Tag: Characteristics

Ledger Merchant Account: Meaning, Advantages, and Features
Ledger Merchant Account: The ledger system of double-entry bookkeeping includes the utilization of various record administered books (known as a bunch of books) to record exact data, in cash esteems, of every day exchanging activities of a business. Accounting essay present; Ledger Account is a diary where an organization keeps up the information of the relative multitude of exchanges and fiscal summary. The organization’s overall cartulary account coordinate under the overall cartulary with the monetary record grouped into various records like resources, Accounts receivable, creditor liability, investors, liabilities, values, incomes, charges, costs, benefit, misfortune, reserves, advances, bonds, stocks, compensations, compensation, and so forth.

Ledger Merchant Account: Meaning, Definition, Types, Features, Advantages, and Disadvantages.

Before understanding What ledger accounts are? Let us take a concise prologue to Ledger. Diary is utilized to record the exchanges sequentially. Yet, Journal just gives the impact of individual exchanges. The proprietor of a business, in any case, isn’t just keen on thinking about the impacts of individual exchanges on fiscal summaries yet also the gathered impact of each Account.

For instance, if he needs to know the aggregate sum of buys identifying with a specific bookkeeping period, at that point it will be a chaotic task to discover it from the Journal as it contains countless exchanges identifying with buys at better places as indicated by their particular dates of the event. In any case, he can without much of a stretch locate the number of all-out buys from the “Buys Account”. Subsequently, it requires that exchanges of a comparative sort should figure out and collected in one spot. This spot is a cartulary.

Meaning of Ledger Merchant Account:

What Does Accounting Ledger Mean? The notes or diary gives a total posting of the everyday exchanges of a business. Be that as it may, it doesn’t give data about a particular record in one spot. For instance, to realize how much money balance we have, the bookkeeping agent would need to check all the diary sections in which money includes, and this is an arduous work; because there are hundreds or even great many money exchanges recorded on various pages of the diary. To dodge this trouble, the charge and credit of journalized exchanges move to ledger accounts. Hence all the progressions for a solitary record are situated in one spot – in a cartulary account. This makes it simple to decide the current equilibrium of any record.

At the point when all the exchanges of a given period have been journalized, the following thing is to characterize them as per the records influenced. All comparative exchanges must unite. For example, all exchanges identifying with money must place in one spot. Likewise, all exchanges with a client or a provider must collect in one spot. The book in which this characterization do know as the ledger.

Definition of Ledger Merchant Account:

What is the Ledger in Business? The cartulary is a book that contains a consolidated and arranged record of the relative multitude of financial exchanges of the business by and large brought, moved, or posted from the books of unique section.

The cartulary knows as the ruler of all books of records since all sections from the books of unique passage must present on the different records in the ledger. It should notice that the diary contains a sequential record while the cartulary contains an ordered record, all things considered.

Kinds of Types of Ledger Merchant Account:

A cartulary is where all ledger accounts are kept up in a summed up manner. What are 3 different types of Ledger double entry? All records joined to make a cartulary book. A cartulary otherwise calls the chief book of records and it shapes a perpetual record of all business exchanges. Prevalently there are 3 unique types of the ledger – Sales, Purchase, and General ledger.

Sales Ledger or Debtor’s Ledger:

Deals or Sales Ledger is a cartulary where the organization keeps up the exchange of selling the items, administrations, or cost of merchandise offered to clients. This cartulary gives the possibility of deals with income and pays explanation. First among various sorts of ledgers is “Deals or Debtors’ ledger”.

It is a gathering of all records identified with clients to whom products have been sold using a loan (Credit Sales). The Sum of all the cash owed to a business by their clients appears here and name as Accounts Receivable, Trade Debtors, or Sundry Debtors. The records generally organize in sequential requests, be that as it may, these days all the cartulary accounts are kept up with the assistance of bookkeeping ERPs.

Purchase Ledger or Creditor’s Ledger:

Purchase or Buy Ledger is a cartulary where the organization puts together the exchange of buying the administrations, items, or products from different organizations. It gives the permeability of how much sum the organization paid to different organizations. It is a gathering of all records identified with vendors from whom products have been bought using a loan (Credit Purchases).

The Sum of all the cash owed by a business to their merchants is appeared here and name as Accounts Payable, Trade Creditors, or Sundry Creditors. The all-out money related sum inside the bought cartulary appears in the preliminary equilibrium and the asset report at its fitting spot.

General Ledger:

General Ledger isolates into two kinds – Nominal and Private Ledger. An ostensible cartulary gives data on costs, pay, deterioration, protection, and so on Also, a Private ledger gives private data like compensations, compensation, capitals, and so on Private ledger isn’t open to everybody. Organizations typically make a solitary general ledger which incorporates 2 extra subtypes of ledgers for example ostensible and private ledger.

These two might remember for the rundown for various sorts of ledgers in bookkeeping. An overall cartulary is a brought together gathering for all the cartulary records of a business. It contains a wide range of records which can find in an association; for example, resources, liabilities, capital or value, incomes, costs, and so forth

According to conventional or UK style bookkeeping; It comprises of all ostensible and genuine records important to plan financials for an organization. For example Building, Office hardware, Furniture, etc.
- Nominal Ledger: As the name recommends it contains all ostensible records for example cost, misfortunes, wages, and gains. Models – Salaries, Sales, Purchases, Returns Inward/Outward, Rent, Stationery, Insurance, Depreciation, and so on
- Private Ledger: They comprise records that are secret in nature, for example; capital, drawings, compensations, and so forth These records are just available by chosen people.
A few organizations do make separate general, ostensible, and private ledger.

Features or highlights or characteristics of Ledger Merchant Account:

The ledger has the following main characteristics or features:
- It has two indistinguishable sides – the left-hand side (charge side) and the right-hand side (credit side).
- The charge part of the relative multitude of exchanges record on the charge side; and, credit parts of the relative multitude of exchanges record on the credit side as per date.
- The contrast between the sums of the different sides speaks to adjust. The overabundance of the charge side over the credit side demonstrates charge balance; while an abundance of the credit side over the charge side shows the credit balance. On the off chance that the different sides are equivalent, there will be no equilibrium.
- For the most part, the equilibrium draws at the year-end; and, recorded on the lesser side to make the equivalent of the different side. This equilibrium knows as the end balance.
- The end equilibrium of the current year turns into the initial equilibrium of the following year.
Ledger Merchant Account: Meaning, Advantages, and Features; Image from Pixabay.

Merits or Benefits or Advantages of Ledger Merchant Account:

What are the advantages of Ledger double entry? Keeping up the ledger is an unquestionable requirement in each bookkeeping framework. It is important as will be obvious from its preferences.
- Exchanges identifying with a specific individual, thing, or heading of use or pay to assemble in the concern record in one spot.
- At the point when each record occasionally adjusts it mirrors the net situation of that account.
- Ledger is the venturing stone for getting ready Trial Balance – which tests the arithmetical exactness of the bookkeeping books.
- Since the sections recorded in the diary refer to in the cartulary the chance of mistakes of defalcations decreases to the base.
- Ledger is the objective of all sections made in diary or sub-diaries.
- Ledger is the “storage facility” of all data which consequently utilize for getting ready last records and fiscal summaries.
The accompanying focuses feature the best eight focal points of a ledger. The points of interest are:

The readiness of Trial Balance:

It is preposterous to expect to set up a Trial Balance without ledgers. Since a Trial Balance sees up by taking up the cartulary accounts balance. Besides, arithmetical precision is unimaginable.

Introducing Final Position:

We realize that the last record must see up from a Trial Balance (i.e., Trading Account, Profit and Loss Account, and Balance Sheet). In this way, on the off chance that we don’t get the cartulary accounts balance from a Trial Balance, we can’t plan last records.

Utilization of Double Entry System:

Twofold Entry System finishes just when we present the diaries on various cartulary accounts.

Deciding Results of Each Account:

The consequences of each record can get from the cartulary dependent on Double Entry standards.

Keeping up Classified Accounts Indirect Advantages:

The points of interest of grouped records might uncover in the wake of recording in the cartulary account appropriately.

Introducing Statistical Information:

The cartulary accounts with their separate adjust are the wellsprings of measurable data that utilize by the administration while dynamic.

Gathering Information:

The cartulary might know as the assortment or storeroom of different exchanges.

Present Financial Position:

The monetary situation of an endeavor (i.e., after setting up the last record) must know whether we keep up the cartulary account appropriately.

