A financial ratio (or accounting ratio) is a relative magnitude of two selected numerical values taken from an enterprise's financial statements. Often used in accounting, there are many standard ratios used to try to evaluate the overall financial condition of…
When the cost items cannot be directly charged to or accurately traceable to a particular cost center, then such items of cost are prorated amongst various cost centers, on an equitable basis, this process is known as cost apportionment. It…
Allocation of cost, implies the entire distribution of the overhead item to the departments on a logical basis. It represents that part of cost attribution, which charges a particular cost to a cost unit. Allocation of cost is directly assigned…
Capital Transactions The business transactions, which provide benefits or supply services to the business concern for more than one year or one operating cycle of the business, are known as capital transactions. The transactions which relate to capital are again…
Following are the records maintained for inventory management Purchase Requisition NoteIndentGoods Receipt NoteJob Order (In/Out)Material Issue NoteMaterial Return NoteProduction ReportDelivery NoteRejection InwardRejection Outward
The accounting method that a company decides to use to determine the costs of inventory can directly impact the balance sheet, income statement and statement of cash flow. There are three inventory-costing methods that are widely used by both public…
1.1. Journaling The process of analysing the business transactions under the heads of debit and credit and recording them in the Journal is called Journalising. An entry made in the journal is called a ‘Journal Entry’. 1.2. Posting (to Ledger) The process…
1. Double Entry System There are numerous transactions in a business concern. Each transaction, when closely analysed, reveals two aspects. One aspect will be “receiving aspect” or “incoming aspect” or “expenses/loss aspect”. This is termed as the “Debit aspect”. The…
International Financial Reporting Standards, usually called IFRS, are accounting standards issued by the IFRS Foundation and the International Accounting Standards Board (IASB) to provide a common global language for business affairs so that company accounts are understandable and comparable across…