What is the revenue recognition principle? The revenue recognition principle dictates the process and timing of which revenue is recorded and recognized an item in the financial statements. Theoretically, there are multiple points in time at which revenue could be recognized by companies, and generally speaking, as revenue is recognized earlier, it is said to...
What are the three financial statements? The 3 financial statements are: (1) the Income Statement, (2) the Balance Sheet, and (3) the Cash Flow Statement. The core statements in financial modelling are the same core statements in accounting. In a financial model, each of these statements will impact the values within the other statements. Overview...
What are T Accounts? If you want a career in accounting, T Accounts will be your new best friend. A T Account is a visual representation of individual accounts that looks like a “T” so that all additions and subtractions to the account can be easily tracked. Each separate account will have its own individual...
What are Journal Entries in accounting? In accounting careers, journal entries are by far one of the most important skills to master. Without proper journal entries, companies’ financial statements would be inaccurate and a complete mess. An easy way to understand journal entries is to think of Isaac Newton’s third law of motion, which states...