Demerits or Limitations or Disadvantages of Ledger Merchant Account:

As Merchant Account Keeping up the ledger is an unquestionable requirement in each bookkeeping framework. Its disadvantages will be obvious from its preferences;
- Ledger is dependent on the journal entry, they are not working independently. It is fully helpless without journal data.
- They are not opening entry while closing entry, and also they analyze from the fixed data record.
- Ledger is a system of double-entry bookkeeping; but, some data is both side columns belong as cash or bank or name is all depend on credit or debit entry.
November 25, 2020
Copy Book or Journal: Meaning, Advantages, and Futures
Copy Book or Journal: In Accounting Essay – The word journal has been gotten from the French word “Jour” Jour implies a day. Along these lines, the journal implies every day. Journal in records book names as the book of the original passage. It knows as the book of the original section since, in such a case that any monetary exchange happens, the bookkeeper of an organization would initially record the exchange in the Daybook. That is the reason a journal in bookkeeping is basic for anybody to comprehend. Regardless of what your identity is, an eventual bookkeeper, an account devotee, or an investor who might want to comprehend the characteristic exchanges of an organization, you have to realize how to pass a Daybook passage before whatever else.

Copy Book or Journal: Meaning, Definition, Types, Features or Characteristics, Advantages or Benefits, and Limitations or Disadvantages.

Exchanges record day by day in a Day book and thus it has named so. When an exchange happens its charge and credit perspectives are investigated and above all else, recorded sequentially (in the order of their event) in a book along with its short portrayal. This book knows as a Daybook. Thus we see that the main capacity of a journal is to show the connection between the two records associated with an exchange. This encourages the composition of a record. Since exchanges are first of all recorded in quite a while, so it knows as the book of original passage or prime section or essential passage or starter passage, or first passage. Accounting Essays;

Meaning and Definition of Copy Book or Journal:

Which means and definition of Journal; Journal is the book of an original section wherein, in the wake of adhering to the guidelines of charge and credit, all business exchanges record in sequential order. Hence, a Daybook implies a book that records all financial exchanges of a business on a regular schedule. The money-related exchanges record in sequential order i.e., in the order of their event.

As the recording of exchanges is done first in the journal, it likewise calls the book of original passage or a prime section. Journalizing characterizes as the way toward recording exchanges in the Daybook. In the wake of deciding the specific record to charge and credit, every exchange independently record.

A journal might characterize as the book of the original or prime section containing a sequential record of the exchanges from which presenting is done on the record. The exchanges record first in the Daybook in the order in which they happen. In the bookkeeping world, Journal alludes to a book wherein exchanges are logged for the absolute first time, and that is the reason it additionally calls as “Book of Original Entry”. In this book, all the ordinary business exchanges enter consecutively, for example, when they emerge.

From that point forward, the exchanges are presented on the Ledger, in the concerned records. At the point when the exchanges record in the journal, they call Journal Entries. According to the Double Entry System of Book Keeping, each exchange influences different sides, for example, charge and credit. Thus, the exchanges enter in the book according to the Golden Rules of Accounting, to realize which record is to charge and which one is to credit.

Types of Copy Book or Journal:

There are two types of the journal:

General Journal:

General Journal is one in which a small business entity records all the day to day business transactions

Special Journal:

In the case of big business houses, the journal classifies into different books called special Day books. Transactions record in these special Day books based on their nature. These books also know as subsidiary books. It includes cash book, purchase day book, sales day book, bills receivable book, bills payable book, return inward book, return outward book, and journal proper.

The Daybook proper uses for entering infrequent transactions such as opening entries, closing entries, and rectification entries.

Characteristics or Highlights or Features of Copy Book or Journal in Accounting:

The first step of the accounting process is to maintain a journal or journalizing of transactions. Journal has the following features:
- Journal is the main effective advance of the twofold section framework. An exchange records most importantly in the journal. So the Daybook knows as the book of the original section.
- An exchange record around the same time it happens. Along these lines, the journal calls Day Book.
- Exchanges record sequentially, So, the journal knows as an ordered book
- For every exchange, the names of the two concerned records demonstrating which charges and which credits, are obviously written in two back to back lines. This makes record posting simple. That is the reason the Day Book designates “Partner to Ledger” or “auxiliary book”
- The portrayal composes beneath every section.
- The sum writes in the last two segments – the charge sum in the charge section and the credit sum in the credit segment.
From the definitions and its recording procedures, the following features of the journal mark:

Book of essential passage:

The primary phase of the bookkeeping cycle is to keep up a Day Book. Exchanges first record in the Daybook. That is the reason the Day Book knows as the fundamental book of records.

Day by day record book:

Not long after the event and recognizable proof of exchanges, these record in the Day Book in sequential order of dates. Since exchanges record on the day co-event in the Day Book, it knows as a day by a daily record book.

Sequential order:

Everyday exchanges record in a Day Book in sequential order of dates. For this explanation, the Daybook likewise calls an order book of records.

Utilization of double parts of exchanges:

According to the standards of the twofold passage framework, each exchange records in a Daybook in double viewpoints, for example, charging one record and crediting the other record.

Utilization of clarification:

Journal passage of each exchange trails by clarification or portrayal since clarifications of sections fill the need for future reference.

Various segments:

Each page of the journal separates into five segments: Date, account titles and clarification, record folio, charge cash section, and credit cash segment.

An equivalent measure of cash:

For the journal section of every exchange, a similar measure of cash writes in charge of cash and credit cash segments.

Auxiliary book:

Journalizing the exchange helps the planning of the record helpfully. That is the reason the Day Book knows as an auxiliary book to the record.

Utilization of various journal books:

Journal implies a general daybook. Be that as it may, considering size-nature and volume of exchanges daybooks sub-separate into numerous classes. For instance; Purchase daybook deals daybook, buy return daybook, deals return daybook, money receipt Journal, money payment daybook dry daybook appropriate. The employments of the Day Book resolve thinking about the need of the organization.

Copy Book or Journal: Meaning, Advantages, and Futures; Image from Pixabay.

The Utility or Advantages or Benefits of the Copy Book or Journal:

The following advantages or benefits below are;

An essential book of the original section:

As the principal recording of exchange is done in the daybook, it knows as the book of the original section or prime passage. All business exchanges first discover a spot in quite a while and afterward, just the record in isolated record accounts.

A central book following the twofold passage bookkeeping:

In the wake of deciding the specific record to charge and credit, every exchange independently record. If we don’t open daybooks in an endeavor, the odds of keeping up books of records, according to the standards of the twofold section framework are far off.

Exchanges in sequential order:

All the exchanges record in the daybook in sequential order. In this way, the odds of discarding any exchanges in the books of records are dainty.

Complete information about business exchanges:

All journal passages support with brief portrayals. These portrayals help to comprehend the importance and motivation behind the exchange in future dates.

Grouping of all exchanges gets simpler:

All journal passages depend on vouchers and record in the journal as and when they happen. Thus, the exchanges are ordering immediately when they happen.

Aides in the division of labor:

In a huge business, a journal sub-separate into more than one. This sub-division assists with recording one sort of exchange in that book. For instance, deals book records just credit deals and buy book records just credit buys. These sub-journals took care of and constrained by various and separate people. In such cases, normally, that individual procures ability which causes the endeavor to accomplish its shared objective productively and adequately.

Guarantees arithmetical precision:

In the journal, the complete of the charge segment and credit segment should coordinate and concur. The difference is a speedy sign of the responsibility of certain errors, which can handily recognize and amended.

Limitations or disadvantages of Copy Book or Journal:

The following disadvantages or limitations below are;

Massive and voluminous:

Journal is the principal book of original passage which records all business exchanges. Now and again, it turns out to be so cumbersome and voluminous that it can’t be taken care of without any problem.

Information in the dispersed form:

In this book, all information records in routine and dispersed form; thus it is hard to find a specific exchange except if one recollects the date of the event of that exchange.

Tedious:

In contrast to posting from auxiliary books, posting the exchanges from daybook to record accounts take an excessive amount of time because each time one needs to post the exchanges in various record accounts.

