A business owner reviews the quarter’s numbers. EBITDA shows ₹3,50,000. Net profit shows ₹1,90,000. Both are positive and both are called “profit”, yet one is nearly double the other. Which number reflects how the business actually performed? Both do, because they answer different questions. EBITDA, EBIT and net profit measure profitability at different stages of…
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You delivered the work, sent the invoice and recorded the revenue. Three months later, the customer has gone quiet, and the accounts receivable balance on your books looks less like an asset every week. Bad debt expense is the accounting mechanism that corrects your financial statements when an invoice moves from “they’ll pay eventually” to…
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This article is general accounting education for Indian small businesses, not a substitute for advice on your specific contracts, accounting framework, or tax position. Verify revenue-recognition treatment against the applicable standard and confirm any GST position against current official GST provisions or a qualified professional. A small business receives ₹60,000 from a customer for a…
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Your transactions are recorded. The invoices went out, the payments came in, rent was paid, and salaries were debited. But before any of that feeds into your financial statements, there is a basic question: do the numbers in your ledger actually agree with each other? That is the problem a trial balance solves. This article…
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A prepaid expense is a payment your business makes now for a service or benefit it will receive later. Because the value has not been used up yet, it sits on your balance sheet as a current asset, not as an expense. It only becomes an expense gradually, as your business consumes the benefit. Here…
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A business imports a batch of products from a supplier in the United States. The purchase is quoted in US dollars. The goods take several weeks to arrive, the supplier is paid only after delivery, and by then the exchange rate has moved. In the meantime, the same business has to track inventory coming into…
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