Cost Accounting
Cost accounting is a branch of accounting which deals with cost incurred at the time of production as well as the cost of depreciation of fixed assets. Cost accounting helps in decision making of the company. Cost accounting is also helpful in budgeting management of company.
First Line Managers Definition: Managers at the lowest level of the organization who manage the work of non-managerial employees who are directly involved with the production or creation of the organization’s products. Recommended Books ! Or Download E accounting book in MS-word format for
Finished Goods Definition: Units of product that have been completed but have not yet been sold to customers.
Financing Activities Definition: All transactions (other than payment of interest) involving borrowing from creditors or repaying creditors as well as transactions with the company’s owners (except stock dividends and stock splits). Relevant terms: Cash flow statement Operating activities Investing activities Cash equivalents
Financial Leverage Definition: Acquiring assets with funds that have been obtained from creditors or from preferred stockholders at a fixed rate of return.
Financial Accounting Definition: Financial accounting is the phase of accounting concerned with providing information to stockholders, creditors, and others outside the organization. Relevant Terms: Cost Accounting Managerial/Management Accounting
First in First Out-FIFO Method Definition: A method that operates under the assumption that the materials which are received first are issued first and, therefore, the flow of cost should be in the same order. Issues are priced at the same basis until the
Feedback Definition: Accounting and other reports that help managers monitor performance and focus on problems and/or opportunities that might otherwise go unnoticed.
External Failure Cost Definition: Costs that are incurred when a product or service that is defective is delivered to a customer.
External Environment Definition: Outside institutions or forces that potentially affect an organization’s performance.
Equivalent Units of Production: Definition and Explanation of Equivalent Units of Production: After materials, labor and overhead costs have been accumulated in a department, the department’s output must be determined so that unit cost can be computed. A department usually has some partially completed
Equivalent Units of Production Definition: The product of the number of partially completed units and their percentage of completion with respect to a particular cost. Equivalent units are the number of complete whole units one could obtain from the materials and effort contained in
Environmental Uncertainty Definition: The degree of change and degree of complexity in an organization’s environment.
Absorption Costing Definition: Cash equivalents are short-term, highly liquid investments such as treasury bills, commercial paper, and money market funds that are made solely for the purpose of generating a return on funds that are temporarily idle.
Environmental Complexity Definition: The number of components in an organization’s environment and the extent of the organization’s knowledge about those components.
Cash Discount Definition: It is an allowance or deduction allowance by a creditors to a debtor. In other words, cash discount is an allowance made by the supplier or creditor when the purchaser pays his account at once or within the period of credit
Entrepreneurship Definition: The process whereby an individual or group of individuals uses organized efforts to pursue opportunities to create value and grow by fulfilling wants and needs through innovation and uniqueness, no matter what resources the entrepreneur currently has.
Engineering Approach Definition: A detailed analysis of cost behavior based on an industrial engineer’s evaluation of the inputs that are required to carry out a particular activity and of the prices of those inputs.
Cost Accounting Procedure for Defective Work: In the manufacturing processes, imperfections may arise because of faults in materials, labor, or machines. If the unit can be reprocessed on one or more stages and made into a standard saleable product, it is often profitable to