Absence of interior control:

Dissimilar to different books of original sections like auxiliary books and money books, the daybook doesn’t encourage inner control, because the journal just exchanges record in sequential order. Be that as it may, auxiliary books and money book gives an away from of the unique sort of exchanges recorded in that.
November 24, 2020
Entrepreneurial Ecosystem: Meaning, Definition, and Features

Explore the concept of entrepreneurial ecosystems and their impact on business success and economic development globally. Entrepreneurial Ecosystem: The entrepreneurial ecosystem or environment is the accumulation of every one of those outer conditions and impacts, which influence the everyday routine of experiencing creatures and advancing business. A business venture can address holes in financial development, strength, and different proportions of prosperity in countries around the globe. However, moving from a needs-based business venture in the informal economy to opportunity-based firm creation can be intense; particularly in developing business sector economies. What’s more, the environment or ecosystem wherein a business visionary is working, legitimately and by implication, influences entrepreneurial achievement and effect.

Entrepreneurial Ecosystem understands by their Meaning, Definition, Features, and Areas.

What is an Entrepreneurial Ecosystem or Environment (In Hindi)? The entrepreneurial ecosystem characterizes as a network that makes different factors free from one another; which collaborates with themselves in a geological region and advance. The intention is to advance the making of new organizations.

As references before, the Entrepreneurial Ecosystem is a mix of social, monetary, social, and political segments inside a district. Further, an improved Entrepreneurial Ecosystem makes with the assistance of different components to support; and, create which is useful to develop the business new companies that are being started.

Likewise, recently entered Entrepreneurs are enlivened to accept the danger just as start looking for some financing for their recently evolved ventures. Inside the neighborhood environment of businesspeople; every one of these substances connects and making their performance formally just as informally. Hence, the whole framework can work together; and, the communication between these subsystems must be done in a way that can achieve the rationale.

Meaning of Entrepreneurial Ecosystem or Environment:

Which means of Entrepreneurial Ecosystem or Environment; Encouraging business is presently the core competency of financial improvement in different city’s around the globe. The entrepreneurial ecosystem makes of different partners who are from the private and public areas. They additionally involve individual and aggregate partners and strategies quantify that correctly characterize and receive to improve their enunciation, activity, and advancement.

The essential goal here is to advance business venture, make the monetary turn of events, and upgrade esteem creation. There are various ways to deal with characterizing ecosystems: high human resources capability, favorable culture, open business sectors, monetary framework, administration and strategy measures, and so on.

Definition of Entrepreneurial Ecosystem or Environment:

Entrepreneurial success, as well as impact, directly or indirectly gives effect by the environment or ecosystem in which it is operating its own build company or business. Their definitions below are;

According to Mason & Brown;

“The entrepreneurial ecosystem is a set of different individuals who can be potential or existing entrepreneurs, organizations that support entrepreneurship that can be businesses, venture capitalist, business angels, and banks, as well as institutions like universities, public sector agencies, and the entrepreneurial processes that occur inside the ecosystem such as the business birth rate, the number of high potential growth firms, the serial entrepreneurs and their entrepreneurial ambition.”

According to Stam & Spigel;

“The entrepreneurial ecosystem improvement created by the different elements generates support to develop and help to grow the startups that are building up. As well, new entrepreneurs encourage to risk and start looking for funding for their projects.”

The entrepreneurial ecosystem or environment defines as a community that makes multiple factors independent from each other; which interact with themselves in a geographical area and evolve. The purpose is to promote the creation of new businesses.

Characteristics or Attributes or Features of an Entrepreneurial Ecosystem or Environment:

As we as a whole know, the Entrepreneurship Ecosystem greatly affects the development of the business and makes it simple to make some finance from different foundations. All these super-adventure social orders are useful and help a venture to encourage their business and work with some open just as private sector pioneers over countless districts and countries over the world.

Therefore, let us get a fresh start of the Entrepreneurial Ecosystem and examine a portion of the attributes that give a superior comprehension of the entire idea immediately. Let us investigate these beneath.

Contains or comprises six individual areas:

Several components are important for the Entrepreneurial Ecosystem which isolates into six general areas. It incorporates culture, permitting approaches and authority, a fitting measure of account accessibility, nature of human resources, markets dependent on adventures for items; and, a wide scope of institutional just as infrastructural help.

A helpful culture, accessibility of account, empowering administration and approaches, human resources, showcases that are adventure amicable for items, and different sorts of support. It is fundamental to comprehend that each business ecosystem is exceptional. Albeit all these six spaces can utilize to depict it, each ecosystem is the aftereffect of various factors collaborating in quirky manners. Therefore, having basic spaces doesn’t really imply that all the ecosystems are equivalent.

Every Ecosystem is exceptional:

With the assistance of these six areas, we will get a portrayal of the Entrepreneurial Ecosystem and comprises six standard spaces yet these areas contain a few quantities of segments that have an elevated level of intricacy and singularity. To represent, in the year the 1970s, the Entrepreneurial Ecosystem of Israel created with no characteristic assets, military basics, and a long way from the significant market of their items.

Moreover, the ecosystem of Ireland developed with free training, worldwide multinationals, local English; and the European market’s vicinity in the year 1970s. On the off chance that discussing the Entrepreneurial Ecosystem of China, at that point, it is creating with regards to different strategies dependent on areas and an extremist political framework.

Variety in the entrepreneurial ecosystem:

Variety is an essential piece of advancement. Different data sources are required for the business venture from different individuals who start organizations. The culture requires, which supports various networks and various ventures with various thoughts. At the point when different portfolio speculation happens, it must appear to perform the best.

Lawful Framework:

Factors, for example, schooling, capital business sectors, regulatory and legitimate framework sway business venture for quite a while. In any case, even though these factors sway for quite a while, they are powerless. At the point when numerous factors work together, critical changes happen in a business venture, which sees now and again.

It takes a couple of distinctive individuals to cause a huge change. Therefore, while it is useful to survey every business ecosystem, small mining conventional parts are not helpful.

The ability which encourages the organizations to develop:

A large portion of the entrepreneurial ecosystem is ability magnets. They require drawing in, holding, and reliably developing ability in their organization. This likewise incorporates business visionaries and possible managers. There are considerable cross-linkages between colleges, schools, and the private sector. This is fundamentally done with the goal that the gracefully and interest for ability are overseen effectively.

Ability is fundamental in developing the business, and what’s more important is to hold it. The commercial center is developing quickly, and fast improvement is occurring all over. Organizations who were never into advanced advertising are currently searching for content scholars; and, web-based media supervisors after COVID-19 (Coronavirus disease). In such cases, holding existing ability ends up being more affordable than getting new ability.

Information and assets to help business visionaries:

There are different information and assets which are needed by business visionaries. It might incorporate fundamental inquiries like how to get my export permit to major methodology changes and the executive’s changes.

When there is a flourishing ecosystem, it winds up profiting the business visionaries. There are different assets required by business visionaries like capital, gifted individuals, space for office, and other expert administrations. In an ideal entrepreneurial ecosystem, these are richly accessible.

Entrances and convergences:

Entrances develop networks by getting more ability. They cultivate variety and permit various cooperations, which lead to novel thoughts. At the point when solid ecosystems are noticeable and have well-coming entrances, they make the ecosystem simple to get to. This is valid for anybody regardless of their experience or experience. At the point when thoughts, individuals, and assets blend, it causes convergences that help the business people locate the missing bits of the riddle.

Good fortune is to design in the ecosystems so impacts can occur, which can assist with taking care of issues. These crossing points can be foundations, for example, cafés or occasions, for example, pitch rivalries or meetups. Nowadays online crossing points are filling in prominence by a leeway channel or Twitter hashtag. This empowers business people to impart and meet a virtual network.

A collaboration which brings about brilliant social capital:

Ecosystems flourish because of different societies. An ecosystem’s way of life is wealthy in social capital, social trust, and different factors that encourage coordination and participation among the individuals of the entrepreneurial ecosystem. An ecosystem that doesn’t have an appropriate culture doesn’t develop or motivate individuals to move rapidly.

It is likewise not open to clever thoughts and causes one another, subsequent in an undesirable ecosystem. The people group culture requires to sustain and develop so it prompts great qualities in the ecosystem. This happens when individuals take part in the way of life and normally get adjusted to it.

Entrepreneurial ecosystems are generally self-continuing:

This happens because achievement brings and breeds achievement. The six spaces referenced above ought to improve in the ecosystem, and there comes a tipping moment that the administration association ought to decrease yet not dispensed with.

When the entirety of the areas are solid, at that point they commonly increment and improve. In such cases, public pioneers don’t put resources into them a great deal. Ordinarily, business venture programs are intended to act naturally exchanging so they can zero in on having an economical environment.

Social-financial environment:

The entrepreneurial ecosystem additionally considers a social-monetary environment that shapes and cultivates business ventures locally and territorially. It does as such by thinking about it as a monetary advancement technique.

