Tag: Accounting

What is Modern Management Accounting? Discuss
Modern Management Accounting; Over the last two decades, managerial accounting has developed as a practical tool for executives and as a topic for academic education and research; Thus, managerial accounting states that “It is the process of identifying, measuring and communicating economic information that enables informed judgments and decisions of information users”. Managerial accounting plays a very important role; where it gives the manager enough time and relevant information and sets goals, monitors performance; and systematically improves the efficiency and effectiveness of the organization in achieving goals. . within the organization.

Here are the articles to explain, Modern Management Accounting Discuss, Definition, Role, techniques, and TQM!

To bring our history of management accounting closer to date, developments since 1975 have identified an information and reporting system that affects individuals. Although managerial accounting developed in the fourteenth century, with the principles of financial accounting and bookkeeping, business accounting and small business owners did not practice it before the Industrial Revolution. In the nineteenth century, new accounting methods developed when entrepreneurs began hiring people on a long-term basis, investing capital, and introducing more complex technologies.

Definition of Modern Management Accounting;

“Critically discuss the role of modern management accounting and the extent to which it shapes, or is shaped by, the changing organizational and global context within which it is practiced”.

“Concerning relevant literature, critically evaluate the effectiveness of Three recent developments in management accounting techniques, within specific organizational or national contexts of your choice (e.g. Manufacturing or Service Sectors, Advanced or Emerging Economies)”.

Concerning the relevant literature, there have been few recent developments in management accounting techniques within the manufacturing and service sectors. The practice of modern management accounting is different from traditional accounting. The recent developments enable managers to make sound decisions to minimize cost; as well as at the same time add value to the products and services by improving the quality of products; which is required by the customers and reducing waste.

However, the pendulum swung in the other direction over the next decade as an effect of new “Techniques” in the management accounting area. Activity-based costing (ABC), Just-in-time (JIT), and Total-quality-management (TQM) have been developed to update the traditional accounting model so it adequately reflects today’s manufacturing environment.

Role of management accounting;

The relation between accounting and management has been commonly expressed by the phrase, “Accounting is a tool of management”. Accounting practice has developed in response to a changing business economy. Because of these changes, effects have been made to clarify, redefine, and seek acceptance of accounting doctrine and practice.

Management accounting systems (MAS) are recognized as providing a most important source of journal information in organizations, a source of power deriving from the possession of that information, and a means for distributing that power and managing the organizational system.

The direct impact of organizational changes on the different roles of management accounting is difficult to measure. The changing role of management accounting becomes evident through the substantiation of management accounting. Pointed out that the role of management accounting consists of;

Direct attention:

This means providing full information to specific situations e.g. Where the problem occurs, and who creates a loss. In the highly competitive market, this role alerts the manager about competitors’ information such as their strategy, and new products.

Keeping the score:

This role aims to answer the questions: how much and how many. (How much implies those things is related to allocation and the share of costs within the whole organization, and how many refers to the number of inputs that will be used). In strategic management, the answer to those questions may be extended; such as how much the market share, is and how many compared to the competitors.

Solving the problems:

Management accounting is a good channel for managers to provide the nearest relevant methods for solving the subsisting problems. Due to M/A, the manager can collect all detailed information about the problems such as what causes them, and when it starts and then based on that information, several answers will be provided and the task of a manager is to choose the most appropriate one.

Comparison of Traditional and Modern management accounting;

During the 1950s and 1960s, accountants gradually discovered that product costs; which had been constructed for financial reporting purposes, were being taken seriously by operating executives. In the late 1960s and early 1970s, management accounting thought developed that attempted to subsume the two previous approaches into a broader conceptual framework.

Historical and contemporary studies of accounting have shed light on the diverse ways in which accounting has been and is been implicated in a wide range of activities and social arrangements. Accounting cannot be understood simply concerning its supposed functional properties because it stands implicated in shaping its context.

This said much of the evidence to date suggests that, in practice, traditional management accounting techniques remain popular. However, it appears also that such traditional techniques stand used alongside new and ‘advanced’ accounting techniques, such as ABC, JIT, and TQM.

Management accounting stands used to help managers make solid business decisions. Because of the revolution in management accounting, both the smallest corner stores and largest multinational organizations start their innovation in their accounting perspective.

Successful organizations adapt to changes in their environment and proactively change their environment. Management accounting should help organizations recognize the need for initiating change and suggest the appropriate response to an environmental change.

Change in Global/ Organisational context and management accounting;

Since 1975 important changes have taken place in the context of political, economic, and social settings. Management accounting faces a few challenges over environmental changes as well as an internal process within organizations. Therefore, management accounting must respond to these changes by adopting new techniques and concepts.

The measurement of costs:

By using modern management techniques, the value and profitability of information services can generate.

The birth of “hybrid” accountants:

As a result of new forms of organizations and requirements of strategic management accounting (SMA). SMA links performance measurement systems with corporate vision and strategies.

Open-book accounting:

These techniques are an important part of outcome control measurement for companies in inter-organizational relationships; which are another result of increased globalization.

In discussing the nature of settled habits of thought and action Hodgson, defined habits as more or less self-actualizing dispositions or tendencies to engage in previously adopted or acquired forms of action.

A strategy of change provides a critical appraisal of current ideas about “organizational culture“, “total quality management“, “flexibility”, and “excellence”. Dealing is an integrated way with the full spectrum of survival in today’s changing environment.

Characteristics of manufacturing and service sectors;

Much of the literature on international business has taken on a manufacturing perspective. The recent literature has paid attention to the internationalization of service firms.

Characteristics of service production.
- Intangible output.
- Customized output.
- Labour intensive.
Manufacturing Orientations in Service firms.
- Physical goods as a component of a service package.
- Manufacturing logic in back-office service operations.
- Deprofessionalization of service production and delivery.
Service Orientations in Manufacturing Firms.
- Component of the product.
- Element of product strategy.
Characteristics of manufacturing production.
- Tangible output.
- Standardized output.
- Technical care buffered from the customer.
The conflict between manufacturing and service sectors.

The center box exhibits orientations among manufacturing and service sectors. Also, The right box exhibits the features of the manufacturing firms and the left box exhibits the features of the service firms. Manufacturing firms, particularly those with diversified product lines, have a good deal more flexibility and control than extractive investors; they may be able to exercise considerable choice in their response to host country demands.

The continued growth of service sectors in almost all the developing economies has fascinated and occasionally alarmed economists and other observers. Why is the problem more serious in some of the service sectors? Partly it is a data problem, importantly, it is a conceptual one. Both manufacturing and service company managers need operational control systems that will enhance the cost-improvement, quality-improvement, and process-time reduction activities of their employees.

Management accounting techniques:

The following Three techniques below are:

Activity-Based Costing (ABC);

“Activity-based costing is a method that is projected to provide managers on cost information for strategic and other conclusions that potentially affect the capacity and therefore fixed costs”.

Benefits related to activity-based costing (ABC) are many. In ABC, the aim is to understand the overhead and profitability of the products and customers. ABC works mainly in the large cost drivers related to a decision to be sure of or a process being studied.

In developing countries, the manufacturing industries started adopting new techniques, to maintain the relationship between market development and technological innovation to archive long-term success. Seemingly, ABC developed as an accounting technique to provide applicable information for advanced manufacturing firms producing various products in a competitive environment.

Whilst the thoughtfulness, ABC as yet focused on manufacturing firms, ABC can be useful to a few service organizations. There are few very disputes among the manufacturing and service sectors. Manufacturing firms execute similar types of activities; however, there is a slight similarity between the activities of an insurance firm, a hospital, and law firms. The service sector is less tangible and, harder to define.

In developed countries like the UK, when the survey of ABC took place for nearly 1000 companies, the result indicated that even after adopting ABC; it has stood rejected by a healthy number, and the majority of the companies have to still decide on its use.

As cost driver and ABC concepts improve the measurement of costs and allocation of information for service departments within manufacturing firms, service firms such as accounting/law firms could also use cost driver and ABC concepts.

Just-In-Time (JIT):

“JIT is a process which is capable of instant response to demand without the need for any overstocking, either in exception of the demand being forthcoming or as a result of inefficiencies in the process”.

Under certain circumstances of the JIT concept, a company maneuvering a JIT system would buy only enough raw materials each day to meet that day’s need. JIT manufacturing scheme calls for making a good or service only when the customer, internal or external needs it. JIT manufacturing is simple in theory, however, one had to practice. ”Keeping everyone busy”, is another characteristic of conventional manufacturing.

JIT has many advantages, for eg,

“An American standard uses cell manufacturing to cut inventories and reduce manufacturing time. The result is a breakthrough in speed. Manufacturing a pump now takes six minutes than two weeks”.

JIT production process and the manufacturing effectiveness ratio for manufacturing operations apply to service companies too. The service delivery process is even more important than in manufacturing companies. Eg. In the banking industry, the process of gaining approval for a mortgage on a house that we like to purchase needed 26 days, and after applying the JIT process they just need 15 min.

Total Quality Management (TQM):

“TQM is the most popular approach to a continuous improvement. Its major characteristics are to focus on serving customers and the systematic problem-solving team made up of front-line workers”.

A few thousand companies have existed involved in TQM and similar programs. For a business, the major driving force is the element of competition. The competitiveness of suppliers stands determined by the quality of its product or services. Most manufacturing companies adopt TQM, either to improve the work atmosphere for the employees or to help improve the profits of a company. “Penril Datacomm is a Maryland designer and producer of data communications equipment. Before TQM the defect rate of the company was high.

Applying TQM techniques resulted in an 81% decrease in defects, an 83% decrease in failures, and a 73% decrease in first-year warranty repairs”. The concept and tools of service began with Thomas Peters and Robert Waterman’s “In Search of Excellence”, to achieve customer satisfaction, service companies such as Disney Corporation and SAS Airlines adopted TQM. TQM in education as a business is difficult.

