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Accounting Identity
In accounting, finance and economics, an accounting identity is an equality that must be true regardless of the value of its variables, or a statement that by definition (or construction) must be true. Where an accounting identity applies, any deviation from numerical equality signifies an error in formulation, calculation or measurement. The term ''accounting identity'' may be used to distinguish between propositions that are theories (which may or may not be true, or relationships that may or may not always hold) and statements that are by definition true. Despite the fact that the statements are by definition true, the underlying figures as measured or estimated may not ''add up'' due to measurement error, particularly for certain identities in macroeconomics. Description The most basic identity in accounting is that the balance sheet must balance, that is, that assets must equal the sum of liability (accounting), liabilities (debts) and Shareholders' equity, equity (the value of ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Accounting
Accounting, also known as accountancy, is the measurement, processing, and communication of financial and non financial information about economic entities such as businesses and corporations. Accounting, which has been called the "language of business", measures the results of an organization's economic activities and conveys this information to a variety of stakeholders, including investors, creditors, management, and regulators. Practitioners of accounting are known as accountants. The terms "accounting" and "financial reporting" are often used as synonyms. Accounting can be divided into several fields including financial accounting, management accounting, tax accounting and cost accounting. Financial accounting focuses on the reporting of an organization's financial information, including the preparation of financial statements, to the external users of the information, such as investors, regulators and suppliers; and management accounting focuses on the measurement ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Consumption (economics)
Consumption is the act of using resources to satisfy current needs and wants. It is seen in contrast to investing, which is spending for acquisition of ''future'' income. Consumption is a major concept in economics and is also studied in many other social sciences. Different schools of economists define consumption differently. According to mainstream economists, only the final purchase of newly produced goods and services by individuals for immediate use constitutes consumption, while other types of expenditure — in particular, fixed investment, intermediate consumption, and government spending — are placed in separate categories (see consumer choice). Other economists define consumption much more broadly, as the aggregate of all economic activity that does not entail the design, production and marketing of goods and services (e.g. the selection, adoption, use, disposal and recycling of goods and services). Economists are particularly interested in the relationship betwee ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Balance Sheet
In financial accounting, a balance sheet (also known as statement of financial position or statement of financial condition) is a summary of the financial balances of an individual or organization, whether it be a sole proprietorship, a business partnership, a corporation, private limited company or other organization such as government or not-for-profit entity. Assets, liabilities and ownership equity are listed as of a specific date, such as the end of its financial year. A balance sheet is often described as a "snapshot of a company's financial condition". Of the four basic financial statements, the balance sheet is the only statement which applies to a single point in time of a business's calendar year. A standard company balance sheet has two sides: assets on the left, and financing on the right–which itself has two parts; liabilities and ownership equity. The main categories of assets are usually listed first, and typically in order of liquidity. Assets are followed by ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Business
Business is the practice of making one's living or making money by producing or Trade, buying and selling Product (business), products (such as goods and Service (economics), services). It is also "any activity or enterprise entered into for profit." Having a business name does not separate the business entity from the owner, which means that the owner of the business is responsible and liable for debts incurred by the business. If the business acquires debts, the creditors can go after the owner's personal possessions. A business structure does not allow for corporate tax rates. The proprietor is personally taxed on all income from the business. The term is also often used colloquially (but not by lawyers or by public officials) to refer to a company, such as a corporation or cooperative. Corporations, in contrast with Sole proprietorship, sole proprietors and partnerships, are a separate legal entity and provide limited liability for their owners/members, as well as being su ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Du Pont Identity
DuPont analysis (also known as the DuPont identity, DuPont equation, DuPont framework, DuPont model or the DuPont method) is an expression which breaks ROE (return on equity) into three parts. The name comes from the DuPont company that began using this formula in the 1920s. DuPont explosives salesman Donaldson Brown invented the formula in an internal efficiency report in 1912. Basic formula * Profitability: measured by profit margin * Asset efficiency: measured by asset turnover * Financial leverage: measured by equity multiplier : Or : Or : ROE analysis The DuPont analysis breaks down ROE (that is, the returns that investors receive from a single dollar of equity) into three distinct elements. This analysis enables the analyst to understand the source of superior (or inferior) return by comparison with companies in similar industries (or between industries). The DuPont analysis is less useful for industries such as investment banking, in which the underlying elements are ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Double Entry Accounting