At the point when this framework utilizes, the center is to create an area and worth expansion and worth creation. Many vital participants adjust to the entrepreneurial attitude and related exercises. It is typically an aggregate system used to learn by utilizing the way to deal with creative opportunities and resources.

Key areas of the Entrepreneurial Ecosystem or Environment:

On this planet, everything is a piece of an ecosystem, for example, the watershed, the creepy crawlies, the trees, the grass, and the business that is running or out and about of development. With the development of your business, the expression “Entrepreneurial Ecosystem” suits best with it and it has six major spaces. A lot of models for the Ecosystem are there however we just think about these six as an establishment and here, we will improve comprehension of these areas.

The six spaces incorporate arrangement, culture, supports, human resources, account, and markets. Every one of these spaces shows that there is a change from customary financial intuition to a creative and new monetary individuals’ view, networks, just as establishments. Cooperation between these spaces of the ecosystem is additionally a sort of Entrepreneurial movement. This result views as the cycle in which the individual transforms the opportunities into innovativeness and development. One small step at a time, another incentive to the general public gives through the improvement of new items and administrations.

Along these lines, let us start with the six major areas of the Entrepreneurial Ecosystem that should remember while working any kind of business.

Strategy Area:

Over the different regions of the world, the mainstays of government guidelines assort, and each approach of the public authority can liven up or downsize the capacities to begin, and the development of the business. Under this area, it has different components, for example, the simple advance to begin a business, motivation on assessments, and laws that could be cordial with the business.

As like that, this space likewise incorporates the actual structure, where there is admittance to the foundation, transport just as media transmission that additionally influences the organizations according to the World Economic Forum.

Account Area:

For a wide range of organizations, it is successful and profitable to have monetary stores as they can keep up development by getting more assets. A vital part of any business is the money related assets as it offers help to name individuals and to buy just as rental properties just as instruments and make interests in promoting and deals, and monitor clients.

The money related choices that are accessible with the startup of organizations likewise started with kinfolk and kith, investors, funding, private value, and obligation access. There is a positive connection between the progression of account and business development according to the World Economic Forum.

Culture Area:

It has been contended that gazing social support needs for an undertaking to build up an arising Entrepreneurial ecosystem. The resistance of danger and disappointment inside an undertaking, priority given to independent work, development festivity, examples of overcoming adversity, research societies, and good examples are the viewpoints that are consistent of enormous importance in social support as clarified by the World Economic Forum. All these make a social area.

Support Area:

An assortment of particular, establishments, just as organizations, helps the business to make and grow also. A few actors that included are mentors, specialists, experts, for example, bookkeeping, incubators, accelerators, HR, etc. (Clarified by World Economic Forum)

Human Resources Area:

The quality and the amount of the workforce are the human resources area. Because of the aptitudes and capacities that individuals have, the working environment makes accordingly. There are a few components of this space, for example, specialized and the board’s ability, the experience of an entrepreneurial organization, migrant workforce access, and the accessibility of re-appropriating. A mix of such parts influences the development of the business. Inside the space of human resources, instruction and preparation thought of.

Market Area:

The portrayal of the buyer’s readiness to purchase items just as administrations of an organization shows by the market area. Further, the capability of the shoppers considers as a key angle and there are some different parts of the market space like the public and worldwide market, little, enormous, and medium-sized organizations that are imperative to arrive at the business and develop over an area.

November 13, 2020
Activity Based Costing: Meaning, Features, and Advantages
What is ABC (activity based costing)? It is the collection of financial, operational, performance information tracing the significant activities of the firm to product costs in production management. In other words, the knowledge of find out estimates costs of production for product costs.

What does mean ABC (activity based costing)? Meaning, Definition, Features or characteristics, advantages, and disadvantages.

Activity-based costing (ABC) is a new term develop for finding out the cost. The basic feature of ABC is its focus on activities as the fundamental cost objects. It uses activities as the basis for calculating the costs of products and services. The Activity-Based Costing (ABC) is a costing system, which focuses on activities performed to produce products. ABC is the costing in which costs first trace to activities and then to products. This costing system assumes that activities are responsible for the incurrence of costs and create the demands for activities.

For example, an online learning firm prepares tax returns; suppose Udemy teaches online students. Fees charge to products based on individual product’s use of each activity. In the traditional absorption costing system, fees first trace not to activities but an organizational unit, such as a department or plant and then to products. It means under both, ABC and traditional absorption costing system the second and final stage consists of tracing fees to the course.

Activity Based Costing: Meaning, Features, and Advantages; Image from Pixabay.

Definition of ABC (activity based costing):

What is the ABC (activity based costing) definition? The following ABC definitions below;

According to CIMA as;

“Cost attribution to cost units on the basis of the benefit received from indirect activities e.g. ordering, setting up, assuring quality.”

According to CAM-1 organization of Arlinton Texas as;

“The collection of financial and operational performance information tracing the significant activities of the firm to product Costs.”

It bases on the belief that in the production process various activities give rise to costs. Generally, Activity Based Costing (ABC) defines as an accounting technique that allows an organization to determine the actual cost associated with each product and service produced by the organization without regard to the organizational structure. Amongst various benefits associated with the ABC approach, one of the major ones is that it helps to define the activities of the organization in terms of value-adding activities.

Features or Highlights or Characteristics of ABC (activity based costing):

What are the ABC (activity based costing) features or highlights or characteristics? The following ABC features below;
1. The simple traditional distinction made between fixed cost and variable cost is not enough to guide to provide quality information to design a cost system.
2. It is a two-stage product costing method that first assigns costs to activities and then allocates them to products based on each product’s consumption of activities.
3. They can use by any organization that wants a better understanding of the costs of the goods and services it provides, including manufacturing, service, and even non- profit organizations.
4. The cost pools in the two-stage approach now accumulate activity-related costs.
5. An activity is any discrete task that an organization undertakes to make or deliver a product or service.
6. It bases on the concept that products consume activities and activities to consume resources.
7. The more appropriate distinction between cost behavior patterns is scale related, scope related, decisions related, and time-related. In other words, cost behavior is all performance-related product costs.
8. Cost drivers need to identify. A cost driver is a structural determinant of cost-related activity. The logic behind this is that cost drivers dictate the cost behavior pattern. In tracing overhead cost to the product, a cost behavior pattern must understand so that appropriate cost drivers could identify.
ABC cost method is activity-based cost management:

What is activity-based cost management? Cost management is an accounting method that calculates material costs, labor costs, management costs, financial costs, etc. according to certain standards by the current accounting system.

This management approach sometimes fails to reflect the direct link between the activities undertaken and costs. Also, the ABC cost method is equivalent to a filter. It readjusts the original cost method so that people can see the direct connection between the cost consumption and the work they engage in so that people can analyze which cost inputs are effective. Which cost inputs are invalid.

The ABC (activity based costing) cost method mainly focuses on the production and operation process, strengthens operation management, focuses on specific activities and corresponding costs, and strengthens activity-based cost management.

Benefits or Merits or Advantages of ABC (activity based costing):

What are the ABC (activity based costing) benefits or merits or advantages? The following ABC advantages below;

Actual and accurate product costs:

ABC brings actual, accuracy, and reliability in product costs determination by focusing on cause and effect relationships in the incurrence of the cost. It recognizes that it is activities which cause producing costs, not products and it is a product which consumes activities. In advanced manufacturing environment and technology where support functions over-heads constitute a large share of total or overall costs, ABC provides more realistic product costs. It produces reliable and correct product cost data in case of greater diversity among the products manufactured such as low-volume products, high-volume products.

Knowledge and information regarding Cost Behavior:

It identifies the real nature of cost behavior and helps in reducing costs and identifying activities that do not add value to the product, in other words producing costs. With ABC, managers can control many fixed overhead costs by exercising more control over the activities which have caused these fixed overhead costs. This is possible since the behavior of many fixed overhead costs about activities now becomes more visible and clear.

Tracing of Activities for the Cost Object:

ABC uses multiple cost drivers, many of which transaction-based rather than product volume. Further, ABC concern with all activities within and beyond the factory to trace more overheads to the products.

Tracing of Overhead Costs:

ABC traces costs to areas of managerial responsibility, processes, customers, departments besides the product costs. Costs tracing, accurate allocation of costs to various products lead to proper pricing policy. Also, Cost driver rates can use advantageously for the design of new products or existing products as they indicate overhead costs that are likely to apply in costing the product.