What is Modern Management Accounting? Discuss; Image by Megan Rexazin from Pixabay.
June 11, 2022
Standard Cost and Estimated Cost Difference

Difference between Standard Cost and Estimated Cost; Standard costs stand used as a criterion for evaluating cost savings. Because the purpose of setting standards is to ensure that costs do not exceed certain limits. The actual one stands compared with the standards and the necessary measures stand taken based on the differences. On the other hand, the control aspect stands not included in the estimated costs. Because in the case of Estimated Expenditures, no further action stands taken. And in most cases, the estimated costs stand used to prepare and submit bids and set costs.

Here are the articles to explain, The distinction and difference between Standard Cost and Estimated Cost!

Standard costs exist usually determined based on scientific and technical analysis. However, estimated costs exist determined only based on past cost data and expected future changes. In this way, the estimated costs differ from the standard costing, and the differences between them exist mainly based on how the costs exist determined in advance.

What is the standard cost?

Standard cost is a planned or budgeted cost. The standard price stands based on engineering designs and production methods that can obtain under normal commercial conditions. It consists of materials, labor, and overhead parts and is normally part of the BOM.

What is the estimated cost?

Estimated costs are projections of the number of costs that will incur in producing a product or building a building. This amount obtains as part of the capital budgeting process for the internal project or as part of the sales offer if you are trying to sell to a client. The party paying the estimated costs may exist held at the level of the projection under the terms of the fixed price contract.

The distinction and difference between Standard Cost Vs Estimated Cost;

Although both estimated costs and standard costs stand computed in advance of production, and are, therefore, predetermined costs, estimated costs differ from standard costs in the following respects;

Objective Difference:

Estimated costs exist intended to ascertain what the costs will be while standard costs aim at what costs should be.

Calculation Difference:

Estimated costs stand calculated based on past performance standing adjusted in the light of anticipated changes in the future. Standard costs, on the other hand, stand ascertained on a scientific basis keeping in view certain conditions of efficiency.

Computation Difference:

Estimated costs stand for predetermined costs based on past performance and adjusted for anticipated future changes. They stand thus established in advance as the best estimates subject to the assumption that costs are free to move as they like. Standard costs, on the other hand, represent a carefully formulated advance estimate of what future costs should be under conditions expected to prevail. They are based on technical and engineering estimates. As such, they stand for planned costs expected to achieve in a particular production process under normal conditions.

Aid to Management Difference:

Estimated costs are not helpful to management in accomplishing management functions as they stand not scientifically predetermined costs. But standard costs involve operational analysis and evaluation and a comprehensive review of internal and external factors. They become reliable yardsticks for product costing, product pricing, planning, coordination, and price control purposes.

Emphasis Difference:

Estimated costs emphasize the cost with which it stands compared at the end of the accounting period. If the estimated costs stand found higher or lower than actual costs, they stand revised for use in the next accounting year. In standard costing the emphasis stands to put on standard costs, i.e., what costs of material labor and overhead should incur if the factory is to operate as a highly efficient unit.

Under standard costing, actual costs stand ascertained only to facilitate their comparison with standard costs. Historical costs emphasize what the ‘costs are’ while estimated costs emphasize what the ‘cost will be’. Standard costs, on the other hand, emphasize what the ‘costs should be’.

Use Difference:

The estimated costs stand used only as statistical data, whereas standard costs exist used as a regular system from which variances stand ascertained and the reasons for such variances exist analyzed, and corrected measures stand taken promptly. In an estimated costing system, the emphasis is on cost ascertainment for fixing selling prices.

As such, estimated costs are not of much practical significance from the point of view of cost control. Standard costing, on the other hand, being precise, provides a scientific basis with which actual costs stand compared. Accordingly, standard costs serve as an effective tool for cost control.

Accuracy Difference:

Being based on the average of past costs adjusted for anticipated changes in the future, estimated costs are less likely to be precise. However, standard costs stand fixed only after scientific analysis of relevant factors having a bearing upon costs. As such, standard costs tend to be more precise and accurate than estimated costs.

Accuracy and Reliability Difference:

Standard costing is a scientific method of cost control and it is more reliable and accurate, whereas estimated costs are not so precise and reliable.

Records Difference:

Estimated costs are statistical. As such, they are not a part of the accounting system. They stand only posted in the cost sheet for comparison. They stand used as statistical data for future costs. But, standard costs are a part of the accounting system. They have a place in the accounting records and stand used for ascertaining variances from the actual costs.

Revision Difference:

The estimated cost stands adjusted to the actual cost and expected changes in the coming period. While Standard Cost exists not generally revised unless it has existed set incorrectly or it has become irrelevant to the changed situations. Thus, Standard Cost is free from frequent changes or modifications.

Stability Difference:

Standard costs are more stable than estimated costs because estimated costs stand set on the assumptions of free movement of cost.

Barometer of Efficiency Difference:

Estimated Cost—being only an expression of likely cost in the future—cannot use to measure efficiency or otherwise. But the standard cost stands used as a barometer of efficiency since it compares with the actual cost.

Applicability Difference:

Estimated costs are generally applicable to concerns engaged in construction work such as buildings, factories, bridges, ships, and other types of concerns such as bakeries, bottling companies, medicines, and dairy products. Although the principles underlying standard costing can apply to any industry, standard costs are most suitable for industries engaged in mass production.

The distinction and difference between Standard Cost and Estimated Cost

June 10, 2022
Standard Costing Accounting PDF Essay
Standard Costing Accounting Essay with PDF; They stand a specialized expenditure technique in which standard costs stand predetermined, actual costs stand compared with these predetermined costs; and, the differences between the two stand monitored and analyzed according to their factors; to take corrective action to control the factors that lead to adverse differences. The standard calculation system, therefore, includes various steps – from setting standards to the definitive application of cost control.

Here are the articles to explain, What is Standard Costing Accounting? Its Definition, Advantages, and Disadvantages!

It refers to the determination or pre-quantification of the cost of a product, process, or operation under standard business conditions. It serves as an effective tool in the hands of management for planning, coordinating, and controlling various business activities. The business is undergoing a continuous process of growth; which stands carried out using the standard cost technique; because the standard costs stand set realistically, achievable, and change from time to time according to needs and requirements.

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Definition of Standard Costing;

According to the Chartered Institute of Management Accountants, London, Standard Costing accounting is “the preparation and use of standard costs, their comparison with actual costs and the analysis of variances to their causes and points of incidence”. The definition given by W.W Bigg makes the concept of standard costing more clear. According to him, “Standard Costing discloses the costs of deviations from the standard and classifies these as to their causes, so that management is immediately informed of the sphere of operations in which remedial action is necessary.”

According to J. Batty,

“Standard costing is a system of cost accounting which is designed to show in detail how much each product should cost to produce and sell when a business is operating at a stated level of efficiency and for a given volume of output”.

Advantages of Standard Costing;

Standard costing accounting technique as a management tool is an aid in making predictions and providing Standards for measuring business performance. It helps the management in the following ways:

Formulation of Pricing and Production Policies;

Standard Costing helps the management to formulate pricing and production policies based on estimated costs to incur. Estimated production and its cost provide the base for pricing policy and profit planning.

Facilitates Delegation of Authority;

With standard costing, the Delegation of Authority can stand successfully implemented as top managers can delegate responsibility according to the standards fixed.

Facilitation of Principle of Management by Exception;

The standard Cost System works based on the principle of management by exception. Management needs to give concentration only on those areas where deviations occur, i.e., Actual performance is more or less than standards.

The yardstick for Comparison;

Standard Costing gives a suitable base for comparison of actual performance with predetermined standards. Standards can stand fixed for any element of cost e.g., material, labor, overheads, etc.

Optimum Use of Resources;

Standard Cost also helps in optimum use of resources. Different resources like raw material, plant and machinery, and current assets stand used according to the standards fixed in advance.

Uniform Valuation of Stock;

Under Standard Cost System, the valuation of the stock stands done at standard cost. The variance account stands open for transferring the deviations between standards and actual performance. This brings uniformity to the valuation of the stock.

Facilitate Coordination;

When standards stand fixed, the performance of various departments e.g., production, sales, purchase, etc., consider. In this way, standard costing enables coordination among all departments.

Effective Cost Control;

Standard Costing is an effective tool in controlling cost because actual performance stands compared with standards and in case of deviations, corrective action stands taken.

Economy;

In standard costing, standards stand fixed in advance. Once standards stand fixed development of cost, most of the clerical work reduce. Thus it is an economical method of costing and brings efficiency to production.

Motivates Employees;

When standards exist fixed Incentive schemes to motivate employees can introduce. Employees try to achieve the standards and they remain different monetary and non-monetary incentives.

Disadvantages or limitations of Standard Costing;

Some of the basic limitations of Standard costing accounting stand discussed below:

Difficulty in Fixing Standards;

Standards are difficult to set. If inaccurate standards stand set, they can do more harm than good to the business. Tight standards act as a disincentive to work and loose ones don’t provide any incentive at all. If due care stands taken and caution stands exercised based on scientific studies, correct standards may stand set. It is not that difficult. However, expert knowledge and skill stand required for fixing standards.

Estimation of Price Difficult;

Precise estimation of likely prices of material or rates of labor poses a problem. However, the use of sophisticated forecasting techniques can assist to a great extent.

Apprehension of Output Change;

Its actual output varies, and standard costs can’t realize. Again scientific techniques and market research largely solve the problem.

Out-Dated Standards;

Standards may become out of date very soon. Keeping standard costs up-to-date can be a major problem. It may not always be possible to change standards to keep pace with the frequent changes in manufacturing conditions. For solving this problem, an optimum period for keeping standards without revision should select. It would inspire confidence in the permanence of the measures and also avoid administrative inconvenience caused by continuous modification.

