A deficiency account is used to show the shortfall when liabilities exceed available assets, especially during insolvency or liquidation. It helps explain how the deficiency arose and what losses contributed to it. This account is mainly relevant in special financial failure or restructuring situations.
Draft
A draft is a written order directing one party, usually a bank or customer, to pay a specified amount to another party. It is...
Double-Entry Accounting
Double-entry accounting is the system where every transaction affects at least two accounts, with total debits always equal to total credits. This creates a...
Discount on Sales or Purchases
A discount on sales or purchases is a reduction in the amount payable or receivable, usually given for prompt payment, bulk buying, or trade...
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