What is the difference between revenue, income, profit, gain and return?

Every student who starts accounting and get an idea of these terms, the instinct of differentiating kicks in and he/she starts looking for the differences among these terms. Though there are sometimes minor and...

What is the difference between depreciation account and accumulated depreciation account?

Capital assets also known as fixed assets are simply such assets which are used over a period longer than one year. Although real cash outflow takes place for the whole price at the time...

Is Warranty cost capitalized or included in cost of the asset?

Warranty in simple words is a promise by the manufacturer to make good of your loss under certain conditions. This helps win customers' confidence and is one of the major consideration in buyer's purchase...

What transactions are adjusted in profit or loss to prepare statement of cash flows...

Statement of Cash Flows or Cash Flow Statement can be prepared using two methods; direct method or indirect method. As under indirect method, income statement or statement of comprehensive income is used to determine cash...

What is the difference between Finance lease and Operating lease?

According to IAS 17 two types of leases are identified namely Finance lease and Operating lease. The distinction between the two primarily resulted from the implications of one of the important accounting concept Substance...

What is the accounting treatment of Grants related to Income (Revenue Grants)?

According to IAS 20 government grants are simply assistance to the entity by the government to give or help entity get economic benefits. Such assistance can help either in acquiring or building certain asset...

What is meant by Accounting concepts and principles?

Accounting is one of the vital tools to collect financial information pertaining to business activities. The same information is used in economic decisions users make. The apex of accounting or specifically financial accounting is...

Can asset be classified as ‘held for sale’ if not sold within one year?

International Financial Reporting Standard - IFRS 5: Non-current Assets Held for Sale and Discontinued Operations recognize the fact that events and circumstances may cause the sale of asset to be delayed beyond one...

What is Source document?

In the business world buyers and sellers interact to exchange goods and services and other transactions like payment. A diligent accountant keeps the record of all such important transactions about which users must be...

How fixed assets are revalued if fair value cannot be determined using market value?

IAS 16 Property, Plant and Equipment (IAS 16) recognizes the fact that fair value of every asset may not be determined using market value basis. Although it is recommended and hardly the case where...