Not Suitable for Small Concerns;

In small concerns, production cannot stand properly scheduled since frequent changes in production conditions take place. Therefore, standard costing may not be suitable for them. Detailed analysis may be meaningless and superfluous for them. If an efficient system of production planning stands established, the difficulty can be overcome and even small concerns can adopt a standard costing system; though the advantages gained by them may not be that much as availed of by large concerns.

Costly for Non-Standard Product Industries;

Standard costing may be found unsuitable and costly in the case of industries dealing with non-standard products and repair jobs that keep on changing to customers’ specifications. If some of the operations applied to different products are common and repetitive, standards may be fixed for such components or operations with advantages. The cost-benefit analysis should however be made before installing a standard costing system. If the costs exceed benefits, no system can be recommended for adoption, not to talk of a standard costing accounting system.

Explanation of Variances Difficult;

Due to the play of random factors variances cannot sometimes stand properly explained and at times it is difficult to make a distinction between controllable and non-controllable variances. A toning up of the variance analysis system can obviate this difficulty.

Lack of Management’s Enthusiasm;

If the management is reluctant to implementation of the system effectively, the success of the system will be in peril. By educating management about the likely advantages of the system, management can stand made interested in effectively implementing the system.

Administrative Inconvenience;

Carefully planned and operated procedures, as required under this system in respect of the recording of prices, time, quantities, etc. might not have stood adopted. However, any effective planning and control system must have a foundation on which to operate.

Resistance from Within;

The staff may take it as a threat to their freedom of action, feeling that they stand being directed down to the last detail on how work should perform. It also requires proper education of the personnel of the organization.

Badly Designed System;

If the standard costing accounting system has not been properly designed, many problems are likely to crop up. Supposing is a concern, material costs are of vital importance whereas undue emphasis has been laid down on labor costs, the system would not bring desired results. The existing problems must be taken due care of while introducing the system. The rigid marshaling of effort within a factory is a fact of like which must be accepted. Without attention to detail, there would be great difficulty in achieving a high level of efficiency.

How do standard costs stand set?

Standards should stand set for the quantities and prices of materials, labor, and services to stand consumed in performing each operation associated with a product. Product standard costs exist derived by listing and adding the standard costs of operations required to produce a particular product.

Two approaches stand used for setting standard costs.

First, past historical records can stand used to estimate labor and material usage. Secondly, standards can stand set based on engineering studies. With engineering studies a detailed study of each operation stands undertaken under controlled conditions, based on high levels of efficiency, to ascertain the quantities of labor and materials required. Target prices stand then applied based on efficient purchasing to ascertain the standard costs.

How does a standard costing system operate?

Standard costing is most suited to an organization whose activities consist of a series of repetitive operations and the input required to produce each unit of output can be specified. A standard costing accounting system involves the following:
- The standard costs for the actual output stand record for each operation for each responsibility center.
- Actual costs for each operation stand traced to each responsibility center.
- Also, The standard and actual costs stand compared.
- Variances exist investigated and corrective action stands taken where appropriate
- Standards stand monitored and adjusted to reflect changes in standard usage and/or prices.
What is the main purpose of variance analysis?

There are very few plans that turn out exactly as planned. Even when the overall objectives of the plan exist achieved, some, if not all components of the performance will have varied from the sub-plans or standards that make up the overall picture. For example, a football team may win an important game, as planned, but within the team performance; there may be many aspects that the manager will analyze during and after the match so that performance can stand improved for next time.

As in business, good points need to encourage, and less positive aspects need to exist discussed and corrected. In a game of football, a side may have won a high number of corner kicks, but conceded too many free-kicks in defending. There is little to stand gained for the next match if we do not think about the last performance in detail. Variance analysis provides a framework for business managers to break down the overall performance of an organization so that each element of the business can stand isolated and analyzed in turn.

What are the causes of labor, material, overhead, and sales margin variances?

Quantities cost variances arise because the actual quantity of resources consumed exceeds actual usage or vice versa. Examples include excess usage of materials and labor arising from the usage of interior materials, careless handling of materials, and failure to maintain machinery in proper condition. Price variances arise when the actual prices paid for resources exceed the standard prices or else. Examples include the failure of the purchasing function to seek the most efficient sources of supply or the use of a different grade of labor to that incorporate into the standard costs. How to calculate material, labor, variable overhead, fixed overhead, and sales variances.

Standard Costing Accounting PDF Essay; Image by Mohamed Hassan from Pixabay.
June 9, 2022
Financial and Managerial Accounting Differences Similarities

Financial and Managerial Accounting are two out of the four largest accounting areas. Financial accounting is the process a company goes through to prepare its financial statements to excuse its financial turn to the people in the aerate of an invested union such as stockholders, suppliers, creditors, and investors. Managerial accounting is the process a company works through to make its financial reports suitably so that internal stakeholders in imitation of managers can make financial and functional decisions for the company. While there are some similarities together with the two types of accounting, the differences are shown in contracts, benchmarks, and audience.

Here are the articles to explain, Similarities and Differences between Financial and Managerial Accounting!

Managerial and financial accounting have several parallels. Both types fabricate financial reports, are centered as regards finances, are meant for a specific audience, and require a big knowledge of accounting practices. They both use an accounting system that accumulates and classifies the financial hint for the formation of the accounting statements. Revenues, expenses, assets, liabilities, and cash flow are single ones tracked by both managerial and financial accountants. Both accounting systems stand used to determine and sham costs for alternating accounting periods.

Similarities and Differences Part 01;

Financial and managerial accounting have a few similarities but the differences are many. One main difference is the audience. Managerial or cost accounting reports are prepared for internal stakeholders. Employees within the company such as managers and directors use the reports to make decisions for the company. They can use it to determine how much maintenance they can spend and go about for what. Should they invest in choice equipment or employ more employees? Do they depend to sell some trucks in their fleet or obsession to agree to some employees to go? All of this spread helps the managers realize the company’s goals.

Financial accountants must follow the Generally Accepted Accounting Principles (GAAP) previously preparing their reports. Financial accounting reports stand meant for owners, lenders, investors, and stockholders. The financial accounting reports agree to the outside stakeholders to determine how adroitly or how bad the company may ham it taking place in the make remote away along. The reports should as well as come in the works taking into account the child maintenance for potential investors and creditors to ample permit knowledge to make financial decisions just about the company.

Similarities and Differences Part 02;

Another difference in financial and managerial accounting is the regulations each adheres to. As avowed above, financial accounting must follow GAAP. This is a set of accounting guidelines that require consistent financial reporting and recording. The financial accounting reports are a summary of how the company is the theater arts overall. Managerial accounting exists not required to follow GAAP. GAAP can take doings closely managerial accounting reports. GAAP requires that expenses following rent and utilities stand included in overhead costs. However, from a managerial standpoint, they may be keener on administrative costs to pro happening to create internal decisions.

The reports each type of accounting produces and uses are alternating as dexterously. Managerial accounting relies on budget reports. Budgeting helps managers take into consideration overspending. Budget reports consent managers following a lead to bitter costs, negotiating considering vendors, and possibly offering incentives. Managers as well as user account receivable reports, material, and labor cost reports, and accomplish reports to create enlarged decisions on speaking company operations and spending.

Similarities and Differences Part 03;

Financial accountants put together four types of financial statements for uncovered stakeholders. The description sheet archives the company’s assets, liabilities, and equity. It details the revenue and expenses for an unmodified time. The pension avowal archives a company’s profits and losses from both working and non-energetic actions plus for an appreciative time. The avowal of cash flows shows how a company’s cash comes in and out of a matter. It reports behind reference to where the cash came from and where the cash went. The undertaking description financial accounting produces is the declaration of owners equity. The avowal of owners equity reports which actions increased or decreased the equity section from the tab sheet. Financial accounting gives more of an overall characterize even if managerial accounting gives a detailed summary of by-products or regions.

Similarities and Differences Part 04;

Other differences between the two types of accounting are neighboring legitimate requirements, timing, and confidentiality. Financial accounting reports stand required to file by the conflict at the decrease of each accounting time. The flavor contained in the reports and statements exists not kept confidential sustain outside stakeholders use the reports to create decisions amalgamated to whether or not to invest in the company or lend keep to them. Managerial reports exist kept confidential because they contain twinge sponsorship about products and costs. There are no legitimate requirements for managerial accounting statements. Managers can demand these statements at any become early and to the fore any frequency, they run necessary.

While there are similarities and differences, both financial and managerial accounting statements are important for businesses to gauge their profits and expenses. Both types are crucial for their meant audiences and stand used to make important decisions. Each accounting type has value to the companies they put in upon.

Similarities and Differences between Financial and Managerial Accounting; Image by Oliver Putz from Pixabay.

May 26, 2022
Accounting Software Meaning Definition Features Classification

Accounting software is a computer software system and its functional modules specially used for accounting and financial management, including a set of programs that direct the computer to perform accounting and management work, stored data, and related materials. For example, the accounting processing module in they not only includes the procedures and basic data (accounting subjects, vouchers, etc.) that instruct the computer to perform accounting processing but also includes relevant technical materials such as software manuals to guide users to conduct accounting. Handling operations.

Here is the article to explain, How to define the Accounting Software Meaning Definition Features Classification!

Accounting software usually has the following main functions: 1. Provide data input directly for accounting and financial management; 2. Generate accounting data such as vouchers, account books, and statements; 3. Convert, output, analyze, and utilize accounting data.

Features and Characteristics of Accounting Software;

The features and characteristics of functional modules of the accounting software include the following parts:

Accounting processing module;

The accounting processing module mainly uses accounting vouchers as the original data, records, classifies, calculates, processes, and summarizes the economic contents contained in the accounting vouchers according to the accounting subjects and statistical index system, and outputs the general ledger, the detailed ledger, Journals, and other auxiliary books, vouchers, and reports.

