Companies can raise finance by offering their shares to the public, employees, and even other corporations. Likewise, shares can be issued to selective investors by private placement. This article shall discuss details regarding the subscription of shares and related accounting treatment for issuing shares. What is the subscription of shares? The subscription of shares is

Definition: Statement of changes in equity can be defined as the reconciliation between the opening balance of the Shareholder’s Equity Account and the closing balance. It can be described as a financial statement that showcases summarized transactions that are related to the shareholder’s equity over a given accounting period. The main aspect of this particular

Definition: Contingent Consideration can be defined as an obligation of the acquiring entity to transfer additional assets or equity interests towards former owners of the acquired entity. The amount of consideration can be declared as significant, depending on the subsequent performance of the acquired entity. The teams under the supervision of which considerations are mostly

What is an operating asset? Operating assets are the assets required by the business to execute business operations and generate revenue. Examples of operating assets include prepaid expenses, fixed assets, inventories, cash, and accounts receivables, etc. Further, intangible assets like patents, technology, and licenses are also considered operating assets if used to manufacture and generate

Official Definition “Warranty is an implied or expressed promise of a manufacturer/vendor to a buyer, assuring that the product’s specifications, facts, and conditions are true and valid.” A business’ warranty expense is the cost of repairing or replacing items it has sold or is expecting to incur in the future. A business’s warranty period determines

Idle time is when workers are paid for an unproductive time due to some causes that may or may not be under the control of management. Idle time is typically paid to full-time laborers rather than indirect workers compensated based on the number of hours worked. Further, the business needs to control idle time as

Inventory management is one of the important areas to run and manage your business effectively. Knowing how much inventory you have at your business premises and what level should be maintained mitigates the risk of an out-of-stock situation. So, there is a need to account for inventories properly via recording journal entries of purchasing, processing,

Definition: Goods receive notes/delivery note is prepared by business to document details of the goods received from suppliers. It’s used as a supporting document while recording liability and paying to the suppliers. It serves as evidence for the delivery of specific goods quantity. So, it can be used by both seller and buyer to compare