Accounting Convention: Definition, Methods, and Techniques

Accounting Convention: Definition, Methods, and Techniques

What Is an Accounting Convention? Accounting conventions are guidelines used to help companies determine how to record certain business transactions that have not yet been fully addressed by accounting standards. These procedures and principles are not legally binding but are generally accepted by accounting bodies. Basically, they are designed to promote consistency and help accountants overcome

Accounting Cushion Definition

Accounting Cushion Definition

What Is an Accounting Cushion? An accounting cushion is a term used to describe an intentionally excessive expense reported on a company’s financial statements in order to even out fluctuations in earnings across periods. Management can use these inflated numbers to artificially understate income by overstating liability or allowance accounts. Making larger provisions for profit-eroding

Timing and How It Works

Timing and How It Works

What Is the Accounting Cycle? The accounting cycle is a collective process of identifying, analyzing, and recording the accounting events of a company. It is a standard 8-step process that begins when a transaction occurs and ends with its inclusion in the financial statements. The key steps in the eight-step accounting cycle include recording journal

Speeded up Vesting Definition

Speeded up Vesting Definition

What Is Accelerated Vesting? Accelerated vesting allows an employee to speed up the schedule for gaining access to restricted company stock or stock options issued as an incentive. The rate typically is faster than the initial or standard vesting schedule. Therefore, the employee receives the monetary benefit from the stock or options much sooner. If