Accounting Definitions
Accounting definitions are defined by different authors in different ways. Accounting definitions are easy to understand and in easy language. Accounting definitions provides proper guideline & process in the preparation of different accounts of any thing.
There are a number of accounting issues that are involved in a manufacturing businesses that are absolutely absent from the accounting procedures of the other companies. The accounting procedures involved in a manufacturing business can be explained as under:- Inventory Valuation Inventory valuation means
High-Low Method is used in cost accounting to discern or differentiate the fixed and the variable costs portions from the total cost figure. The high low method is usually used for the mixed costs. A mixed cost is the type of cost that includes
Capitalization limit can be defined as the dollar amount that a business paid for an asset. The asset for which capital is paid by the business is recorded as the long term asset. However if the business pays less than the capitalization limit of
A capital lease is a kind of lease in which the lessee records the assets to be leased in the same way as it owns the assets that are going to be leased. In this concept the lessor is going to be tagged as
Conservatism principle is an accounting principle that helps accountants in verifying the coming expenses, losses, profits and revenues. According to this principle accountants must use an approach where they must recognize their expenses and liabilities as soon as possible but record revenues and profits
The full time equivalent is referred to the hours worked by a certain employee within a business on full time biases. There is a general calculation of full time equivalent that is approximately equals to 2,080 hours per year. The calculation for full time
A discount allowed is an accounting term where the seller grants a discount in payment to the seller. This kind of discount can be the early payment discount that is granted by the seller to the buyer on credit sales. There may be other
Other comprehensive income is those expenses, revenues, profits and losses that are excluded from the net income of the business on the income statement of that accounting period. The concept of other comprehensive income is accepted by GAAP and international financial reporting standards of
According to the accounting terminology income summary account is a transitional account in which all the expenses and revenue accounts of the income statement are transferred at the end of the accounting period. The net amount of expense or revenue that is shifted to
Final Accounts is a term that is used in the basic bookkeeping procedures and is referred to the final trail balance of the accounts at the end of a certain accounting period. This is the final trail balance that is used to design and
In accounting the term work in process means the goods that are under the process of completion but are not completed yet. The work in process goods are somewhere in between the raw materials and finished goods of the inventory. In terms of classification
Stake Holder value is an accounting concept that is based on the idea of creating maximum returns for all the stake holders involved in a business. The concept of stake holder value is different than that of share holder value where all the efforts
In accounting wealth maximization can be defined as a concept of maximizing the value of business. With the help of wealth maximization a business can increase the value of shares of the business that are held by the share holders. The concept of wealth
A number of times such a situation arises in the business where the business has to receive a schedule payment from a client in foreign currency and in the same way a business sometimes has to pay its supplier also in foreign currency. Whenever
Depreciation can be defined as a reduction in the recorded cost of a fixed asset. There are a number of fixed assets that are routinely depreciated every year such as buildings, furniture, office equipments and other physical things. The land is the only fixed
Financial Analysis is a process of analyzing, comparing and comprehending the financial information of the business to take important financial decisions. There are a number of situations in which we implement financial analysis process within a business. One of the key situations is that
Sales Mix is a mixture of different products and the services of a company that make a complete sale of that company. In most of the cases the sales of a company are the mixture of different products and services where each product or
The dollar value of LIFO method is an inventory method that is a minor variation of the Last In and First Out method of inventory costing. With the help of this method a business can aggregate the cost of large bundle of inventories. In