Analysis and mentions of Non-manufacturing Costs:

Some costs term as non-manufacturing costs; for example, product promotion or advertisement. Even though, advertising is a non-manufacturing cost which constitutes a major portion of the total cost of any product. These non-manufacturing costs can be easily allocated since the relationship between costs; and, their causes can properly understand by using ABC.

Limitations or Demerits or Disadvantages of ABC (activity based costing):

What are the ABC (activity based costing) limitations or demerits or disadvantages? The following ABC disadvantages below;

Service costs are High:

Implementing an ABC system requires substantial resources, which is costly to maintain.

Report or data collection problem:

It is a complex system which needs a lot of record for calculations.

Non-useable for small organizations:

In small organizations, the CEO or owner or managers accustom to using traditional costing systems to run their operations and traditional costing systems often use in performance evaluations. Some companies are producing only one product or a few products; so, the ABC cannot apply in there.

Activation or selection problem:

Some difficulties emerge in the implementation of the ABC system; such as the selection of cost drivers, assignment of common costs, varying cost driver rates, etc.

Different timeline of terms:

Since there are a lot of steps and groundwork required to come out with a costing based on this system, it is quite a time to consume. For example, large companies for the best costing system they produce the large size of production and give many products to us, but small or single handle company produces and give a single product. So, the large or multinational company collects many records and ABC work easy for long-term periods, as well as small organizations for difficult in short-term periods.
May 2, 2020
Audit Risk: Meaning, Characteristics, and Elements
What is Audit Risk? It refers to the risk that the auditor expresses an inappropriate audit opinion on the financial statements containing important errors. This article explains about Audit Risk with its Meaning, Characteristics, and Elements. In simple terms, it is the risk that an auditor will issue an unqualified opinion when the financial statements contain material misstatement. As well as, it is the risk that financial statements are materially incorrect, even though the audit opinion states that the financial reports are free of any material misstatements.

Here are explain Audit Risk and its Meaning, Definition, Characteristics, and Elements.

One is that the certified public accountants believe that the fair financial statements are wrong, that is, the verified financial statements do not reflect the changes in the financial status, operating results and financial status of the audited unit by the requirements of accounting standards Or it may indicate that there are important errors in the audited unit or the scope of the review, which may not notice by the CPA;

The second is the wrong accounting statement that the certified public accountant thinks, but in fact, it is fair. It includes inherent risks, control risks, and inspection risks. Due to the increasingly complex environment of auditing, the tasks facing auditing are becoming more and more arduous; auditing also needs to support the principle of cost-effectiveness. The existence of these reasons determines the existence of audit risks in the audit process. This objectively requires certified public accountants to pay attention to the possibility of risks and take corresponding measures to avoid and control risks as much as possible.

ISA 200 states that auditors should plan and perform the audit to reduce audit risk to an acceptably low level that is consistent with the objective of an audit. (Auditing and Assurance Standard) AAS-6(Revised), “Risk Assessments and Internal Controls”, identifies the three components of audit risk i.e. inherent risk, control risk, and detection risk.

Definition of Audit Risk:

The following definition below are;

It is the risk that an auditor expresses an inappropriate opinion on financial statements.

According to Wikipedia;

“Audit risk (also referred to as residual risk) refers to the risk that an auditor may issue an unqualified report due to the auditor’s failure to detect material misstatement either due to error or fraud.”

As the definition explains It is the risk that auditors issued the incorrect audit opinion to the audited financial statements. For example, auditors issued an unqualified opinion to the audited financial statements even though the financial statements are materially misstated. In other words, the material misstatements of financial statements fail to identify or detect my auditors.

Characteristics of Audit Risk:

The nature of audit risk always shows certain characteristics or features. After discussing the connotation of audit risk; we should continue to elaborate on the characteristics of audit risk; and, explain the unique performance under our socialist market economy.

The details are as follows;

Universality:

Although the audit risk manifests by the deviation from the final audit conclusion and expectations; this deviation caused by many factors, and every link of the audit activity may lead to the generation of risk factors. Therefore, there are audit risks that are suitable for any kind of audit activity, and will ultimately affect the total audit risk.

Objectivity:

A significant feature of modern auditing is the method of sampling auditing, which is to infer the characteristics of the population based on the characteristics of a part of the sample in the population, and the characteristics of the sample are more or less in error from the characteristics of the population. But generally difficult to eliminate.

Therefore, whether it is statistical sampling or judgment sampling, if the population infers based on the sample review results, there will always be a certain degree of error, that is, the auditor must bear a certain degree of risk of making a wrong audit conclusion. Even in the case of detailed audits, due to the complexity of economic operations and the moral quality of managers, there are still cases where the audit results are inconsistent with objective reality.

Potential:

The existence of audit responsibility is a basic factor in the formation of audit risk. If the auditors are not subject to any constraints in practice and do not bear any responsibility for their work results, they will not form audit risk, which determines the audit risk for a certain period. Potential, If the auditor deviates from the objective facts, but does not cause undesirable consequences and does not cause the corresponding audit responsibility, then this risk only stays at the potential stage, and does not translate into real risk.

Contingency:

It is due to some objective reasons, or subjective reasons that the auditors are not aware of, that is, the auditors did not deliberately act; the auditors unintentionally accepted the audit risk, and inadvertently assumed the seriousness of the audit risk. As a result, It is very important to affirm that the audit risk is unintentional; because only under this premise, the auditors will try to avoid reducing the audit risk, and the control of the audit risk is meaningful.

Controllability:

Auditing has long been familiar with taking responsibility for the correctness of its reports. However, the guiding ideology of modern auditing has further evolved from system-based auditing to risk auditing. The audit profession has not been tied up by more and more audit risks. Instead of losing its vitality, it gradually develops in the direction of actively controlling audit risks. It is of great significance to correctly understand the controllability of audit risk.

On the one hand, we need not afraid of audit risk. Although the responsibility of auditors will lead to audit risk, once it occurs, its possible impact on the audit profession is also significant; but we can By identifying areas of risk and taking appropriate measures to avoid them; there is no need to dare to accept customers because of the existence of risks.

Audit Risk Model:

Audit Risk = Inherent Risk * Control Risk * Detection Risk

It may consider as the product of the various risks which may encounter in the performance of the audit. To keep the overall audit risk of engagements below the acceptable limit; the auditor must assess the level of risk about each component of audit risk. Above these risks of model define three elements or types of audit risks below you’ll understand.

Audit Risk: Meaning, Characteristics, and Elements, Image from Pixabay.

Elements of Audit Risk:

The following detail of elements or types of audit risk below are;

Inherent risk:

What is Inherent risk? Inherent risk is generally considered to be higher where a high degree of judgment; and, estimation is involved or where transactions of the entity are highly complex. They refer to the possibility of a material misstatement in a certain statement on the financial statements without considering the internal control policies or procedures of the audited entity. It is the risk inherent in the business, whether or not internal control exists. It exists independently of the audit of accounting statements and is a risk that CPAs cannot change their actual level.

For example, the inherent risk in the audit of a newly formed financial institution that has significant trade and exposure in complex derivative instruments may be considered to be significantly higher as compared to the audit of a well-established manufacturing concern operating in a relatively stable competitive environment.

Characteristics of inherent risks:

The inherent risks have the following characteristics:
- The inherent risk level depends on the sensitivity of accounting statements to errors and frauds in business processing. The more false reports in the business process, the more false the report, the greater the inherent risk, and the lower the inherent risk. The greater the possibility of problems in economic business, the higher the inherent risk level; otherwise, the smaller. That is to say, for different businesses, the inherent risk level is also different;
- The generation of inherent risks related to the audited unit, but not to the certified public accountant. Accountants cannot reduce inherent risks through their work, but can only analyze and judge the inherent risk level through necessary audit procedures;
- The inherent risk level indirectly affects the external operating environment of the audited unit. Changes in the external operating environment of the audited unit will cause an increase in inherent risks. For example, due to the advancement of technology, some products of the audited unit will become obsolete; which brings the risk of whether the inventory valuation is correct;
- Inherent risks exist independently in the audit process and objectively exist in the audit process, and are relatively independent risks. The magnitude of this level of risk needs to certify by certified public accountants.
Control risk:

What is Control risk? Control Risk is the risk of a material misstatement in the financial statements arising due to absence or failure in the operation of relevant controls of the entity. It refers to the possibility that the internal control of the audited unit fails to prevent or discover a certain misstatement or omission in its accounting statements in time. As with inherent risks, auditors can only assess their level and cannot affect or reduce its size.

