What is Accrual basis of accounting?
According to accrual concept or accrual principle or accrual basis of accounting revenues and expenses are recorded in books of accounts when they are earned or incurred and not when they are received or paid in cash. In essence events of business are captured in accounting system when they are actually happening and not when […]
What is Journal and how many types of journals are in accounting?
These are the first formal books in which information regarding transaction is recorded . For the same reason they are also named as books of prime entry or books of original entry or day books. While making a record certain format is followed that only summarizes the information but also keep the value of information […]
What is meant by Accounting concepts and principles?
Accounting is one of the vital tools to collect financial information pertaining to business activities. The same information is used in economic decisions users make. The apex of accounting or specifically financial accounting is financial statements that puts the gives the accounting records meaningful shape so that it can be used. However, preparing financial statements […]
What does favourable and unfavourable variance mean?
Variance analysis is a known quantitative technique that involves identification and evaluation of causes behind differences between actual costs/revenues and standard (or expected) revenues/costs. Variances are analysed in terms of being favourable or unfavourable for business and are monetized as a difference given a financial value it is more easier for the relevant authorities to […]
What is Variance analysis?
Any activity humans perform they do it for betterment and get the benefit in one or the other. In business environment basic motive is profit maximization and this is ensured in every decision they take. To aid their decision making process humans are using the technique of comparison since early ages. Comparison helps human decide […]
Differentiate between Goods Received Note (GRN) and Goods Despatch Note (GDN)?
In order to control the activities of the business and have operations running effectively management is responsible to have controls in place. Without controls accountantability will not be possible. One of the ways by which controls can be implemented is by using control documents (sometimes known as source documents as some are used to initiate […]
What is meant by Cost object?
Cost object is anything in relation to which user of cost information wants to measure cost. It can be a product or collection of products or even a unit of product. It can be an activity. It can be a cost center i.e. a department responsible to incur cost. It can even be an instance […]
What is the difference between Cash basis and Accrual basis accounting and which one is better?
Accrual basis of accounting is one of the underlying assumption for preparing financial statements under International Accounting Standards. IASB Framework clearly demanded the financial statements to be prepared on accrual basis instead of cash basis of accounting. Among other notable benefits of usig accrual basis of accounting over cash basis is that it helps record the […]
What is Cost accounting?
Cost accounting is a process of monetizing outflow of resources or loss of benefits in relation to certain aspect of the business for which user demands an information which is mostly used in decision making process. It is in the nature of humans to seek benefit in every activity they pursue. Due to the same […]
What is meant by Cost?
Cost is the monetary amount of resources or the consideration for using the resource invested or consumed or used up. In its most simplistic form cost is monetary measurement of resource outflow due to any reason. As cost is an information, user of information may require this information to be generated or processed as per […]
