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Systematic allocation means spreading a cost over time or across units using a consistent and rational method. Depreciation and amortization are common examples of...

A suspense account is a temporary account used to hold amounts when the correct accounting treatment or account head is not yet known. It...

A sunk cost is a cost that has already been incurred and cannot be recovered, regardless of future decisions. Since it cannot be changed,...

Substantive testing is an audit procedure used to verify the accuracy and completeness of financial statement balances and transactions. It may involve checking invoices,...

A subsidiary ledger is a detailed ledger that supports a control account in the general ledger. For example, individual customer balances may be maintained...

Straight-line depreciation is a method where the same amount of depreciation is charged every year over an asset’s useful life. It is simple and...

Stocktaking is the process of physically counting and verifying inventory held by the business. It helps confirm that the quantity in the accounting records...

The statement of changes in equity is a financial statement that explains how the equity of the business changed during the period. It shows...

Standard costing is a cost accounting method where predetermined costs are set for materials, labor, and overhead, and actual costs are then compared against...

A solvency ratio measures a company’s ability to meet its long-term financial obligations and remain financially stable over time. It focuses more on overall...

Share capital is the amount raised by a company through issuing shares to shareholders. It forms part of the owners’ equity and represents long-term...

Service revenue is the income earned from providing services rather than selling physical goods. Examples include accounting fees, consultancy charges, legal fees, maintenance services,...