INTRODUCTION
Accounting is the process of recording, classifying, selecting, measuring, interpreting and communicating financial data of an organization to enable interested users make decisions.
Accounting as the process of recording, identifying, analyzing, classifying, summarizing, measuring and communicating economic information to allow informed decisions by the users of the informatio...
How To Prepare Income Statement Using Principles of Marginal And Absorption Costing
MARGINAL COSTING
The marginal cost of an item is its variable cost. The marginal
production cost of an item is the addition of its direct materials cost,
direct labour cost, direct expenses cost and variable
production overhead cost. The higher the volume of production, the higher will be the total variable cost of sales.
Contrarily, fixed costs are costs that remain unchanged in the short run, regardless of the quantity of production and ...
History of Accounting
There is no very correct record as to when accounts started. However, but information that is available suggests that record keeping is as old as man. We can link its starting point to the merchants in the Babylonia and Assyrian civilizations, about 4000 years B....
Depreciation of Fixed Assets
INTRODUCTION
Fixed assets are assets which are of permanent nature and they create revenue for the business. They can last for a long period of time. Fixed assets of a business lose value or are said to depreciate with usage. Depreciation can be defined as a reduction in the economic service potentials of an asset as a result of wears, tears, usage and passage of time. It can also be defined as the permanent and continuous decrease in the quality,quantity...
The Principal Book: LEDGER
The ledger is the final destination of all transactions in the subsidiary books. It is the most important book of account. It can be defined as a book which contains a permanent record of all transactions in classified and summarized form. The ledger is used for the double entry book keepin...
Accounting For Non-Profit Making Organization
Commercial and Industrial organizations are set up principally to make profit, but non-profit making organizations like societies, clubs and charitable bodies are not profit oriented, but to provide services to their members. In place of trading, profit and loss account found in the trading concerns, such associations prepare the following accounts to show the financial affairs to their member...
Money and Capital Markets
The money market is a component of the financial market for assets being used for short-term borrowing of funds by government and corporate entities. This means that the money market is used for buying and selling of financial instruments with original maturities with a period of one yea...
How To Prepare Bank Reconciliation Statement
INTRODUCTION
An organization will record money paid into the bank and the sums drawn from the bank with cheques in the cash book. Then again, the bank will record all the transactions in its own book. The book prepared by the bank showing the transactions between it and the customer is called "Bank Statement...
The Final Accounts Of A Sole Trader
The trading account is prepared to show the gross profit or gross loss for the accounting period. It is prepared to conform to the rules of double entry. Since it contains the result of operation of a company or a business over a perio...
Some Financial Ratios In Accounting You Need To Know
Financial Ratios
Financial Ratios
According to businessdictionary.com,
financial ratio is a financial analysis comparison in which certain financial
statement items are divided by one another to reveal their logical
interrelationships. Some financial ratios are called primary because they
indicate the fundamental causes underlying a company`s strengths and
weakness...
Correction Of Errors in Accounting
Errors can be defined simply as mistakes made in the preparation of accounts. Errors can be categorized into two, namely:
Errors that will affect the totals of the trial balance.
Errors that do not affect the totals of the trial balance.
For the purpose of simplicity, we shall treat the two categories differentl...
Ethics of Accounting
Ethics means morality. It deals with human conduct in relation to what is morally good and bad, right and wrong. It is applicable to values for decision making. These values include fairness, honesty, respect, responsibility, integrity and compassion.
Accounting ethics in the field of accounting means the guidelines that a professional needs to follow while practicing accounting. Or it is the distinct guidelines for a business or company...
Public Sector Accounting
Public sector accounting is the process of recording,summarizing, analyzing and interpreting the financial transactions of the government. Government accounting shows the receipts and payments of public funds in all levels of governmen...
Business: Its definition, importance, significance and classifications
Wikipedia defines business that "A business, also known as an enterprise, agency or a firm, is an entity involved in the provision of goods and/or services to consumers". It is an organized and systematized activity for profit. It deals with activities of people chasing a common goa...
Deparmental Account
In some organizations where operations are divided into separate departments, the trading result of each department must be ascertained. The criteria for identifying
the departments in an examination
question is always
the separate sales/work-done
revenu...
Accounting Concepts and Conventions
Accounting concepts and conventions
The following concepts and conventions are the principles guiding the preparation of accounting statements. If any of them is disregarded, it might affect the entire nature financial accounti...
Job and Batch costing
Job costing
According to CIMA, job costing is a form of specific order costing which applies where work is undertaken to customers` special requirements and each other is of comparatively short duration. The work is usually carried out under a roof or in a factory and moved through many processes and operations as...
Business Organization
INTRODUCTION
A business, also referred to as company, can be defined as a legal person or entity created
by the association of a number of people in accordance with the law for the
purpose of pooling their capital together in order to set up a business venture. It is a legal entity wi...
Money And Banking
(1) Money
Money can be defined as any commodity that is generally acceptable as a medium of exchange
and measure of value. It enables one to trade what he has for what he
wants. That is the conventional definition of money and it emphasizes
the basic functions of money are medium of exchange and measure of
value. However, money is highly important so as to maintain maintain good health.
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