The accounting processing module mainly includes 1. Initial accounting (account establishment); 2. Voucher processing (input, review, summary); 3. Inquiry; 4. Reconciliation;

The initial accounting is the process of customizing the accounting subject system, accounting voucher format, and account book system according to program requirements and internal management needs. It is equivalent to setting up a new accounting system in a manual state, which is the process of using a computer to create an account. Also, Voucher processing includes voucher input, modification, review, summary, and printing.

The query is to set the query condition flag, to flexibly and quickly query the accounting vouchers of a certain accounting period, and also the relevant content of the sub-ledger and general ledger. For example: find accounting documents of specific content, find the balance or balance of accounting subjects, etc.

Other things;

Part of the reconciliation function exists automatically checked and checked by the program during the design of the accounting software, such as checking the accounts between the general ledger, the subsidiary ledger, and the journal; the other part is provided for the user to check, such as checking with the bank statement. , check with the current account, check with other auxiliary accounts, etc., and can make relevant information such as reconciliation tables.

The checkout function stands completed by the program. Also, According to the provisions of the national accounting system, the calculation and summarization are carried out according to the classification of the accounting subjects, the loan amount and balance are settled, the current accounting is ended, and the next accounting cycle is started. The checkout also includes the carry-over of accounting information across years and special content that starts a new fiscal year. The printout function is to print accounting vouchers, account books, and other accounting information for users to use and archive.

Report processing module;

The report processing module prepares accounting reports according to the accounting data according to the national unified accounting system and provides financial reports to company managers and government departments. Accounting statements can stand divided into individual statements, summary statements, and consolidated statements according to the scope of their compilation.

The report processing module includes 1. report definition; 2. report calculation; 3. report summary; 4. report query; 5. report output.

Statement definition is the work done to establish a new reporting system based on accounting software. It mainly includes: defining the report name, describing the format of the blank form, defining the data source of the report item filling content, the report item and the operation relationship, determining the form item auditing and checking and the linking relationship between the report items, checking the formula and the summary scope of the summary report and so on.

After the report stands defined, the required accounting report can exist calculated or summarized according to the regulations. After verification and verification, the accounting report can be printed, copied, inquired about, and output.

Fixed assets accounting module;

The fixed assets accounting module is mainly used for detailed accounting and management of fixed assets.

The fixed assets accounting module includes; 1. establishing a fixed assets card; 2. establishing a fixed asset account book; 3. inputting changes in fixed assets; 4. withdrawing depreciation of fixed assets; 5. summary calculation; This module is mainly based on the provisions of the financial system to establish a fixed asset card, determine the coefficient and method of depreciation of fixed assets, enter the increase or decrease of fixed assets, and summarize and calculate the original value, accumulated depreciation and net value of fixed assets. Automatically prepare transfer entries according to the pre-design, complete the transfer records, print out the fixed asset sub-ledger and data card, and reflect the value of fixed assets in detail.

Payroll accounting module;

The salary accounting module calculates the salary of the employees and also handles the salary accounting based on the original data of the individual salary of the employees.

The salary accounting module includes 1. Designing salary items and project calculation formulas; 2. Entering basic salary data of employees; 3. Increase, decrease, change, and modification; 4. Calculation summary; 5. Query; 6. Print output.

The payroll accounting module, firstly designs the project and project calculation formula of salary, enters the amount that should be paid, deducted, and paid by the employee according to the project, and calculate and distribute the zero and whole money of different denominations according to the user’s requirements.

This module should have items for self-defining salary, select the classification method, flexibly revise salary items, adjust basic personal information of employees, and define salary calculation formula (such as withholding personal income tax calculation formula) for summary calculation. Automatically make transfer vouchers, fill in entries, make a salary distribution, and calculate salary and welfare fees.

Other modules;

Other modules mainly include inventory accounting, cost accounting system, accounts receivable accounting, sales accounting, financial analysis, and so on. According to the characteristics of the industry, there are retail invoicing accounting systems, wholesale invoicing accounting systems, and so on. According to the needs of management, there are labor, capital, and also personnel management system, state-owned asset management system, etc.

Types or Classification of Accounting Software;

The types and classification of the accounting software include the following parts:

According to the scope of the application;

General accounting software refers to them that is applicable within a certain range. It is further divided into full general and industry general accounting software.

Fixed-point development of accounting software, also known as special-purpose accounting software; refers to them that is only applicable to the accounting business of individual units.

According to the hardware structure;

Single-user refers to the installation of accounting software on one or several computers, each computer runs independently, and also the generated data is only stored in this computer, and data exchange and exchange between computers cannot be performed directly shared.

Multi-user (network) refers to the installation of accounting software on the host (server of a computer network) of a multi-user system; each terminal (workstation) in the system can run at the same time, and accountants on different terminals (workstation) can share accounting information.

Accounting Software Meaning Definition Features Classification; Image by Mohamed Hassan from Pixabay.

April 18, 2022
What should you learn to get an Accounting Job Boards?
Accounting Job Boards, Not everyone is cut out to become an expert financial professional, but you can be. Sounds too good to be true? Well, it is true. According to the job search platform Naukri, the accounting and taxation jobs grew by 28%, making it quite clear that accounting is one of the most sought-after career options. But the top layer of financial professionals bagging top-notch jobs usually has more than just a bachelor’s degree in accounting.

Here is the article to explain, What should you learn to get an accounting job boards?

Finance aspirants are of two types – one who is established in their field but always on the look to upskill themselves, and the other is someone who is still in the lower rung of the finance career ladder with an urge to scale up.

What should you learn to get an Accounting Job Boards?

Whether you have accounting experience or are a fresh graduate, we believe there are some things you have to do right to get a well-paying and career-defining accounting job boards.

The Skills You Need for An Accounting Job;

Accounting jobs are almost always high in demand, and for an individual with proper training and skills, securing a lucrative accounting job is relatively easy. In addition to an accounting degree from a reputed institution, it is also crucial to have specialized knowledge. Brushing up on your technical and accounting jobs skills will come in handy during your interview and profession.

We believe you should focus on these three points to advance your financial career.
- Brush up on your analytical and soft skill
An accountant’s work is highly detail-oriented and meticulous. You will required to sift through pages of documents, crunch numbers, and make sure every detail you’ve entered is accurate and reliable.

In addition to analytical and mathematical skills, you should gain communication and soft accounting skills. Being meticulous, organized, and developing interpersonal skills can help you succeed in your career.

Skills of Accounts
- Spruce up your Software Skills
Yes, you read that right.

Software skills needed for an accountant. It is true, especially when applying for an entry-level position, as having software skills adds a lot of weight to your resume. Nothing fancy, but essential domain-related software skills will come in handy when applying for an accountant’s job.

Technical accounting skills;

Your technical accounting skills will also be beneficial during your career as an accountant. You must have hands-on knowledge using several software programs and tools. Of course, spreadsheets are very commonly used tools, but various others come into the picture too.
- Accounting Software: This software acts as a centralized repository of financial information related to a business. It documents all transactions and makes the documents available for tax preparation, planning and reporting. Some examples of accounting software are QuickBooks Online and Tally, Zoho Books.
- ERP Solution: Enterprise resource planning is an organization-wide software that handles accounting, compliance, expense management, revenue management and more. Some examples of ERP Finance are SAP S/4 HANA and Oracle Cloud.
- Financial Analysis Software: Financial analysis software helps the organization foresee trends, analyze, and compare financial statements to make data-driven business decisions. Some examples are Oracle Essbase, Zoho Analytics, and Delphi Technology.
- Tax Preparation Software: Tax preparation software makes preparing and filing taxes accessible and compliant. Some examples are Clear Tax, Tax planner, and Zoho Books.
Have you chosen finance and accounting to be your career but don’t know which courses for accounting could give you the upstart you need? Or, do you have a well-paying boards of accounting job, yet you aren’t getting the promotion you deserve?

In either of the cases, you have to upskill yourself with a credible course. And, ACCA is the best course you can choose for yourself.

ACCA course;

ACCA is a globally recognized industry-relevant course that opens up multiple career options for you. The ACCA course is suitable for higher secondary students who can earn an advanced diploma in Accounting or a B.Sc. (Hons) degree in Applied Accounting from Oxford Brookes University along with their ‘Chartered Certified Accountant program’.

ACCA course

ACCA is an excellent program to upskill and make yourself more industry-ready. Even if you have accounting job skills experience or have a professional degree, an ACCA program can open up vast career opportunities in several accounting fields.

For example, you can employed as an accountant, internal auditor, business and financial analyst, credit control manager, CFO, and more. Moreover, all major employers of ACCA certificate holders are the Big 4 or large conglomerates.

What makes the ACCA course ideal for financial career aspirants is that this course opens you up to global opportunities. ACCA qualified accountants given preferential status in almost 60 countries. One of India’s boards highest-paid accounting jobs is held by ACCA certification.

The Chartered Certified Accountants training program provided extensive accounting and financial knowledge backed with industry-relevant content. Also, The course is flexible, allowing students to study at their skill and knowledge level. The course options open to students acing the ACCA certification is immense, and also it is perfect for building a successful career.

The Scope for Accountants in India;

There is a vast scope for growth for accountants in India. You can get an accounting job boards in an entry-level or executive-level position with suitable qualifications. Since the accounts and finance department is a crucial and integral part of any organization; also it is almost immune to recession and layoffs.

While it is true that some accounts can find their jobs being made redundant because of digital transformation, with the right specialization and upskill certifications like ACCA, it is possible to become a critical asset to the organization.

The demand for accountants is constantly increasing – with jobs opening up in the private, public and non-profit sectors.

Accountants Jobs in India;

As an accountant, you can employed by a start-up, an established private business or a huge public sector company.

Some of the job responsibilities of an accountant are:
1. Preparing and filing taxes
2. Preparing the budget
3. Recording all financial transactions
4. Handling documentation for audit purposes
5. Handling internal auditing by complaining about tax rules and norms
6. Coordinating with stakeholders and external auditors
7. Ensuring credibility and accuracy in financial records to aid in planning, budgeting, and strategy formulation.
Accountants perform several duties depending on the employer, the domain and sector.