A double is a look-alike or doppelgänger; one person or being that resembles another. Double, The Double or Dubble may also refer to: Film and television * Double (filmmaking), someone who substitutes for the credited actor of a character * ''The Double'' (1934 film), a German crime comedy film * ''The Double'' (1971 film), an Italian film * ''The Double'' (2011 film), a spy thriller film * ''The Double'' (2013 film), a film based on the Dostoevsky novella * '' Kamen Rider Double'', a 2009–10 Japanese television series ** Kamen Rider Double (character), the protagonist in a Japanese television series of the same name Food and drink * Doppio, a double shot of espresso * Dubbel, a strong Belgian Trappist beer or, more generally, a strong brown ale * A drink order of two shots of hard liquor in one glass * A "double decker", a hamburger with two patties in a single bun Games * Double, action in games whereby a competitor raises the stakes ** , in contract bridge ** Doublin ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Accounting
Accounting, also known as accountancy, is the measurement, processing, and communication of financial and non financial information about economic entities such as businesses and corporations. Accounting, which has been called the "language of business", measures the results of an organization's economic activities and conveys this information to a variety of stakeholders, including investors, creditors, management, and regulators. Practitioners of accounting are known as accountants. The terms "accounting" and "financial reporting" are often used as synonyms. Accounting can be divided into several fields including financial accounting, management accounting, tax accounting and cost accounting. Financial accounting focuses on the reporting of an organization's financial information, including the preparation of financial statements, to the external users of the information, such as investors, regulators and suppliers; and management accounting focuses on the measurement ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Identity (mathematics)
In mathematics, an identity is an equality relating one mathematical expression ''A'' to another mathematical expression ''B'', such that ''A'' and ''B'' (which might contain some variables) produce the same value for all values of the variables within a certain range of validity. In other words, ''A'' = ''B'' is an identity if ''A'' and ''B'' define the same functions, and an identity is an equality between functions that are differently defined. For example, (a+b)^2 = a^2 + 2ab + b^2 and \cos^2\theta + \sin^2\theta =1 are identities. Identities are sometimes indicated by the triple bar symbol instead of , the equals sign. Common identities Algebraic identities Certain identities, such as a+0=a and a+(-a)=0, form the basis of algebra, while other identities, such as (a+b)^2 = a^2 + 2ab +b^2 and a^2 - b^2 = (a+b)(a-b), can be useful in simplifying algebraic expressions and expanding them. Trigonometric identities Geometrically, trigonometric ide ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Money Supply
In macroeconomics, the money supply (or money stock) refers to the total volume of currency held by the public at a particular point in time. There are several ways to define "money", but standard measures usually include Circulation (currency), currency in circulation (i.e. physical cash) and demand deposits (depositors' easily accessed assets on the books of financial institutions). The central bank of a country may use a definition of what constitutes legal tender for its purposes. Money supply data is recorded and published, usually by a government agency or the central bank of the country. Public sector, Public and private sector analysts monitor changes in the money supply because of the belief that such changes affect the price levels of Security (finance), securities, inflation, the exchange rates, and the business cycle. The relationship between money and prices has historically been associated with the quantity theory of money. There is some empirical evidence of a ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Inventory Investment
Inventory investment is a component of gross domestic product (GDP). What is produced in a certain country is naturally also sold eventually, but some of the goods produced in a given year may be sold in a later year rather than in the year they were produced. Conversely, some of the goods sold in a given year might have been produced in an earlier year. The difference between goods produced (production) and goods sold (sales) in a given year is called inventory investment. The concept can be applied to the economy as a whole or to an individual firm, however this concept is generally applied in macroeconomics (economy as a whole). Unintended unsold stock of goods increases inventory investment. Definition of inventory investment *Inventory investment = production – sales Baumol, William J., and Alan Blinder Blinder, Alan S., ''Macroeconomics: Principles and Policy'', Southwestern College Publ., eleventh edition, 2008. Thus, if production per unit time exceeds sales per unit ti ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Fixed Investment
Fixed investment in economics is the purchasing of newly produced fixed capital. It is measured as a flow variable – that is, as an amount per unit of time. Thus, fixed investment is the accumulation of physical assets such as machinery, land, buildings, installations, vehicles, or technology. Normally, a company balance sheet will state both the amount of expenditure on fixed assets during the quarter or year, and the total value of the stock of fixed assets owned. Fixed investment contrasts with investments in labour, ongoing operating expenses, materials or financial assets. Financial assets may also be held for a fixed term (for example, bonds) but they are not usually called "fixed investment" because they do not involve the purchase of physical fixed assets. The more usual term for such financial investments is "fixed-term investments". Bank deposits committed for a fixed term such as one or two years in a savings account are similarly called "fixed-term deposits". Sta ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
International Trade
International trade is the exchange of capital, goods, and services across international borders or territories because there is a need or want of goods or services. (see: World economy) In most countries, such trade represents a significant share of gross domestic product (GDP). While international trade has existed throughout history (for example Uttarapatha, Silk Road, Amber Road, scramble for Africa, Atlantic slave trade, salt roads), its economic, social, and political importance has been on the rise in recent centuries. Carrying out trade at an international level is a complex process when compared to domestic trade. When trade takes place between two or more states factors like currency, government policies, economy, judicial system, laws, and markets influence trade. To ease and justify the process of trade between countries of different economic standing in the modern era, some international economic organizations were formed, such as the World Trade Organization ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