Control risk or internal control risk is the risk that current internal control could not detect or fail to protect significant error or misstatement in the financial statements. Assessment of control risk may be higher for example in case of a small-sized entity in which segregation of duties is not well defined; and, the financial statements are prepared by individuals who do not have the necessary technical knowledge of accounting and finance.

Characteristics of Control risk:

The control risk has the following characteristics:
- The level of control risk is related to the level of control of the audited unit. If the internal control system of the audited unit has important defects or cannot work effectively; then the mistakes will enter the financial reporting system of the audited unit, resulting in control risks;
- The control of risks has nothing to do with the work of certified public accountants. As with inherent risks, certified public accountants cannot reduce control risks; but certified public accountants can set a certain level of control risk based on the soundness and effectiveness of the internal control of the relevant part of the audited unit;
- Controlling risk is an independent risk in the audit process. Control risk exists independently in the audit process. This risk has nothing to do with the inherent risk. It is a function of the effectiveness of the internal control system or degree of the audited unit. Effective internal control will reduce control risk, while ineffective internal control will increase control risk. Since the internal control system cannot fully guarantee the prevention or discovery of all errors and deficiencies, the control risk cannot be zero; and, it will inevitably affect the final its risk.
Detection risk:

What is Detection risk or Inspection risk? Detection Risk is the risk that the auditors fail to detect a material misstatement in the financial statements. It refers to the possibility that a certified public accountant fails to discover a major misstatement or omission in the audited unit ’s accounting statements through a predetermined audit degree. Inspection risk is the only risk element that can control and manage by certified public accountants.

Well, detection risk is the risk that auditor fails to detect the material misstatement in the financial statements and then issued an incorrect opinion to the audited financial statements. Some detection risk is always present due to the inherent limitations of the audit; such as the use of sampling for the selection of transactions.

Characteristics of Detection risk:

The detection risk has the following characteristics are:
- It exists independently in the entire audit process. Not affected by inherent risks and control risks.
- The inspection risks are directly related to the work of certified public accountants. It is a function of the effectiveness of audit procedures and the effectiveness of certified public accountants in using audit procedures. Its actual level is related to the work of certified public accountants. It directly affects the final risk. In practice, certified public accountants reduce the inspection risk by collecting sufficient evidence to keep the total audit risk at an acceptable level. The level of inspection risk and the importance level together determine the nature, time, and scope of the substantive tests that the auditor needs to perform and the amount of evidence required to be collected.
April 28, 2020
Corporate Banking: Meaning Characteristics Importance Advantages
What is Corporate Banking? Corporate banking is a significant division of commercial banks. This is a relatively new concept that has been adopted by many banks. This article explains Corporate Banking with its topic of Meaning, Definition, Characteristics, Bank list, Difference, Importance, and Advantages. Corporate banking is a subset of business banking that involves a range of banking services that offer only to corporates. The services include the provision of credit, cash management facilities, etc. Many business owners may go as far as using a different bank for their corporate account to ensure funds are not being muddled up. Furthermore, most companies require that you open a corporate account for the value proposition of your business to become valid.

Here are explain Corporate Banking: Meaning, Definition, Characteristics, Bank list, Difference, Importance, and Advantages.

Corporate banking also refers to business banking that identifies with the items and services that include loaning or credits between the bank and the bank’s client. The corporate banking segment of banks typically serves a diverse clientele, ranging from small-to-mid-sized local businesses with a few million in revenues to large conglomerates with billions in sales and offices across the country.

Definition of Corporate Banking:

By ICICI Bank, “They offer corporates a wide range of products and services, the technologies to leverage them anytime, anywhere and the expertise to customize them to client-specific requirements. From cash management to corporate finance, from forex to acquisition financing; they provide you with end-to-end services for all your banking needs.”

According to my accounting course as;

“Corporate banking is the tailor-made financial services that financial institutions offer to corporations in the context of corporate financing and raise capital.”

What is the definition of corporate banking? Typically, corporate banking is a specialized division of a commercial bank that offers various banking solutions; such as credit management, asset management, cash management, and underwriting to large corporations as well as to small and medium-sized enterprises (SMEs). Corporate banks might be offering similar services to retail banks; however, the major distinction is the clientele and the amount of money and profit involved.

Characteristics of Corporate Banking:

The following characteristics of corporate banking below are;
1. Clientele or Customer: A bank’s business banking unit usually serves small to middle-sized businesses and large conglomerates.
2. Authority: A company’s corporate banking accounts can only be opened after obtaining consensus from the board of directors of the company. It means that they must authorize by an official vote or a corporate resolution. As well as, the company’s treasurer usually opens corporate accounts.
3. Liability: Since companies are recognized as separate legal entities under the law, all contents of corporate accounts are the property of the company and not of the individual board members. It means that there is a certain degree of independence in corporate accounts. It also indicates that the personal creditors of the board of directors are not entitled to the contents of the corporate account of a company.
4. Credit rating: The conduct or functioning of the corporate account forms part of the credit history of the company. It affects the valuation and share prices of the company, the interest rates applicable to loans extended to the company, etc.
5. Bankers: Corporate banking requires a degree of expertise in the industry. Thus, corporate bankers are extremely well paid. JP Morgan Chase, Bank of America Merrill Lynch, and Goldman Sachs are some of the largest commercial banks in the world.
Bank list for Commercial and Corporate Banking in India:

The following bank list by NSDL below are;

Bank Name (A-Z): Allahabad Bank, Andhra Bank, Axis Bank, Bank of Bahrain and Kuwait, Bank of Baroda – Corporate Banking, Bank of Baroda – Retail Banking, Bank of India, Bank of Maharashtra, Canara Bank, Central Bank of India, City Union Bank, Corporation Bank, Deutsche Bank, Development Credit Bank, Dhanlaxmi Bank, Federal Bank, ICICI Bank, IDBI Bank, Indian Bank, Indian Overseas Bank, IndusInd Bank, ING Vysya Bank, Jammu & Kashmir Bank, Karnataka Bank Ltd, Karur Vysya Bank, Kotak Bank, Laxmi Vilas Bank, Oriental Bank of Commerce, Punjab National Bank – Corporate Banking, Punjab National Bank – Retail Banking, Punjab & Sind Bank, Shamrao Vitthal Co-operative Bank, South Indian Bank, State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of India, State Bank of Mysore, State Bank of Patiala, State Bank of Travancore, Syndicate Bank, Tamilnad Mercantile Bank Ltd., UCO Bank, Union Bank of India, United Bank of India, Vijaya Bank, and Yes Bank Ltd…

The Difference Between Retail Banking And Corporate Banking:

Retail Banking and Corporate Banking make up the two very essential components of the field of finance. While retail banking mainly deals with individual customers, corporate banking focuses more on the corporate world. Apart from these, there are quite a few other differences between the two that will highlight in this article. The following difference between Retail and Corporate Banking provided and referenced by medium.com below are;

Very popularly known as consumer banking or personal banking, retail banking consider the more visible face of banking to the general public. The most vibrant character of this branch is the presence of numerous bank branches all over the major cities. Usually, there is no, one specific bank which only focuses on catering to the needs of the general public, usually, banks have branches that specialize in this field. Whereas on the other hand, corporate banking stands very popularly known as, business banking. It is meant to highlight that aspect of banking, which solely deals with corporate customers. This type of banking is popularly known to be the key profit center, for most banks in the USA as well as other nations.

In terms of products and services, both branches differ widely. While on one hand, retail banking offers several services like checking and savings accounts, certificates of deposit and Guaranteed Investment Certificates, Mortgages on residential as well as investment properties, automobile financing, credit cards, lines of credit, foreign currency, and remittance services. Apart from these services, there are a few more targeted services, that stand generally offered through another division; or, an affiliate of the bank, stock brokerage, Insurance, Wealth Management, Private Banking, and so on.

Continually;

On the other hand, the corporate banking segment of the banking sector usually says to deal with clients on a varied scale. Here the clients usually range from small to mid-sized local business firms, to huge conglomerates with billions in sales. It is the commercial banks, which usually offer a range of corporate banking products and services like loans and other credit products, which is by far the biggest area of business for corporate banks. Other services include treasury and cash management services, equipment lending, treasury and cash management, commercial real estate, trade finance, employer services, and so on.

