Few Basic Yet Important Concepts Of Accounting

Accounting is not an easy career, as it needs an attentive mind to play numbers game and calculations in the world of business. Whenever an accountant is hired, he must be expert in playing with numbers, recording figures, controlling the assets and managing cash flows. Other than these terms, an accountant must be able to answer to few questions such as how the company’s competitive edge will be measured in terms of employees’ expertise and how to translate products and services into sales value and so on.

To answer all these queries, an accountant must have formal education as an accountant and must undertake accountancy training courses to refresh knowledge. He must also be clear about few basic and important concepts of accountancy. These terms are:

Revenue Recognition: Revenue recognition is an accountancy principle that is used to measure company’s revenue based on regardless of what the company has been paid. It includes money that a company will receive in a given period of time, despite the amount the company has at that time. For instance, if you sell your products but your customers have not paid you yet, the expected money will be listed as revenue recognition.

Fixed Assets: Fixed asset is anything that has value but company cannot easily sell or liquefy it. Property, Plant and Equipment come under this heading.

Intangible Assets: It is not essential that every asset a company has must be actual physical objects but things that are not physical and does not have any clear way of measuring their value, are actually known as intangible assets. For instance, professional expertise of a company is its tangible asset.

Goodwill: Goodwill is a tangible asset that has been given some sort of monetary value when they have been sold. For instance, the brand’s name of a company is its goodwill. If the company decides to sell the business, the value of the brand name will be listed as goodwill and will be sold accordingly. See UK's top ranked payroll training courses planner for more details.