Whether to Expense or Capitalize An Expenditure

A capitalized cost is an expense that is added to the cost basis a fixed asset on a company's balance sheet. Capitalized costs are incurred when building or financing fixed assets. Capitalized costs are not expensed in the period they were incurred but recognized over a period of time via depreciation or amortization. A fixed …

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Basics of a Balance Sheet

Balance Sheet of a Company:  A balance sheet gives the picture of assets and liabilities of the company as on the last minute of 31st March YYYY. So, many times the balance sheet of a company appears better than what it is in real. Sometimes, companies will request all debtors to clear the outstandings just …

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Profit & Loss Statement of a Company

Profit and Loss Account Statement (P&L Statement): 1. Profit = Sales - Costs 2. So, you basically have two entities: Sales and Costs.    The other names used to refer to Sales are: Fees, Income, Sales, Revenue, and Turnover.    The other names used to refer to Costs are: Expenditure. 3. Classification of Costs or …

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