Normal profit is an economic metric, which reflects the viability of a business operation. Normal profit and accounting profit are two different ways of calculation. Before calculating normal profit, we have to know the explicit and implicit costs of the business operation. Normal profit occurs when the revenue generated from …
Bill discounting is a financial instrument, which allows buyers to procure goods or services and sellers to raise capital against invoice bills. In international trade, it plays a crucial role and often many reputed buyers use this method to purchase goods or services from international sellers. In this financial process, …
Making full payment at the time of business transaction is not very convenient. For this reason, most companies ask extra time for payment to their vendors, suppliers, or service providers. In the accounting term, this due payment is called “Accounts payable”. It is a legal liability for the business, where …
Taxable Income is referred to a business corporation or an individual’s compensation in order to find out the tax liability. To determine how much an organization or an individual has to pay the government for a specific tax year, gross income or the total income is used as a basis …
Accounting profit is defined as a business’s net profit which is derived by deducting all the expenses and explicit costs from the revenue. In order to calculate Accounting profit, the standards set by Generally Accepted Accounting Principles (GAAP) are followed. It is also called the Net Income of a firm. …
The term ‘perpetuity’ means what the word suggests – a never ending cash flow of a certain amount that goes on for an unspecified or unending time period. It is in essence a kind of annuity with periodic payments that begin at a certain time and then last perpetually. The …
The difference between EBIT and PBIT is that while EBIT connotes the profitability of a firm prior to the all income tax and interest deductions, PBIT connotes the profitability of a firm after the operating costs of running the enterprise have been deducted from the total revenue generated by the …
Invoice and statement is a very common term for an individual who is regularly involved in business transactions. While one might mistake one for the other, a careful study of both of them would make one realise how different these both are. An invoice is a commercial document issued to …
Also known as bin tag or stock card, Bin Card is the statement or report of the issue and receipt of the stocks from a retailing business’s store department. Bin Cards are primarily used by those retailing businesses that have a vast stock warehouse. Besides, noting down the issue and …
With the advent of the 21st Century, many of our day to day processes are being done online. Especially during the pandemic period, where basically most classes, meetings, etc. are being held online. Keeping this in view, it is no surprise that commercial activities will be left behind for any …