Whether you are working – for an individual, a company, a public sector undertaking or a government agency – an accountant will expected to know financial accounting, basic accounting skills, laws and taxes. Moreover, as an accountant, you will also be responsible for scrutinizing companies’ internal documents, analyzing them, and providing valuable insights for growth.

What specializations can I do in Finance and Accounting?

Specialization in finance and accounting acts as a foundation for successful careers in corporate finance, financial management, auditing and controlling strategic management, and consulting. ACCA qualifications can take you places, especially in specialized financial, controlling and auditing areas. Based on the domain, you can get placed in an organization’s decision-making levels.

Financial Analyst:

As a financial analyst, you will be responsible for analyzing historical and current financial data, studying trends, and making data-driven business growth recommendations. You can get placed in the banking, insurance, securities mutual fund sector.

Chartered Accountants:

Internal or external auditors are one of the most sought-after positions across industries. Also, Chartered Accountants are responsible for managing financial statements in compliance with laws and accounting procedures.

Controller:

The controller position has been seeing a huge spike in recent years. Also, Controllers are responsible for tax statement preparation, earning analysis, and other financial reports. Controllers manage internal auditing, compliance, budgeting and accounting.

How are the Job Satisfaction levels in the accounting field?

Accounting jobs boards are one of the most satisfying jobs out there!

You don’t have to take our word but trust these statistics.

In a study conducted by Total jobs and Universum, 16000 workers were asked to rate their job satisfaction levels. It was found that the highest levels of job satisfaction were among auditors and accountants. Moreover, they were more likely to recommend the employer to a friend and least likely to quit the industry.

Like any job, accounting jobs can also get stressful; however, it is easy to mitigate the stress levels with the proper training, knowledge, and skill.

With the right experience and expertise, accountants get paid top money and can save for their future. Moreover, accounting jobs’ stress levels peak only during the tax season – most likely from January to April. After this season, there is a lull, and the remainder of the year is predominantly stress-free.

Accounting jobs give you the freedom to engage yourself in other enriching activities and also spend time with your family. Unlike other jobs where the work timings could stretch beyond the usual office hours, most accounting jobs adhere to office timing.

There are several avenues for skill improvement and enhancements, such as gaining any ERP Finance certification or enrolling in ACCA courses, that can propel your career quickly.

Types of Jobs you can apply for right now.

The types of jobs open right now are truly mind-boggling. But when you upskill yourself, you can placed at the highest decision-making levels in an organization.

Types of Jobs

Most accounting jobs considered recession and pandemic-proof, as there is hardly a slump in their growth rate. Since accountancy jobs are a necessity in almost any company or industry, this career considered secure and stable.
1. Accountants
2. Financial Analysts
3. Compliance Officers
4. CFO
5. Risk Manager
6. Budget Manager
7. Funds Manager
8. Portfolio Manager
9. Auditor
10. Financial Advisors
11. Company Secretary
12. Certified Public Accountants
However, with the right experience and skills, you can grow from an accountant to Chief Financial Officer, Account Manager, Financial Manager, and Controller, Chartered Accountant, or even a Financial Director.

The best strategy to build a career in accounting would be to upskill yourself with advanced courses such as ACCA, which gives you both a graduation degree and specialization options and leads you to a high-paying job in a leadership role.

Are you ready to take the next step towards a fulfilling career?

With a Chartered Certified Accountant course from IMS ProSchool, you can have the career you have always wanted. A degree in accounting promises a good career, but as a Chartered Certified Accountant, you can enjoy the fastest career growth in the field of your choice.

Upgrade yourself with a well-designed curriculum, taught by experienced industry professionals, and at a pace that enriches your skills. Edge out the competition with a professional globally recognized certification that places you on par with the best in the industry.

Conclusion;

Are you ready to take the next step towards a fulfilling career? As a chartered Certified Accountant, you can have the career you have always wanted. Also, Specialization and upskilling act as a springboard to land lucrative and top-management jobs in multinational companies. A degree in accounting promises a good career, but as a Chartered Certified Accountant, you can enjoy the fastest career growth in the field of your choice.
March 29, 2022
Accounting: Meaning, Nature, Objectives, Functions, Limitations
Accounting is a method for conveying the aftereffects of business tasks to different gatherings keen on or associated with the business viz., the proprietors, leasers, speculators, banks and monetary establishments, Government, and different organizations. Thus, it properly calls the language of business. Accounting essay isn’t just connected with the business yet also with everyone, who is keen on keeping a record of the money-related exchanges. By and large, the term “accounting” or “account” alludes to monetary accounting.

Here is the article explain, Accounting: Meaning, Definition, Nature, Objectives, Functions, Limitations, and Scope.

It is essentially the precise cycle of handling all the monetary exchanges and business records. All in all, It is an accounting cycle that records exchanges, keeps monetary records, performs examinations, and so on It is a stage that helps through numerous cycles, for instance, distinguishing, recording, estimating, and gives other monetary data.

It is the language of money. They pass on the monetary situation of the firm or business to any individual who needs to know. It assists with deciphering the functions of a firm into unmistakable reports that can be looked at. Also, it is about the interaction that assists with recording, sum up, investigate, and report information that worries monetary exchanges.

ALOE stands:

It is about the term ALOE. Try not to mistake it for the plant! ALOE is a term that has a significant task to carry out in the accounting scene and the understanding of the meaning of accounting. Here is the thing that the abbreviation, “A-L-O-E” signifies.
- A= Assets
- L= Liabilities
- E= Owner’s Equity
This is one of the fundamental ideas of accounting. The condition for the equivalent goes this way:

Resources or Assets = Liabilities + Owner’s Equity

Here is the meaning of each term that ALOE stands for.
- Assets: Assets are the things that have a place with you and you are the proprietor of them. These things relate to “esteem” and can serve you money in return for it. Instances of Assets are Car, House, and so forth
- Liabilities: Whatever you own is a risk. Indeed, even an advance that you take from a bank to purchase such a resource is a risk.
- Owner’s Equity: The aggregate sum of money somebody (anybody) puts resources into an association is Owner’s Equity. The venture done isn’t really cash consistently. It tends to be as stocks as well.
Meaning and Definition of Accounting:

What does mean accounting? Here are the Different scholars and Institutes have to define them differently you’ll understand. The important among them are as follows below are:

The Committee on Terminology, appointed by the American Institute of Certified Public Accountants defined accounting as,

“Accounting is the art of recording, classifying and summarizing in a significant manner and in terms of money, transactions, and events which are, in part at least, of a financial character and interpreting the results thereof.”

The American Institute of Certified Public Accountants has defined accounting as;

“The art of recording, classifying and summarizing in a significant manner and in terms of money transactions and events which are, in part at least of financial character, and interpreting the results thereof”.

Above the definition is in keeping with the enlarged scope of accounting.

In the words of Smith and Ashburne;

“Accounting is the science of recording and classifying business transactions and events, primarily of a financial character, and the art of making significant summaries, analysis, and interpretation of those transactions and events and communicating the results to persons who must make decisions or form a judgment.”

Truth be told, this is the mainstream meaning of accounting that diagrams completely the very nature and extent of the accounting movement. The general gist of accounts, in this way, is from the chronicle of exchanges to imparting the outcomes thereof to the concerned gatherings.

Kind or Nature of Accounting:

We realize Accounting is the methodical chronicle of monetary exchanges and the introduction of the connected data of the fitting people. The essential highlights of accounts are as per the following:

Accounting is a cycle:

A cycle alludes to the strategy for playing out a particular occupation bit by bit by the objectives, or target. It distinguishes as a cycle as it plays out the particular errand of gathering, preparing, and conveying monetary data. In doing as such, it follows some unmistakable advances like the assortment of information recording, grouping outline, conclusion, and announcing.

Accounting is a craftsmanship:

Accounting is the specialty of recording, arranging, summing up, and settling monetary information. The word ‘craftsmanship’ alludes to the method of performing something. It is social information including certain imagination and ability that may assist us with achieving some particular objectives. It is a deliberate strategy comprising of unequivocal strategies and its appropriate application requires applied ability and aptitude. In this way, by nature accounting is craftsmanship.

Accounting implies and not an end:

They discover the monetary outcomes and position of a substance and simultaneously, it conveys this data to its clients. Also, The clients at that point take their own choices dependent on such data. In this way, it tends to say that simply keeping records can be the essential target of any individual or element. Then again, the principle objective might recognize as taking choices dependent on monetary data provided by accounting. Subsequently, they themselves certainly not even hand, it assists with accomplishing a particular goal. So it says the accounting is an unfortunate obligation’ and it isn’t ‘an end in itself’.

Accounting manages monetary data and exchanges:

It records the monetary exchanges and dates in the wake of grouping the equivalent and concludes their outcome for an unequivocal period for passing on them to their clients. Thus, from start as far as possible, at each stage, they manage monetary data. Just monetary data is its topic. It doesn’t manage non-money related data of non-monetary angles.

Accounting is a data framework:

They perceive and describe it as a storage facility of data. As an assistance work, it gathers measures and conveys the monetary data of any element. Also, This order of information has been developed out to address the issue of monetary data needed by various intrigued gatherings.

Purpose or Motives or Objectives of Accounting:

Coming up next are the principal purpose or objectives of accounting;

To keep up full and orderly records of deals:

It is the language of deals. Given the limitations of human memory, the primary goal of accounting is to keep a full and efficient record of all deals.

To determine the benefit or loss of the business:

Business races to acquire benefits. Regardless of whether the business acquired benefit or brought about misfortune learn by accounting by setting up a Profit and Loss Account or Income Statement. A correlation of pay and consumption gives either benefit or misfortune.