While these two branches may have their differences, they are equally important for the economy, both on a domestic as well as a global level. Retail Banking usually is responsible for bringing in, large customer deposits, that enable banks to make loans to their retail and business customers. Whereas on the other hand, it is the commercial banks, which help in making the loans to enable businesses to grow as well as hire more people, thus in a way contributing to the economy of any particular country. Despite their differences, both of these fields stand highly preferred as career options, by several finance aspirants. To get their dream career and jobs, a lot of candidates go a step ahead and seek to get industry-relevant education, by opting for several certification programs, offered by Imarticus Learning.

Need and Importance of Corporate Banking:

The following need and importance of corporate banking below are;

Safe Accounting:

As a start-up, it is vital to account for every naira to effectively help you track your business activities and analyze what expenses to cut down on, what areas need more investing; what revenue stream yields the highest income, and so on. It is also important to keep all invoices and receipts, to account for every business transaction carried out using the corporate account.

Professionalism:

How your business funds manage, directly impacts the corporate image of your company. If you are writing a check to a supplier or receiving money from a customer, checks or deposits need to address to your business name. What is the IT Professionalism in Information Technology Essay? Additionally, it will be a hassle managing the inflow or outflow of cash; if your business and personal finances do not keep separate.

Managing Expansion:

With a business account, you may choose to allocate money to pay employees as your staff increases in size. You can also use your corporate account to partner with other businesses, or use it for mass payments. Whatever the case is, it is convenient to transact transparently to monitor growth in your venture.

Loan Accessibility:

As a start-up, potential investors must perceive that your venture is running smoothly and effectively. Whether it is a bank loan or a private equity investment you are aiming for; opening a corporate account will increase your chances of accessing loans. This is because your investors can better track how the business has been running to date; before making any long-term commitments.

Tax Audit:

When your start-up becomes operational; there is a need to open a corporate account to keep your accounting transparent for external auditing. It will determine whether or not you should be paying taxes to the government. It will also help auditors to determine the precise amount of taxes your business should be paying; based on the net profit being generated by your company.

Bills of Exchange:

Companies often use bills of exchange for accounts receivables and account payables purposes. For instance, if company A agrees to pay company B at a later date, they could sign a bill of exchange for the same. Company A can then take this bill of exchange to the bank to get the bill discounted.

Corporate Banking: Meaning, Characteristics, Importance, and Advantages, Image from Pixabay.

Advantages of Corporate Banking:

The following advantages of corporate banking below are;

It is a segment of financial services necessary for corporations, like funding, capital structure, allocation of finances, and more. It is largely related to financial planning and how finances must be implemented at various stages of the business. The basic function of a bank is giving credit to its customers. It doesn’t just end there. It is the process that covers various stages from granting credit to its recovery.

Credit management also includes setting up the terms and conditions; the policy of agreement, analysis of risk factors, and other related functions. In simple words, this segment takes care of the money owned by corporations or individuals. This segment of corporate banking directs and decides where to invest the money. Management of the cash flow of the corporates is one of the key functions of corporate banks.

This segment ensures efficient collection, distribution, and investment of cash in an organization. It ensures efficient implementation of resources and various other financial operations. Also, Corporate banking involves a specialized loan department that oversees the process of granting loans to the corporation; compliance with the credit regulation policies, and other management-related functions. The loan department of corporate banks must ensure that they must maintain the bank’s profit.

Reference:
- www.myaccountingcourse.com/accounting-dictionary/corporate-banking
- corporatefinanceinstitute.com/resources/knowledge/finance/corporate-banking/
- tin.tin.nsdl.com/tan/Bank.html
- medium.com/@imarticus/whats-the-difference-between-retail-banking-and-corporate-banking-5bb1e4da9e06
- www.234finance.com/the-importance-of-a-corporate-bank-account/
- www.enterpriseedges.com/corporate-banking-development-of-economy
April 16, 2020
Expert Systems (ES): Features, Classification, and Limitations
Expert Systems (ES): The expert system is one of the most active and extensive topics in artificial intelligence (ai) application research. In AI (artificial intelligence), It is a computer system that emulates the decision-making ability of a human expert. Since the first expert system DENDRAL was introduced at Stanford University in the United States in 1965, after 20 years of research and development, by the mid-1980s; various they have spread across various professional fields and achieved great success. Now, they are more widely used and further developed in application development.

Here explains Expert Systems (ES) in their points of meaning, Features, Classification, Development, and Limitations.

Expert systems are a component of artificial intelligence (ai); which contains a large amount of expert-level knowledge and experience in a certain field, and can use human expert knowledge and problem-solving methods to deal with problems in this field. That is to say, it is a program system with a lot of expertise and experience. Also, It uses artificial intelligence and computer technology to make inferences and judgments based on the knowledge and experience provided by one or more experts in a certain field Decision-making process to solve complex problems that require human experts to deal with.

In short, It is a computer program system that simulates human experts to solve domain problems. In 1982, the Japanese Government made an ambitious plan to build fifth-generation computers. This project aimed to use the computer for the following objectives i.e. Conversation, see objects, and adapt to new tasks; it will have memory and reasoning capabilities.

Inspiring with these projects both the US and European governments initiated and directed their resources in the direction to develop advance computer systems. Within a short period, AI and ES (Artificial Intelligence and Expert System) became the national concern as critics suggested that the Japanese were intent on dominating the information industry of the 1990s and beyond.

Features or characteristics of the expert systems (ES):

In general, the expert systems (es) has some common characteristics and advantages, and its characteristics mainly have three aspects in artificial intelligence (ai):

1] Inspiring:

They can use expert knowledge and experience to make inferences, judgments, and decisions. As well as, most of the work and knowledge in the world are non-mathematical. Only a small part of human activities are based on mathematical formulas or numerical calculations (about 8%). Even in the chemistry and physics disciplines, most of them are based on reasoning. Thinking; the same is true for biology, most medicine, and all laws. Also, thinking of enterprise management is almost entirely based on symbolic reasoning, rather than numerical calculation.

2] Transparency:

They can explain its reasoning process and answer the questions raised by the user so that the user can understand the reasoning process and improve the trust in them. For example, if a medical diagnosis expert system diagnoses a patient with pneumonia and must be treated with an antibiotic; then this expert system will explain to the patient why he has pneumonia and must be treated with an antibiotic; just like A medical expert explained the patient’s condition and treatment plan in detail.

3] Flexibility:

They can continually increase knowledge, modify the original knowledge, and continuously update. Because of this feature, they have a very wide range of applications. Also, expert systems with application ranking.

Classification of Expert System (ES):

The expert systems used in a specific field can be divided into the following classification or categories in artificial intelligence (ai):

1] Diagnosis:

Based on the observation and analysis of symptoms, deducing the cause of symptoms and troubleshooting methods, such as medical, mechanical, economic, etc.

2] Interpretation:

A type of system that interprets deep structures or internal conditions based on surface information, such as geological structure analysis, material chemical structure analysis, etc.

3] Predictive:

A type of system that predicts the future situation based on the current situation, such as weather forecast, population forecast, hydrological forecast, economic situation forecast, etc.

4] Design:

A type of system that designs products according to the given product requirements, such as architectural design, mechanical product design, etc.

5] Decision-making:

A type of them that comprehensively evaluates and optimizes feasible solutions.

6] Planning:

A type of them used to formulate action plans, such as automatic program design, military plan formulation, etc.

7] Teaching:

A type of them that can assist in teaching.

8] Mathematical:

A type of them for automatically solving certain mathematical problems.

9] Surveillance:

A type of them that monitors certain types of behavior and intervenes when necessary, such as airport surveillance, forest surveillance, etc.

Development of Expert Systems (ES):

There are indeed some limitations in the development of the current expert system. In the coming years, many of today’s expert system deficiencies will be improved. I believe that the projects that they should continue to study in the future include: As well as, the ability to deal with common sense; the development of deep inference systems; Also, the ability to explain at different levels; the ability of expert systems to learn; the distributed expert system; As well as, the ability to easily acquire and update knowledge.

The future development of they can directly receive data from the outside world through sensors, and can also obtain data from the knowledge base outside the system. In addition to inference in the inference machine, it can draw up plans and simulate problem conditions. The knowledge base contains not only static inference rules and facts, but also dynamic knowledge such as planning, classification, structural patterns, and behavior patterns.

Expert Systems (ES): Features, Classification, and Limitations, Image from Pixabay.

Advantages of the expert systems (ES):

In the past 20 years, they have developed rapidly, the application field is getting wider and wider, and the ability to solve practical problems is becoming stronger and stronger. This is determined by the excellent performance of the expert system and its important role in the national economy.

