A Cash Flow Statement is a financial report that provides a detailed summary of cash and cash equivalent transactions during a specific accounting period. It reflects how cash is generated and used through core operations, investments, and financing activities. By…
A Fund Flow Statement presents the movement of funds (working capital) between two accounting periods. It explains the sources of funds raised (like loans, share capital) and how they were applied (such as asset purchases, debt repayment). Unlike the cash…
An Income and Expenditure Account is a financial statement used by non-profit organizations to summarize their revenues and expenses for a specific period, typically one year. It determines whether the organization has a surplus (income exceeds expenditure) or a deficit…
Fixed costs are business expenses that do not change with variations in production or sales volume. These are incurred consistently over time, even if the company produces nothing. They are usually associated with time-bound obligations such as rent or insurance.…
Non-Integrated Accounting System is a method where financial accounting and cost accounting are maintained in two separate sets of books. Financial records are kept for external statutory reporting, while cost records are kept for internal cost control and decision-making. The…
Integrated Accounting System is a method where financial accounting and cost accounting records are maintained together in a single unified set of books. Each transaction records both its financial effect and costing effect simultaneously, enabling complete and real-time information without…
Bank Reconciliation is the process of matching a company’s internal cash book records with the bank statement to identify any discrepancies. It ensures that all transactions are accurately recorded and that any errors or missing entries are corrected. This helps…
The Profit & Loss Appropriation Account is prepared after the Profit & Loss Account to show the final distribution of net profit among partners or shareholders. It is used in partnership firms and companies to record how the remaining profit…
Direct income refers to the revenue earned by the business through its core operations, such as selling goods or providing services. It is the main source of income for any trading or manufacturing business and contributes directly to the calculation…
Direct expenses are costs that are directly involved in the production, manufacturing, or procurement of goods for resale. These are the essential expenses incurred to make goods ready for sale or bring purchased goods to the business premises. Without incurring…