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Author: Usman Ali Raza

  • How to record a Transaction

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    Usman Ali Raza
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    Recording a transactions involves documenting all the financial activities of a business in a systematic way to ensure accuracy and compliance. Why Recording Transactions Matters Accurate transaction recording is essential because it: Key Elements of a Transaction Record Each recorded transaction includes the following details: Steps to Record Transactions 1. Identify the Transaction Determine the…

  • Ledgers – Features, Types and Benefits

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    Usman Ali Raza
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    A ledger is a book or a digital record that contains all the financial transactions of a business, categorized into different accounts.

  • Owner’s Equity – Types and How to Calculate it

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    Usman Ali Raza
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    Owner’s equity also known as Owner’s Capital is a critical concept in accounting and finance, representing the owner’s stake in a business. It reflects the net value of the business after liabilities are subtracted from assets. What Is Owner’s Equity? Owner’s equity, also known as net worth or shareholders’ equity (in corporations), represents the residual…

  • Liabilities – Types and Characteristics

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    Usman Ali Raza
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    Liabilities represent the financial obligations of a business. These obligations arise from past transactions or events and require settlement in the form of cash, goods, or services. What Are Liabilities? In accounting, liabilities are defined as a company’s legal debts or obligations resulting from its operations. They are recorded on the right side of the…

  • Assets- Types and Characteristics.

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    Usman Ali Raza
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    Assets represent everything a company owns that has value and can be used to generate future economic benefits. What Are Assets? In accounting, an asset is any resource owned or controlled by a business that is expected to produce future economic value. Assets can be tangible, like machinery or inventory, or intangible, like patents and…

  • Intangible Assets – Types and Characteristics

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    Usman Ali Raza
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    Intangible assets are non-physical resources that hold significant value for a business. Unlike tangible assets, these cannot be touched or seen but contribute to a company’s operations and profitability. What Are Intangible Assets? Intangible assets are resources without a physical form but with monetary value. They provide long-term benefits, such as generating revenue or enhancing…

  • What is the Accounting Process

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    Usman Ali Raza
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    The accounting process is a systematic way to record, organize, and analyze financial transactions of a business. These steps ensures accuracy in financial reporting and helps businesses make informed decisions. 1. Identifying Financial Transactions The first step in accounting is to identify transactions that need to be recorded. These could include: Only transactions that have…

  • What is the Accounting Equation

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    Usman Ali Raza
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    The accounting equation is the foundation of all double entry accounting systems. It explains the relationship between what a business owns, what it owes, and the owner’s stake in the business. What is the Accounting Equation? The accounting equation is: Assets = Liabilities + Equity This formula represents the financial position of a business. It…

  • What is the Double Entry Accounting

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    Usman Ali Raza
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    Double entry accounting might sound fancy, but it’s just a way to keep your money records neat and balanced. It helps you see where your money is coming from and where it’s going. Let’s break it down so it’s super simple. What is Double Entry Accounting? Double-entry accounting means every time you record a money…