Example

Cash flow from operating activities is the most important part of the cash flow statement. This part shows that whether and to what extent the business has generated cash from its main operations. The cash generated from operations as shown Read More …

## Cash Flow Statement Indirect Method Preparation, Format & Example

Definition indirect method cash flow statement, whereby profit or loss is adjusted for the effects of transactions of a non-cash items, any deferrals or accruals of past or future operating cash receipts or payments and items of income or expense associated with Read More …

## Cash Flow Statement Direct Method Preparation, Format & Example

Definition The direct method cash flow, where major classes of gross cash receipts and gross cash payments are disclosed. (IAS 7, Para 18). Cash flow statement classifies all the business activities into three main categories. These categories are operating, investing Read More …