Management Accounting
Accounting Concepts Learning objectives: Explain important accounting principles. The term concepts includes those basic assumptions or conditions upon which accounting is based. The following are the important accounting concepts: Business Entity Concept Going Concern Concept Money Measurement Concept Cost Concept Duel Aspect Concept Accounting
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.
Benchmarking Definition: Benchmarking is the study of organizations that are among the best in the world at performing a particular task. The idea is to study and analyze the reasons of the success of the most successful organizations in a particular field all over
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
Endorsement of Bill of Exchange: Learning Objectives: What are the journal entries in the books of drawer, acceptor and endorsee when a bill of exchange is endorsed by the drawer? When a bill of exchange is negotiated i.e., transferred from one person to another
Cash Budget Definition: A detailed plan showing how cash resources will be acquired and used over some specific time period. Click here to read full article about cash budget
Batch Level Activities Definition: Activities that are performed each time a batch of goods is handled or processed, regardless of how many units are in a batch. The amount of resource consumed depends on the number of batches run rather than on the number
Ending Finished Goods Inventory Budget Definition: A budget showing the dollar amount of cost expected to appear on the balance sheet for unsold units at the end of a period. Read full article about ending finished goods inventory budget.
Action Analysis Report Definition A report showing what costs have been assigned to a cost object, such as a product or customer, and how difficult it would be to adjust the cost if there is a change in activity.
Electronic Data Processing System (EDP System) for Materials Received and Issued: The preceding description of invoice approval and payment was for a manual operation performed by an accounts payable clerk or an invoice clerk. In an electronic data processing system (EDP system), the computer–to
Basis of Use System of Depreciation: Learning Objectives: Define and explain the basis of use system of depreciation. One of the chief factors causing depreciation is use. For example in the case of plant and machinery, it is the total number of hours for
Cash Budget | Cash Budgeting: Learning Objectives: Define and explain a cash budget. What is the purpose of a cash budget How to prepare a cash budget. Definition and Explanation: Cash budget is a detailed plan showing how cash resources will be acquired and
Decisional Roles Definition: The decisional roles involve around making choices. The four decisional roles include entrepreneur, disturbance handler, resource allocator and negotiator.
Cost Classification for Decision Making (Decision Making Costs): Learning objective of this article: Define, explain, and give examples of cost classifications used in making decisions: differential costs, opportunity costs, and sunk costs. Costs can be classified for decision making. Costs are important feature of
Capital and Revenue Receipts, Payments, Profits and Losses: Learning Objectives: Define and explain and give examples of capital and revenue receipts and payments? Define and explain and give examples of capital and revenue profits and losses? Contents: Capitalized and Revenue Receipts Capital and Revenue
Account Analysis Definition: Account analysis is a method for analyzing cost behaviour in which each account under consideration is classified as either variable or fixed based on the analyst’s prior knowledge of how the cost in the account behaves. Other Related Accounting Articles: Fixed