What is conversion cost?
Conversion cost is the sum of all such costs that are incurred in converting one article into intended output. Mostly, coversion costs represents the costs of all such activities or resources that have been applied in converting raw materials to finished items. In mathematical or equation form conversion costs are forumalated as follows: Conversion cost […]
What is prime cost?
Prime cost is a sum of all the direct costs i.e. prime cost is the aggregate of all such costs that can be traced back to products (cost units) or cost centers. Thus prime cost means sum of direct material costs, direct labour costs and direct expenses. Direct material costs include cost incurred on material […]
Why capital account is not debited to record drawings?
When owner of the business withdraw funds or goods from the business, we do not debit capital account instead we open record these withdrawals in another account which is usually named as Drawings account. So, we record such transactions without disturbing capital account in drawings account. Drawings account is also a capital account as this […]
What is nominal ledger?
First of all students must not confuse the accounts with ledgers. These are two totally different things. Even though these terms are loosely used for each other but they are certainly not the same. Ledgers can be regarded as big registers where we write up and update different accounts. So, it means accounts are specific […]
What is the difference between negative assurance and positive assurance?
Positive assurance is a positive assertion or in other words when opinion is stated in “positive form”. On the other hand, negative assurance is simply an opinion expressed in negative wordings. We call negative assurances negative because of the sentence structure. Sentences that contain NOT in them are called negative sentences or negation But such […]
Do we have transfer option from CAT to ACCA after passing CAT paper T1-T4 and T6?
Under new arrangements i.e. after the introduction and implementation of Foundations in Accountancy (FIA) suit of qualifications, things are not the same as they were used to be. In order to understand the new suit of qualifications in plain words please refer to What is FIA? This short article will explain many things about FIA […]
Will CAT transitional papers TT5 TT6 and TT7 will be held only in June?
If students select to go for the paper based exam i.e. T5 T6 or T7 then they can sit in these exams in June 2011, however, if students go for transitional papers i.e. TT5 TT6 and TT7 then basically he is sitting current F1 F3 and F2 respectively. So, under transitional arrangements you can sit […]
Is FIA equivalent to CAT in terms of value?
Since ACCA has launched the new suit of qualifications, much confusions are surrounding it. I must suggest that ACCA should write a whole student accountancy issue about it. Another problem is, ACCA has already issued FIA introductory document in addition to help available on ACCA website, but as the information is scattered, students are not […]
Can I use ACCA books for preparing CAT papers?
There is no harm in using different books to improvise your studies. But there is a reason why we have books named as “study texts” “study guides” “text books”. In CAT and ACCA qualification we use term study text to mean such books which are written by official publishers according the syllabus of a particular […]
What is the difference between “Selling costs” and “Cost of Sales”?
“Cost of sales” if said in a phrase then it basically is, manufacturing cost of units sold in a particular period or simply cost. On the other hand “selling costs” include such costs that are incurred to make things available for sale. Important thing to understand here is that even after incurring cost of sales, […]