Tag Archives: accounting

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The Basics And Pricing Of Debt Securities (Bonds)

When a company is fortunate enough to have excess cash sitting around it may invest in debt securities that are either issued by the government or other private entities. Similarly, a company in need of financing to improve its cash position may find it necessary to issue debt to investors who are interested in generating interest income in addition to any potential discount they can benefit from based on the face value of the bond.

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Accounting for Bonds

This is a continuation of “The Basics and Pricing of Debt Securities” post. If you have not read that post / are unfamiliar with how bonds are priced, please do so before reading this article.

Relationship Between Financial Statements

Relationship Between Financial Statements

Understanding the relationship between financial statements enable you to manage business operations better. The end products of an accounting information system are the four basic financial statements that can be produced. They are :

(1) The Income Statement (2) Statement of Owner’s (Shareholder’s) Equity (3) The Balance Sheet (4) The Statement of Cash Flows

While each statement tells its own story, all four of them are connected to each other directly or indirectly. Understanding the relationship between financial statements will allow you to validate the integrity of the information provided as well as allowing you to build a better foundation for more complicated financial analysis.

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How To Calculate Depreciation

Looking for a step by step tutorial on how to calculate depreciation? You’ve come to the right place! In this tutorial, we will explore how to calculate depreciation using [1] the straight line method, [2] double declining balance method, [3] units of production method and finally [4] sum of the years digits method. Not only that, you will also see how accounting journal entries correspond to each method also.