Consignment is a unique business arrangement where goods are sent by the consignor (owner) to a consignee (seller) to sell on behalf of the owner. While the ownership of the goods remains with the consignor until sold, the consignee plays a key role in the distribution and sales process. This setup involves various types of … Read more
In accounting, changes are sometimes necessary due to updates in accounting standards, error corrections, or changes in estimates. When these changes occur, accountants must choose how to apply them either retrospectively or prospectively. The decision between retrospective and prospective accounting significantly affects how financial information is presented and interpreted. Understanding the difference between these two … Read more
When a business rents a property and makes significant changes or upgrades to improve its usability, those changes are known as leasehold improvements. These modifications can include installing new lighting, constructing partitions, adding flooring, or redesigning interiors to suit business needs. Although the company doesn’t own the property, it still incurs costs that need to … Read more
Companies sometimes face financial difficulties that cannot be solved through external funding or new investments. Instead, they choose to reorganize internally by adjusting their financial structure without changing their legal identity. This process is known as internal reconstruction. It is often used as a strategy to clean up the balance sheet, eliminate accumulated losses, or … Read more
When companies borrow money through debentures, they agree to pay back the borrowed amount either at face value or with additional compensation. In some cases, debentures are redeemed at an amount higher than their nominal value. This excess amount is referred to as a premium on redemption of debentures. The premium is a financial obligation … Read more
In the world of accounting, every financial transaction is recorded through a system of debits and credits. One common area where this principle applies is in tracking utility expenses. Whether it’s electricity, water, gas, or internet services, these utilities are considered essential operating costs for businesses. When a utility bill is recorded, it is classified … Read more