Capital Gains vs Income The purpose of making an investment is to gain some sort of financial benefit at the time of maturity. Profits can be in the form of income or capital gains, which will depend on how the asset is characterized, the time period held, and the purpose for which the asset […]
Difference Between Cost of Equity and Return on Equity
Cost of Equity vs Return on Equity Companies require capital to start up and run business operations. Capital maybe obtained using many methods such as issuing shares, bonds, loans, owner’s contributions, etc. Cost of capital refers to the cost incurred in obtaining either equity capital (the cost incurred in issuing shares) or debt capital […]
Difference Between Cost of Capital and Rate of Return
Cost of Capital vs Rate of Return Companies require capital to start up and run business operations. Capital maybe obtained using many methods such as issuing shares, bonds, loans, owner’s contributions, etc. Cost of capital refers to the cost incurred in obtaining either equity capital (the cost incurred in issuing shares) or debt capital […]
Difference Between Equity and Assets
Equity vs Assets At year end, organizations prepare financial statements that represent their activity for the specific period. One such statement that is prepared is the balance sheet and includes a number of items such as assets, liabilities, equity, drawings, etc. The following article discusses two such balance sheet items; equity and assets, and […]
Difference Between Surplus and Profit
Surplus vs Profit Any organization that earns income or incurs expenditure will expect to make a return from their operations in excess of the expenses incurred. Such a return, sometimes known as a profit or a surplus, is essential to any business or organization that wishes to run its operations smoothly. However, the excess […]
Difference Between Commodity and Equity
Commodity vs Equity The terms commodity and equity are quite commonly used when explaining investments and trade that take place in the stock market. The main similarity between the two is that both equity and commodities are investment assets in which investors can invest their funds by purchasing or trading. It is, however, important […]
Difference Between Debit Balance and Credit Balance
Debit Balance vs Credit Balance In accounting, a system called ‘double entry’ is used to record business transactions. The double entry system of recording requires two entries to be made in the accounting books of a firm; where one entry will be a debit entry and the other will be a credit entry of […]
Difference Between Fund Flow and Cash Flow
Fund Flow vs Cash Flow When a business prepares their year-end accounts they prepare three statements that include the income statement, Balance sheet, and the cash flow statement. Additionally, companies also prepare the retained earnings statement and funds flow statement to obtain better insight of business activities. The cash flow statement and funds flow […]
Difference Between Sales and Revenue
Sales vs Revenue All companies that operate on profit maintain income statements that record financial information. The income statement shows the total income the company receives from the sales of goods/services, the expenses that are incurred during the period of financial reporting, and the profit that is made for that period. The two figures […]
Difference Between Gross and Net Income
Gross vs Net Income A business of any kind is run with the aim of making a profit. In order to make a profit, the firm must ensure that its income surpasses its expenses. There are many types of income that are recorded on a firm’s income statement in order to assess a firm’s […]
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