Management Accounting
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
The double declining method of calculating depreciation is a kind of depreciation method in which the large amount of depreciation is calculated during the beginning years of the useful life of a certain fixed asset. The double declining balance method of depreciation is used
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
The investment of a c company in its inventory is probably the biggest one for the business. As we know inventory is a collection of valuable and expensive items that can be stolen or resold by anyone. If the inventory consists of raw materials
Financial Gearing can be defined as a financial figure that is actually a relative proportion of debt and equity that is used by the business for performing its operations. If the high ratio of debt to the equity id calculated a business is said
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
Ratio analysis is one of the best tools to build a picture of the financial position of a particular firm. Different entities such as credit analyst, stock analyst and lenders can used the ratio analysis as a tool to find out the financial position
It is a process that involves series of steps taken by the business to control the cost of the business by controlling operations and activities related to the cost. There are a number of steps involved in controlling the cost of the business that
As the name indicates a comparative balance sheet is a balance sheet that provides side by side information of a business’s assets, liabilities and shareholder equity multiply in the same time. For example a comparative balance sheet that is to be published at the
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
Indirect materials can be referred as materials that are used in the production and manufacturing process of a business but cannot be related directly to any product or some specific job within the business. They are not as worthy as to be counted in
Goods in transit can be defined as the merchandise and the goods or the inventory that have been dispatched from the shipping dock of the seller but yet not received at the shipping dock of the buyer. Both the seller and receiver must record
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
An income statement can be constructed in a number of different formats. The most simple and ready to make format is that of a single step income statement format. In the single step income statement a single and accumulated sub total of all the
The Present Value factor that is also known as PV factor is a numerical figure having a value less than one that is used to derive the present value of the cash receipt that is due on the future date. The cash receipts which
In accounting burden rate can be defined as the allocation rate at which the indirect costs are allocated to the direct cost of that of inventory and labor. Burden costs are added to both inventory and labor direct costs if a business wants to
The net realizable value is a valuation technique that is used to value inventory. With the help of this technique you tend to calculate the market value of the inventory items subtracting all the predictable costs associated with the inventory such as manufacturing and