To portray the monetary situation of the business:

A money manager is additionally keen on learning his monetary situation toward the finish of a given period. For this reason, a position proclamation calls a Balance Sheet set up in which resources and liabilities appear. Similarly, a specialist will feel the beat of his patient and know if he is getting a charge out of good wellbeing, similarly by taking a gander at the Balance Sheet one will know the monetary strength of an endeavor. On the off chance that the resources surpass liabilities, it is monetarily sound, i.e., dissolvable. In the other case, it would be bankrupt, i.e., monetarily powerless.

To give accounting data to the invested individuals:

Aside from the proprietor of the business undertaking, different gatherings are keen on accounts data. These are brokers, loan bosses, charge specialists, planned speculators, scientists, and so on Consequently, one of the objectives of accounting is to make the accounts data accessible to these invested individuals to empower them to settle on sound and sensible choices. Also, The accounts data made accessible to them as the yearly report.

Functions of Accounting:

To push forward to the functions of accounting, above all else, it is vital to think about the job of accounting. Also, The essential part of accounting is to give applicable monetary data to the finance managers and the partners. Besides, encouraging the dynamic cycles and keeping them refreshed. There are two kinds of functions of accounting, first, authentic working, and second, administrative functionals.

Historical or Authentic Functions:

The verifiable working of accounting includes keeping exact records of all the previous exchanges made in the business. This kind of working of accounting incorporates:
- Recording the monetary exchanges and keep a diary to keep them all.
- It is imperative to characterize and isolate the records and the record.
- The readiness of rundown happens for the brisk surveys.
- This kind of accounting gives the net outcome other than keeping the records.
- The readiness of asset report happens to decide the monetary situation of the business.
- The broken-down information and records are then utilized for different purposes.
- The last advance is to impart the acquired monetary data to the intrigued areas, for example, proprietors, providers, government, analysts, and so on.
Managerial or Administrative Functions:

In an association, the administration advisory group searches for all sorts of dynamics. To guarantee that the choices are smooth and valuable for everybody, they assess the records given by accounting. These are administrative functions. The five administrative functions of accounting are:
- Development of plans notwithstanding controlling the monetary approaches.
- Other than that, a spending plan is set up to assess the complete consumption for future exercises.
- Additionally, cost control makes conceivable by contrasting the expense and the productivity of the work.
- The accounts additionally give vital data during the assessment of the worker’s presentation.
- To check for cheats and mistakes is the thing that the functionality of the entire method relies upon.
Limitations of Accounting:

The limitations of accounting are;

Recording just money-related things:

According to accounting standards, just the occasions quantifiable regarding cash are recorded in the books of records. In any case, occasions vital if not quantifiable regarding cash are not represented. Thus, recorded accounts data neglects to show the specific monetary situation of a business concern.

Time Value of Money:

Under the accounting framework, cash esteem is dealt with continually. Be that as it may, the estimation of cash consistently changes because of expansion. Under existing, accounting frameworks accounts are kept up thinking about verifiable expense overlooking current changed worth. Accordingly, the records kept up neglect to display the specific monetary situation of a business concern.

Proposal of elective strategies:

There exists a utilization of elective strategies in deciding the deterioration of resources and valuation of stock and so on. Also, Data concerning the exercises of the business is communicated misleadingly if an elective technique is utilized to accomplish a specific item.

Control of Accounting Principles:

Displayed accounts data can’t generally show a valid and reasonable image of a business concern attributable to limitations of the accounting standards utilized. For instance, Fixed resources are appeared after deducting deterioration. On account of swelling, the estimation of fixed resources that appeared in the records doesn’t relate to the genuine position.

Recording of past occasions:

Their past occasions are represented. Yet, normally, there is no arrangement of recording occasions that may happen later on.

Distribution of issue:

The distribution interaction is a significant issue in the accounting framework. The estimation of fixed resources is depleted charging deterioration for the distributed period. Also, The valuable existence of repaired resources is fixed speculatively which doesn’t stand precisely much of the time.

Looking after mystery:

The mystery can’t be guaranteed for the association of numerous representatives in accounting work even though keeping up mystery is vital.

The propensity for mystery holds:

Frequently the executives make mystery holds purposefully by expanding or diminishing resources and liabilities for which the absolute monetary image of an association isn’t reflected.

Significance of structure over substance:

At the hour of planning represents a specific period accentuation is laid on the structure, table, and so forth as opposed to offering significance to a display of considerable data. According to Company Act, planning of the asset report in the endorsed structure is mandatory.

Even though there are a few limitations in the current accounting framework, accounting in the present-day world has commonly been acknowledged as a perceived calling. Also, Endeavors are on all through the world to beat these limitations. Monetary exercises of any general public without accounting are neither conceivable nor lawful.

The extent or Scope of Accounting:

They have a wide degree and territory of utilization. Its utilization isn’t bound to the business world alone yet spread over in all the circles of society and all callings. These days, in any social establishment or expert action, if that is benefit acquiring, monetary exchanges should occur. So there emerges the requirement for recording and summing up these exchanges when they happen and the need of discovering the net consequence of the equivalent after the expiry of a specific fixed period. Plus, the is likewise the requirement for understanding and correspondence of that data to the suitable people. Just accounting use can help defeat these issues. You can further simplify your accounting with tools such as Microsoft Access Cloud Database or Drake etc. Learn more about it from DaaS Providers.

Other things:

In the advanced world, the accounting framework is polished no just in all the business establishments yet additionally in numerous non-exchanging organizations like Schools, Colleges, Hospitals, Charitable Trust Clubs, Cooperative social orders, and so forth, and likewise Government and Local Self-Government as Municipality, Panchayat. Proficient people like Medical specialists, rehearsing Lawyers, Chartered Accountants, and so forth likewise receive some reasonable sorts of accounting techniques. Truly, accounting strategies are utilized by all who are associated with a progression of monetary exchanges.

The extent of accounting, as it was in before days, has gone through heaps of changes lately. As it is a unique subject, its degree and region of activity have been continually expanding staying up with the progressions in financial changes. Because of persistent examination in this field, new regions of use of accounting standards and approaches arise. Public, HR, and social Accounting are instances of the new territories of the utilization of accounting frameworks.

Accounting: Meaning, Definition, Nature, Objectives, Functions, Limitations, and Scope; Image from Pixabay.
February 3, 2021

Difference between a Ledger and a Journal with Table

A General Ledger and Journal Difference: The twofold section arrangement of accounting or double entry system of bookkeeping says that each exchange influences two records. There is an appropriate technique for recording each monetary exchange in this framework, called a bookkeeping cycle. The cycle begins from the journal followed by ledger, preliminary equilibrium, and last records. Accounting essay: Journal VS Ledger are the two columns that make the base for getting ready last records. The Journal is where all the exchanges record promptly when they occur which then characterizes and moves into the concerned record known as Ledger.

Here is the article explain; Difference between a General Ledger and a General Journal with a Table.

Journal otherwise calls the book of essential passage; which records exchanges in sequential request. Then again, Ledger, or also called the chief book infers a bunch of records wherein comparable exchanges, identifying with the individual, resource, income, obligation, or cost follow. In this article, we have assembled all the significant differences between general Journal vs Ledger in bookkeeping, in plain structure.

As far as bookkeeping, the essential difference between the two is that the journal goes about as the underlying method of the section for all exchanges. The passages then arrange and gone into the ledger. Together the journal and the ledger help make a twofold section accounting record framework. From the start, it may seem like both a journal and a ledger fill a similar need, which causes it to seem like it may somewhat excess to keep both.

Be that as it may, for reasons unknown, they are not actually something very similar. Truth be told, every one of them fills an alternate need, and the two of them are significant. Subsequently, it considers posing the inquiry; what precisely the difference is between them. Regarding bookkeeping, the essential difference between the two is that the journal goes about as the underlying method of passage for all exchanges. The passages then order and go into the ledger.

A General Ledger and Journal:

Together the journal vs the ledger help make a twofold passage accounting record framework. Subsequently, it very well may be said that both are similarly significant for successful accounting. At the point when the exchange initially happens, the section notes in the journal. The passages in the journal then gather and classify into five important bookkeeping things that incorporate costs, resources, incomes, liabilities, and capital. When ordered, they are then gone into the comparing part of the ledger. Each segment of bookkeeping thing, for example, costs, resources, and so forth has a two-sectioned, T-formed table.

One side is the charges, while the other is the credits. Inside the ledger, the exchanges ought to in a perfect world adjust, for example, both charge and credit sections ought to have a relating passage. In many ledgers, the charge sections situate on the left half of the T-formed table, and credit passages situate on the right. Another difference between the two is that in the journal the sections note by the date of the exchange, though in the ledger the passages really note by class and sort of exchange.

The journal goes about as a spot to simply note down the exchanges so they can sort and utilized later on; which would happen in the ledger. It tends to say that the journal is the primary draft, though the ledger the refine second draft. Nonetheless, it ought to note and because of the ascent in accounting programming, the utilization of journals and ledgers is diminishing. Today, the inclination is to utilize PCs and programming which computerize the errand of accounting, accordingly making this convoluted assignment very simpler.

Meaning and Definition of Ledger:

Ledger is a chief book that includes a bunch of records, where the exchanges move from the Journal. When the exchanges enter into the journal, at that point they group and posted into discrete records. Also, The arrangement of genuine, individual, and ostensible records where account shrewd portrayal record, knows as Ledger.

While posting sections in the ledger, singular records ought to be opened for each record. The configuration of a ledger account ‘T’ forms having different sides of charge and credit. At the point when the exchange records on the charge side the word ‘To’ add, nonetheless, on the off chance that the exchange is to record on the credit side, at that point, the word ‘By’ utilize in the specific section alongside the record name.

Toward the finish of the monetary year, the ledger account adjusts. For this reason, above all else, the aggregates of the different sides resolve, from that point forward, you need to ascertain the difference between the different sides. If the sum on the charge side is more than the credit side, at that point there is a charge balance, yet on the off chance that the credit side is higher than the charge side, at that point there is a credit balance. Assume if a record has a charge balance, at that point, you need to state “By Balance c/d” on the acknowledged side for the difference sum. Thusly, the two sides will count.

