Accounting

A Capital Redemption Reserve (CRR) is a type of reserve maintained by companies that issue redeemable preference shares or buy back their own shares. It serves as a safeguard to protect the company’s share capital and ensures compliance with legal requirements. Key Concepts of Capital Redemption Reserve 1. Purpose of Capital Redemption Reserve The primary […]

Capital reserves refer to funds set aside by a company from its profits, which are not distributed as dividends but are earmarked for specific purposes. These reserves are crucial for maintaining financial health, supporting growth initiatives, and cushioning against unforeseen financial challenges. Key Concepts of Capital Reserves 1. Purpose of Capital Reserves Capital reserves serve

Capital turnover refers to a financial ratio that measures how efficiently a company utilizes its capital to generate revenue or sales. It indicates how effectively a company uses its investment in assets to generate sales or revenue. This metric is crucial for evaluating the operational efficiency and productivity of a business in utilizing its capital

Carried Down is a fundamental concept in accounting that ensures the accurate tracking of financial transactions across different accounting periods. It helps maintain consistency and transparency in financial records, which is crucial for businesses and individuals alike. What Does Carried Down Mean? Carried Down refers to the process of transferring a balance from one page

Carried Forward is a term commonly used in accounting and finance to describe the process of transferring a balance from one period to another. This concept is essential for maintaining accurate financial records and ensuring continuity in accounting practices. What Does Carried Forward Mean? Carried Forward refers to the act of moving a balance from

Carrying Amount is a crucial concept in accounting and finance. It refers to the value of an asset as recorded on a company’s balance sheet. This value is important for financial reporting and decision-making purposes. Understanding what carrying amount is and how it is calculated can help you interpret financial statements more accurately. What is

Cash Accounting is a method of recording financial transactions only when cash changes hands. In this system, income is recognized when cash is received, and expenses are recorded when they are paid. This approach contrasts with accrual accounting, which records income and expenses when they are earned or incurred, regardless of when the cash transaction

A cash book is a financial journal that records all cash receipts and cash payments, including bank deposits and withdrawals. It serves as both a ledger and a journal for recording cash transactions. The cash book is essential for tracking the cash flow of a business on a daily basis. 1. Importance of a Cash

A cash budget is a financial plan that estimates cash inflows and outflows over a specific period. It helps businesses manage their cash flow, ensuring they have enough cash to meet their obligations while avoiding surplus cash that could be invested elsewhere for better returns. 1. Importance of a Cash Budget Why It’s Essential: 2.

A cash discount is a reduction in the price of a product or service offered by a seller to a buyer in exchange for prompt payment in cash or within a specified short time period. It is a common sales tactic used to encourage customers to pay earlier and improve the seller’s cash flow. 1.