Accounting

A:

A capital expenditure includes all costs incurred on the acquisition of a fixed asset along with subsequent expenditures that increase the asset's earning capacity, while revenue expenditure only includes costs that are aimed at maintaining fixed assets and not enhancing earning capacity. The distinction between capital expenditure and revenue expenditure is important because only capital expenditures are included in the cost of a fixed asset.

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  • How long is the CPA exam?

    Q: How long is the CPA exam?

    A: The CPA exam lasts a total of 14 hours. It has four different sections, with two sections lasting four hours and two sections lasting three hours.
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  • What is a capital contribution in accounting?

    Q: What is a capital contribution in accounting?

    A: About.com explains that a capital contribution in accounting is a segment of a company's recorded equity. The amount may be contributed using cash, equipment or other fixed assets. A common way for an owner to contribute capital to a company is to buy stocks.
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  • Why is accounting called the language of business?

    Q: Why is accounting called the language of business?

    A: Accounting is the language of business because it helps people, both internal and external, to understand what is happening inside of s business. Just as language is universal to people, so is accounting in business. Regardless of where in the world a business is located, financial information is interpreted in the same way.
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  • What are typical accounting department functions?

    Q: What are typical accounting department functions?

    A: Accounting department duties vary from one firm to the next, but generally include tracking income and expenditures, attending to payrolls, reporting and setting financial controls. Accounting departments help to manage and monitor outgoing monetary expenses by making payments and lowering the price of bills to be paid. They regulate and watch income by tracking sales and processing incoming payments and ensure that all employees are paid according to salaries listed on the company payroll.
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  • What is strategic management accounting?

    Q: What is strategic management accounting?

    A: According to a Houston Chronicle article by Grant Houston, strategic management accounting is a form of business inquiry that combines the accounting criteria of an organization with external factors that influence the organization, such as industry trends in costing, pricing, market share and resources. The goal of strategic management accounting is to provide companies with a comprehensive means to analyze future business decisions. It is more complex than management accounting.
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  • What is the ordinary annuity formula?

    Q: What is the ordinary annuity formula?

    A: The ordinary annuity formula appears as "P = r (PV) / 1 - (1+R) - n." The formula is used to calculate the periodic payment against an annuity when the rate and payments remain the same, with the first payment exactly one period away.
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  • What are examples of liquid assets?

    Q: What are examples of liquid assets?

    A: Some examples of liquid assets include cash held in a safe deposit box, checking accounts, saving accounts, money market accounts, U.S. Treasury bills and some types of retirement accounts. An asset is liquid if you can quickly turn it into spendable cash without a significant penalty or loss in the underlying value.
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  • What is income from continuing operations?

    Q: What is income from continuing operations?

    A: Income from continuing operations is ongoing earnings from normal business activity. It is what a company can expect from future earnings, such as if a company plans to continue to produce shoelaces and buttons but no longer zippers, earnings from the zippers is not calculated as income from continuing operations.
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  • What is the advantage of an accounting information system?

    Q: What is the advantage of an accounting information system?

    A: The main advantages of an accounting information system are the increased speed of processing the numbers, efficient organization, and classification and safety of inputted data. This contrasts the manual evaluation of information, which involves writing out the data by hand and doing time consuming calculations.
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  • How do you define accounting ethics?

    Q: How do you define accounting ethics?

    A: Accounting ethics refers to the standards of right and wrong conduct that apply to the accounting profession. Various accounting organizations maintain professional codes of conduct to assist accountants with upholding ethical behavior.
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  • What is the difference between operating and capital budget?

    Q: What is the difference between operating and capital budget?

    A: Operating budgets pay for day-to-day expenses, while capital budgets pay for major capital, or investment, spending, writes Kevin Johnston in an article in the Houston Chronicle's Small Business section. Understanding the differences between these budgets is critical to effectively managing business finances.
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  • What is the abbreviation of the word "accounting?"

    Q: What is the abbreviation of the word "accounting?"

    A: According to Purdue University, the abbreviation for the word "accounting" is "ACCT." Sometimes all capital letters are used, but punctuation is always included. The accounting field uses several abbreviations for terms common to the profession.
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  • How do I complete a petty cash book?

    Q: How do I complete a petty cash book?

    A: To complete a petty cash book, keep a running tally of cash in the account, deposits, withdrawals and dates. The petty cash book is a summary of trivial expenses. It can take the form of a ledger sheet or a spreadsheet, such as a Microsoft Excel file. Typically a business maintains a petty cash account for minor expenses, such as meals, flowers, stamps and office supplies, according to Accounting Tools.
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  • What are sundry expenses?

    Q: What are sundry expenses?

    A: Sundry expenses are costs which may be relatively small or occur infrequently and are therefore not assigned to a specific ledger group. They are also known as miscellaneous expenses and are classified together as a group when they are presented in an accounting statement.
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  • What is the main objective for any business?

    Q: What is the main objective for any business?

    A: Under traditional business theory, the main objective of any business is to make a profit for its owners. Only those business activities that result in the highest profit margin meet this basic objective.
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  • How do you write a monthly report?

    Q: How do you write a monthly report?

    A: Monthly reports are used by project managers and program directors to inform supervisors of the progress of projects. The reports are based on one calendar month and are usually turned in within a week after the month ends. A report typically consists of one or two pages of easily digestible information.
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  • What is the definition of "revenue allocation"?

    Q: What is the definition of "revenue allocation"?

    A: Revenue allocation is the distribution or division of total income, or revenue, in a business, corporate or government structure. It involves a complex process that entails how and where to allocate revenues in order to ensure the viability of departments and maintain the operating structure of the organization.
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  • What is the full disclosure principle in accounting?

    Q: What is the full disclosure principle in accounting?

    A: The full disclosure principle states that financial records should include all of the information necessary for readers to understand those records. This is a largely subjective principle, but full disclosure doesn't mean that records should include irrelevant information.
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  • Is accounting an art or a science?

    Q: Is accounting an art or a science?

    A: Accounting can be classified as both an art and a science. An accounting degree can be awarded as a Bachelor of Arts or a Bachelor of Science degree. Opinions on the classification may vary, but the very nature of accounting classifies it as both.
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  • What is an accounts payable aging report?

    Q: What is an accounts payable aging report?

    A: An accounts payable aging report is an accounting detail that lists the due dates of payments that a company owes to vendors. It helps a company plan how it will use available cash by revealing which invoices have been outstanding for the longest time.
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  • Why is financial reporting important?

    Q: Why is financial reporting important?

    A: Financial reporting is important because it helps to ensure that companies and organizations comply with relevant regulations and, if it is a public company, shows investors the current financial health of a company. Investors use need this data to make investment decisions, voice concerns and vote on issues at shareholder meetings.
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