Generally Accepted Accounting Principles (GAAP)

Generally Accepted Accounting Principles, otherwise knows as U.S. GAAP, or just GAAP, are rules governing the financial reporting  of firms which issue financial securities in […]

The balance sheet, also called the statement of financial position, is a financial statement which shows the company’s assets, liabilities, and owner’s equity at a […]

An accounting journal is a form where financial transactions are initially recorded before moving through the accounting cycle. Entries are made chronologically and in accordance […]

The accounting equation states that assets = liabilities + owner’s equity. Or to put it another way, a company’s economic resources must equal the value […]

With accrual basis accounting, a firm recognizes revenues when a sale occurs regardless of when the firm receives payment for the sale. Likewise, a firm […]

Cash basis accounting refers to an accounting system where the firm recognizes sales when it receives cash from customers and recognizes expenses when it pays […]

A firm’s cost of capital represents the cost to the firm of accessing debt and equity capital. Business decision makers use the cost of capital […]

Double-entry bookkeeping is a process of recording business transactions in which each transaction affects two or more accounts.  The double-entry system was popularized by an […]

When it comes to allocating capital, most investors have limited resources and, therefore, must choose among competing alternatives. Investors make these choices with reference to […]