Presently, toward the start of the new period, you need to move the initial equilibrium to the contrary side (for example On the charge side according to our model) as “To Balance b/d”. Here c/d alludes to conveyed down, and b/d methods cut down.

Meaning and Definition of Journal:

The Journal is an auxiliary daybook, where financial exchanges record unexpectedly, at whatever point they emerge. In this, the exchanges routinely record efficiently, so they can allude to later on. It features the two records which influenced by the event of the exchange; one of which charges and the other credits with an equivalent sum.

A short note gives on the side of every passage; which gives a concise portrayal of the exchange, known as Narration. Also, The total cycle of recording the sections in the journal knows as Journalizing. It has five sections which are Date, Particulars, Ledger Folio, Debit, and Credit. A journal can be:

Single Entry: Entry having one charge and relating credit.
Compound Entry: Entry having one charge and more than one credit or passage having more than one charge for a solitary charge or at least two charges and at least two credits. On account of the compound section, it ought to remember that the absolute of charge and credit will count.

Comparison or distinction between Journal and Ledger, Chat Table:

Topic	Journal	Ledger
Definition	Journal is a book of accounting where daily records of business transactions are first recorded in a chronological order i.e. in the order of dates.	A ledger is an accounting book in which all similar transactions related to a particular person or thing are maintained in a summarized form.
Purpose	Bookkeeping account book.	Bookkeeping account book.
Description	Primary book of accounting or the book of original or first entry.	Principal book of accounting or the book of final entry.
Entries	It prepares out of transaction proofs such as vouchers, receipts, bills, etc.	It prepares with the help of a journal itself, therefore, it is the immediate step after recording a journal.
Record keeping Type	In chronological order, i.e. in the order of purchase, selling, etc.	According to type/ category of transactions
Transactions	Account Transactions record in the journal without considering their nature of classification.	Account Transactions record in the ledger in the classified form under respective heads of accounts.
Balance	A journal does not balance.	Except nominal accounts all ledger accounts are balanced to find the net result.
Procedure	The procedure of recording in a journal is known as journalizing, which performs in the form of a Journal Entry.	The procedure of recording in a ledger knows as posting.
Divisions	It may subdivide into a cash book, a sales daybook, sales return daybook, purchases daybook, purchases return daybook, B/R Book, B/P Book, Petty Cash Book.	It may sub-divide into General ledger, debtors/sales ledger, creditors/purchases ledger.

Journal VS Ledger:

The difference between journal vs ledger can draw plainly on the accompanying grounds:

The Journal is where all the monetary exchanges are recorded unexpectedly, At the point when the exchanges are entered in the journal; at that point, they are posted into singular records known as Ledger.
The General Journal is an auxiliary book, while General Ledger is a chief book.
The Journal knows as the book of the unique section; however, Ledger is a book of the subsequent passage.
In the journal, exchanges are recorded in the sequential request; while in the ledger, exchanges are recorded in scientific request.
In the General Journal, the exchanges are recorded successively. Alternately, in General Ledger, the exchanges are recorded dependent on records.
Debit and Credit are sections in the journal; yet in the ledger, they are two inverse sides.
In the journal, a portrayal should be composed to help the passage. Then again, in the ledger, there is no prerequisite for portrayal.
Ledger records should adjust; however, the journal need not adjust.

Conclusion or Summary or End:

To start with, we discussed the method of recording an exchange. It includes a progression of activities like they are first recorded in the journal; from that point, they are arranged and assembled into discrete records and posted into the ledger; which is then moved to preliminary equilibrium, and toward the end, the last records are readied. These means give a base to set up the monetary records of an organization. If any of the above advances is missing, at that point; it is difficult to set up the last records.

January 18, 2021

Arrangement of Assets and Liabilities by Marshalling Methods

What are Marshalling Methods? Accounting Essay – When we perfect the arrangement of assets and liabilities their position in the balance sheet, then they call Marshalling. The main purpose of the Balance Sheet is to show the financial position of the business or the company’s current position. How to an arrangement of assets and liabilities by Marshalling Methods? Therefore, assets and liabilities in the Balance Sheet should show in such an order which helps to understand the financial condition easily of current years. To serve these main objectives assets and liabilities record in the Balance Sheet in a certain order written by the accounting operator; That’s the order of assets and liabilities in the Balance Sheet calls Marshalling.

Methods of Marshalling: How to Arrangement of Assets and Liabilities? Explain Step by Step.

The expression “Marshaling” alludes to the request where the different assets and liabilities appeared yet to determine sheet. The assets and liabilities can indicate either in the request for liquidity or in the request for perpetual quality. The way toward masterminding the accounting report things (assets and liabilities) in a particular request knows as the Marshaling of assets and liabilities.

For instance, between two leasers, if one has responded to one wellspring of assets and different has a plan of action to two such sources, the court will marshal the assets, so the cases of the two banks are fulfilled most fairly.

The following Methods of Marshalling is three types Permanence, Mixed, and Liquidity; all methods deeply explain below are;

The Order of Permanence:

By this method, the assets show according to their permanency i.e. permanent assets show first, and less permanent assets show afterward. This order is exactly the reverse of the above. Also, Assets and liabilities record in the order of their life in the company concern. Similarly, the fixed and long-term liabilities write first and the current liabilities afterward on liabilities columns. The following is the specimen of the balance sheet by this order is as below under by Marshalling Methods;

Assets

Amounts

Liabilities

Amounts

Fixed Assets:

Furniture and Fixtures
Land and Buildings
Motor Vehicles
Plant and Machinery

Current Assets:

StockPrepaid
Insurance

Liquid Assets:

Debtors
Bills Receivables
Cash at Bank
Cash in Hand

Long-term Liabilities:

Capital
Mortgage Loan

Current Liabilities:

Trade Creditors
Bills Payables
Bank Overdraft

Total

$$$$

Total

$$$$

Under this method, the assets orchestrate in the diminishing request of changelessness or also an order of permanence.

Arrangement of Assets:

The resource with the most noteworthy lastingness is put first (at the top) and the resource with the least perpetual quality is set to last.

Generosity views as the resource with the most noteworthy lastingness.
It moves out of the association just when the association broke up.
Money views as the resource with the least perpetual quality.
It continues to move in and out routinely.

Lastingness can perceive as the converse of liquidity. Even though it’s anything but a prerequisite that a less fluid resource ought to have more noteworthy changelessness, this thought holds by and large. Consequently, the Order of changelessness views as the opposite of the Order of Liquidity.

Arrangement of Liabilities:

Each obligation is upheld to the degree of its worth, by at least one asset. Expecting all liabilities are gotten by paying out, we need money to clear the liabilities. To clear transient liabilities, we bank on assets that can rapidly change over to money. Since momentary liabilities are to clear at the short notification, we use assets with a short life expectancy, which are for the most part the ones that can expediently change over to money (more fluid assets) to clear the transient liabilities.

Momentary liabilities like loan bosses, bank overdrafts coordinate with assets with a lesser changelessness (for more fluid example assets), while long haul liabilities coordinate to assets with a higher lastingness (for example assets that are less fluid).

Since assets with higher changelessness are put at the top (first), under this method, the liabilities with higher perpetual quality are put first (so they coordinate the assets with higher lastingness) and the liabilities with lesser changelessness are put last.

Capital views as the obligation with the most elevated lastingness.
Paying out capital adds up to dissolving the association.
It must pay out simply after all other liabilities payout.
Bank Overdraft view as the risk with the least lastingness.
It must pay at the soonest.
It gets changed with each exchange carried on that includes the association’s financial balance.

The Order of Mixed:

According to this order of arrangement, the assets arrange in the order of liquidity; and, the liabilities arrange in the order of permanency on their sides. Also, The format of the Balance sheet prepared under this method is as below under by Marshalling Methods;

Assets

Amounts

Liabilities

Amounts

Liquid Assets:

Cash in Hand
Cash at Bank
Bills Receivables
Debtors

Current Assets:

Stock
Prepaid Insurance

Fixed Assets:

Furniture and Fixtures
Motor Vehicles
Land and Buildings
Plant and Machinery

Long-term Liabilities:

Capital
Mortgage Loan

Current Liabilities:

Trade Creditors
Bills Payables
Bank Overdraft

Total

$$$$

Total

$$$$

The Order of Liquidity:

What is Liquidity? Liquidity means convertibility into cash easily in accounting. By this method, the current and fixed assets of the company enter in the balance sheet in the order of the degree of ease with which they can convert into cash; and, the liabilities in the order of urgency of payable. Assets will say to liquid if it can convert into cash easily, they place at the top of the balance sheet on the assets side. Also, Liabilities arrange in the order of their urgency of payable on the liabilities side. The most urgent payment to make lists at the top of the balance sheet. The order of liquidity generally uses by the sole traders and partnership firms. The following is the format of the balance sheet under the order of the liquidity method is as below under by Marshalling Methods;

Assets

Amounts

Liabilities

Amounts

Liquid Assets:

Cash in Hand
Cash at Bank
Bills Receivables
Debtors

Current Assets:

Stock
Prepaid Insurance

Fixed Assets:

Furniture and Fixtures
Motor Vehicles
Land and Buildings
Plant and Machinery

Current Liabilities:

Bank Overdraft
Bills Payables
Trade Creditors

Long-term Liabilities:

Mortgage Loan
Capital

Total

$$$$

Total

$$$$

Under this method, the assets mastermind in the diminishing order or request of their liquidity. Also, Liquidity is the quality of a resource to getting changed over to money. The quicker a resource can be changed over to money, the more fluid it is.

Arrangement of Assets:

The most noteworthy fluid resource is set first (at the top) and the most un-fluid resource is put last.

Money views as the most elevated fluid resource.
We needn’t bother with any an ideal opportunity to change money over to money.
Generosity views as the most un-fluid resource.
It is appended to the association and can acknowledge just when the association broke up.

Arrangement of Liabilities:

Each risk is upheld to the degree of its worth, by at least one asset. Also, Accepting all liabilities are gotten by paying out, we need money to clear the liabilities. Since transient liabilities are to be cleared at the short notification, we use assets that can expediently change over to money (more fluid assets) to clear the momentary liabilities.

Transient liabilities like lenders, bank overdrafts are coordinated with more fluid assets, while long-haul liabilities are coordinated with lesser fluid assets.

Since assets with higher liquidity are put at the top (first), under this method, the liabilities to be paid out at the most punctual are put first (so they coordinate the higher fluid assets) and the liabilities to be paid out last is put last.

Capital is the obligation that is paid out last.
Paying out capital adds up to dissolving the association.
It must pay out exclusively after all other liabilities payout.
Bank Overdraft is the risk that must payout at the soonest.
It gets changed with each exchange carried on that includes the association’s ledger.

January 18, 2021

Trading Account: Meaning, Definition, and Advantages
Trading Account Essay [in Hindi]: The first step of the final account is a trading account. A trading account is a nominal account that prepares at the end of the accounting year. They help to find out gross profit or gross loss during the accounting period. The trading account consists of two sides “debit and credit”. All direct expenses are debited and direct incomes are credited in the trading account. The trading account contains mainly the purchase of goods, The sale of goods, and expenses relating to the daily operation of the factory.

Here are the essay and article of Trading Account: Meaning, Definition, Advantages, Disadvantages, Limitations, Needs & Importance, and Objectives.

What is the Trading Account in Accounting? The account prepares to know the gross profit or gross loss of a company concern calls a trading account. It should note that the report of the business determined through a trading account is not final. The true reports the net profit or the net loss which is determined through profit and loss account. It can calculate using the following formula;

Cost of Goods Sales = Opening Stock + Goods Purchase – Closing Stock

After preparing the trial balance, the next step is to create a trading account; A trading accounts one of the financial statements that show the result of the purchase and sale of goods and services during the accounting period; The main purpose of preparing the trading accounts to find out the gross profit or gross loss during the accounting period; Gross profit is said to be when the goods sold have more income than sales.

Conversely, when sales proceeds are less than the cost of goods sold, there is a gross loss; to calculate the cost of goods sold, we have to take into account the direct expenditure on stock, purchase, purchase or manufacture of goods and closing of stock; The balance of this account i.e. gross profit or gross loss can mention on the profit and loss account in accounting.

Meaning and Definition of Trading Account in Accounting:

A business account is designed primarily to know the profitability of “goods” bought or manufactured and sold by businessmen; The difference between the selling price and cost price of goods is the gross result.

The term “consignment” means goods purchased for resale; It does not include property; If the sales proceeds exceed the cost of goods sold, then the gross profit made; If the amount sold is less than the cost of goods sold, a gross loss occurs.

After the Trading account, the Profit / Loss account can be prepared separately or they can be shown as an account in which Trading and Profit and Loss account is with two classes; The first part of this section which deals with the study of the result of trading transactions alone is known as a trading account. A trading account can define as an account that discloses the consequences of buying and selling goods.

Advantages of Trading Account in Accounting:

The following are the Major Benefits or Advantages below are;
- It shows the relationship between gross profit and gross loss, sales that help to measure profitability or losses position.
- The account shows the ratio between the cost of goods sold and gross profit.
- They give information about the efficiency of trading activities.
- They help to compare the cost of goods sold and gross profit.
- It provides information regarding stock and the cost of goods sold.
- The result of trading can know separately.
- The various items of this account of different periods can compare.
- The adjustment in the selling price can make by knowing the percentage of gross profit on net sales.
- Over-stocking/under-stocking can know to act wisely.
- If the gross loss discloses, the business can close immediately because the loss will further increase when the indirect and non-expenses add to it.
- The progress can study based on the gross profit ratio, year after year.
Disadvantages and limitations of Trading Account in Accounting:

The following are the Major limitations or disadvantages below are;
- It only defines the gross profit or gross loss, so this account can not result from net profits and net loss for the company; the company needs to make another account in accounting for net profits and net loss, it calls profit or loss account.
- Its report can not share with the company shareholder.
- They only mention direct expenses, not to indirect and non-expenses.
Needs & Importance of Trading Account in Accounting:

It is very important to want to know what is the gross profit or gross loss; for the company to also want to know whether purchasing goods, what manufacturing of goods and sales are sufficient for earning or not.

The following main needs and importance below are.
- It helps to know gross profit or loss.
- They provide information about direct expenses.
- They provide safety against possibilities of loss.
- It helps in comparison with closing stock with last year’s stock.
Trading Account: Meaning, Definition, Advantages, Disadvantages, Limitations, Needs & Importance, and Objectives; Image from Pixabay.

Objectives of preparing a Trading Account in Accounting:

What are the purpose or objectives of preparing a trading account in accounting for the business year? The profit or loss rated by trading accounts the gross result of the business but is not the net profit report. If so, then a question in mind why we need to prepare a trading account? So we got an answer; this account is necessary because we need to prepare a balance sheet for our company revenue and expense transaction; and, also need to know what gross & net profit.

First objectives:
- The gross profit of a business is very important data since all business expenses are met out of it. So the amount of gross profit should be adequate to meet the indirect or non-expenses of a company’s concern.
- The number of net sales can determine through this account. Gross sales can ascertain from the sales account in the ledger, but net sales cannot so obtain. The true sales of a business are net – not gross sales. Net sales determine by deducting sales returns from gross sales in the trading account.
- The success or failure of a company can fixate by comparing net sales of the current year with that of the last year. It should note that an increase in the number of total sales of the current year over the last year may not observe as a sign of success, since sales may increase because of rising in the price level.
- To Show Gross Profit and Loss; the Trading account determines gross profit and the gross loss of the business at the end of the period. For Net Purchase and Sales; the Trading account determines the amount of net purchase and sales during the accounting period. Cost of Good Sold; It calculates the cost of goods sold at the end of the period.
Second objectives:
- The percentage of gross profit on net sales (gross profit ratio) can easily determine from the trading accounts. This percentage is a very important yardstick for measuring the success or failure of a business. Compared to last year, if the rate increases, it indicates success; on the other hand, if the rate decreases, it is an indication of failure.
- The percentage of different items of buying expenses (direct expenses) on gross profit can easily determine and by comparing the percentage of the current year with that of the previous year the variations can be ascertained. An analysis of variances will disclose their cause which will help in controlling the number of expenses.
- Inventory or stock turnover ratio can analyze from the trading account in accounting. The success or failure of a company can measure by this determination. A higher rate indicates a favorable sign i.e. goods sold soon after their purchase. On the other hand, a low rate of signifies deterioration, i.e. goods sold long after their purchase.
- Fixation Of Price; They help to fix the selling price of the product by showing the relationship between sales and cost of goods sold. To Know Expenses; It helps to know the factory expenses. To Show Stock Position; They give detailed information about the stock position. The efficiency of Business; It helps to measure business efficiency by comparing sales and expenses.
October 5, 2020

Tag: Accounting

Here are the articles to explain, Modern Management Accounting Discuss, Definition, Role, techniques, and TQM!

Definition of Modern Management Accounting;

Role of management accounting;

Direct attention:

Keeping the score:

Solving the problems:

Comparison of Traditional and Modern management accounting;

Change in Global/ Organisational context and management accounting;

The measurement of costs:

The birth of “hybrid” accountants:

Open-book accounting:

Characteristics of manufacturing and service sectors;

Characteristics of service production.

Manufacturing Orientations in Service firms.

Service Orientations in Manufacturing Firms.

Characteristics of manufacturing production.

The conflict between manufacturing and service sectors.

Management accounting techniques:

Activity-Based Costing (ABC);

Just-In-Time (JIT):

Total Quality Management (TQM):

Here are the articles to explain, The distinction and difference between Standard Cost and Estimated Cost!

What is the standard cost?

What is the estimated cost?

The distinction and difference between Standard Cost Vs Estimated Cost;

Objective Difference:

Calculation Difference:

Computation Difference:

Aid to Management Difference:

Emphasis Difference:

Use Difference:

Accuracy Difference:

Accuracy and Reliability Difference:

Records Difference:

Revision Difference:

Stability Difference:

Barometer of Efficiency Difference:

Applicability Difference:

Here are the articles to explain, What is Standard Costing Accounting? Its Definition, Advantages, and Disadvantages!

Definition of Standard Costing;

Advantages of Standard Costing;

Formulation of Pricing and Production Policies;

Facilitates Delegation of Authority;

Facilitation of Principle of Management by Exception;

The yardstick for Comparison;

Optimum Use of Resources;

Uniform Valuation of Stock;

Facilitate Coordination;

Effective Cost Control;

Economy;

Motivates Employees;

Disadvantages or limitations of Standard Costing;

Difficulty in Fixing Standards;

Estimation of Price Difficult;

Apprehension of Output Change;

Out-Dated Standards;

Not Suitable for Small Concerns;

Costly for Non-Standard Product Industries;

Explanation of Variances Difficult;

Lack of Management’s Enthusiasm;

Administrative Inconvenience;

Resistance from Within;

Badly Designed System;

How do standard costs stand set?

Two approaches stand used for setting standard costs.

How does a standard costing system operate?

What is the main purpose of variance analysis?

What are the causes of labor, material, overhead, and sales margin variances?

Here are the articles to explain, Similarities and Differences between Financial and Managerial Accounting!

Similarities and Differences Part 01;

Similarities and Differences Part 02;

Similarities and Differences Part 03;

Similarities and Differences Part 04;

Here is the article to explain, How to define the Accounting Software Meaning Definition Features Classification!

Features and Characteristics of Accounting Software;

Accounting processing module;

Other things;

Report processing module;

Fixed assets accounting module;