Specifically, the advantages of expert systems include the following in artificial intelligence (ai):
- They can work efficiently, accurately, thoughtfully, quickly, and tirelessly.
- It is not affected by the surrounding environment when solving practical problems, and it is impossible to miss or forget.
- It can make the expertise of the experts not limited by time and space, to promote the precious and scarce expert knowledge and experience.
- They can promote the development of various fields, enables the professional knowledge and experience of experts in various fields to be summarized and refined, and can widely and effectively spread the knowledge, experience, and ability of experts.
- They can gather and integrate the knowledge and experience of experts in multiple fields and their ability to collaborate to solve major problems. It has more profound knowledge, a richer experience, and stronger working ability.
- The level of the military expert system is one of the important symbols of a country’s national defense modernization and national defense capabilities.
- The development and application of the expert system have huge economic and social benefits.
- Research can promote the development of the entire science and technology.
Limitations of Expert Systems (ES):

Limitations, problems, and demerits of an expert systems (es) are as follows in artificial intelligence (ai):
- It is hard, even for a highly skilled expert to abstract good situational assessment when he is under time pressure.
- The expert system performs well with specific types of operational and analytical tasks.
- The designing and construction of an expert system require expert engineers, they are rare and expensive. This limitation makes an expert system very costly.
- It excels only in solving specified types of problems in a limited domain of knowledge.
- The vocabulary that experts use for expressing facts & relations is frequently limited.
- Another limitation is that most experts have no independent means of checking whether these conclusions are reasonable or not.
- The approach of each expert to the assessment of the situation may be different, yet it may be correct.
- The expert system is comparatively costly to develop and maintain.
April 8, 2020
How to we look at the current phase of globalization?
The current phase of Globalization; of course, is not a new phenomenon. The period 1870 to 1913 experiences a growing trend towards globalization. The new phase of globalization which started around mid 20th century became very widespread, more pronounced and overcharging since the late 1980s by getting more momentum from the political and economic changes that swept across the communist countries, the economic reforms in other countries, the latest multilateral trade agreement which seeks to substantially liberalize international trade and investment and the technological and communication revolutions.

Here explains the question – How to we look at the current phase of globalization?

There are several similarities and differences between the two phases of globalization.

The Human Development Report, 1999, mentioned the following as the new features of the current phase of globalization:

New Market:

They are;
- Growing global markets in services- banking, insurance, transport.
- New financial markets- deregulated, globally linked, working around the clock, with action at a distance in real-time, with new instruments as derivatives.
- Deregulation of antitrust laws and the proliferation of mergers and acquisitions.
- Global consumers market with global trends.
New Actors:

They are;
- Multinational corporations integrating their production and marketing, dominating food production.
- The World Trade Organization- the first multilateral organization with the authority to enforce national governments’ compliance with rules.
- An international criminal court system in the making.
- A booming international network of NGOs.
- Regional blocs proliferating and gaining importance- European union, Association of South-East Asian Nations, Mercosur, North American Free Trade Association, Southern Africa Development Community, among many others.
- More policy coordination groups- G-7, G-40, G-22, G-77, OECD.
New Rules and Norms:

They are;
- Market economic policies spreading around the world, with greater privatization and liberalization than in earlier decades.
- Widespread adoption of democracy as the choice of political regime.
- Human rights conventions and instruments building up in both coverage and number of signatories and growing awareness among people around the world.
- Consensus goals and action agenda for development.
- Conventions and agreements on the global environment– biodiversity, ozone layer, disposal of hazardous wastes, desertification, and climate change.
- Multilateral agreement in trade, taking on such a new agenda as environmental and social conditions.
- New multilateral agreement for services, intellectual property, communications, more binding on national governments than any previous agreements.
- The Multilateral Agreement on Investment under debate.
New (Faster and Cheaper) Tools of Communication:

They are;
- Internet and electronic communication linking many people simultaneously.
- Cellular phones.
- Fax machines
- Faster and cheaper transport by air, rail, and road.
- Computer-aided design.
Four phases of globalization:

This approach naturally leads to 4 phases of globalization.
1. First phases, consumption, and production take place together because the “hunter-gather” lifestyle meant consumption moving to “production” (i.e. food sources).
2. Second phases, consumption, and production remained together but it was because people “brought” the food to themselves by developing agriculture.
3. Third phases, were when modern globalization started in the 19th century. Steamships and railroads (and world peace called Pax Britannica) made it economical to consume goods that were made faraway. With things being made in one country and consumed in another, trade boomed.
4. Finally, the one we are in today – started when production itself got broken up and shifted around to different nations. This knows as offshoring and it radically transformed world trade and manufacturing.
The transitions between the phases – so-called “phase transitions” – were marked by world-shaping changes.

The current and as yet not concluded the fourth phase of accelerated globalization that comprises the last two decades of the 20th century, as well as the first two of the 21st, will characterize especially by the rapidly increasing globalization of the financial markets, the building of communications systems that span the globe “in real-time,” and the overcoming of a binary, ideologically motivated political bloc system.

By no means does this indicate—as the once more intensifying and often religiously-clothed contrasts between the “Occident” and the “Orient” show in all clarity—that under this we might be standing directly before a breakthrough to a unified world society, or that the borders between states have become obsolete. The number of states on our planet that have become independent is also consistently increasing.

How to we look at the current phase of globalization? #Pixabay.

Discuss of Current phase:

This also applies, of course, to other configurations between different surges in globalization. The opening of the occidental modern era onto a common space open to the future, space with which the internet age became both technologically and culturally configured during the last two decades of the 20th century, is, here again, not to comprehensively understand without consideration of those processes designated as the third phase of accelerated globalization, especially the process leading to the development of divergent modernities.

Along with globalization “from above” (especially of financial markets and capital), there appears a globalization “from below” (on the level of mass migrations and their attendant fundamental globalization critique) and even “transverse” globalization (on the level of an information and knowledge society that interconnects on a world-wide scale, the centers of which—let us not deceive ourselves—lie nonetheless in the USA and, to some extent, in Europe).

Within the parameters of this fourth phase, China, India, and perhaps Brazil have become global players that in the future will have an important say not only in political and social matters but in the realms of economics and culture as well. Indeed, China might currently find itself in a position that could compare in many respects to that of the USA within the time frame of the third phase. That the next surge in globalization, which might still expect to occur in the 21st century, should necessarily benefit English alone is, in light of the growing importance of Asian markets and powers, hardly likely.

Characteristics of the Current phase:

The characteristics of the current phase of accelerated globalization are undoubtedly quite specific, yet they are no more specific than those of the past phases, nor are they independent of them. Only when it understands that the present globalization is not something completely new, a creation ex nihilo, will we be able to draw forth the lessons of the preceding phases of this process.

Only then is it possible for one to respond to the trailblazing and vectorizations observable since the expansion of Europe at the close of the 15th century with new paths and new forms of knowledge? Does that take the place of the dissolution of world order currently being articulated? And which could develop such models and measures as are indispensable to peaceful coexistence in diversity?

In the search for these new paths, for this other knowledge, the literature of the world—and it is from here that this work proceeds—are of inestimable value. For their knowledge is a knowledge that does not limit to particular regions of nations, but quite clearly strides beyond individual cultural areas and is constantly on the move.
August 29, 2019
Process Costing: Meaning, Characteristics, and Objectives
Process Costing is a method of costing used to ascertain the cost of a product at each process or stage of manufacture. You will be able to understand the Process Costing based on the points given to them; 1) introduction, 2) meaning of process costing, 3) definition of process costing, 4) characteristics of process costing, 5) objectives of process costing, and 6) principles of process costing. In this method, the costs of materials, wages and overheads are accumulated for each process separately, for a gives period, and then carrying forward cumulatively from one process to the next process till the last process complete.

This article explains the topic of Process Costing: Introduction, Meaning, Definition, Characteristics, Objectives, and Principles.

Process costing is probably the most widely used method of cost ascertainment. Records are also maintaining to account for process losses. These losses may be normal or abnormal. Separate accounting is done for normal and abnormal losses, opening and closing work-in-progress and inter-process profits, if any. This method of costing used in those industries where mass production of identical units undertakes continuously and finish products are subject to several production stages call processes before completion.

The system of process costing is suitable for industries involving continuous production of the same product or products through the same process or set of processes. It is in use in the plant producing paper, rubber products, medicines, chemical products. It is also very much common in flour mill, bottling companies, canning plants, breweries, etc.

Meaning of Process Costing:

They refer to a method of accumulating the cost of production by the process. It uses in mass production industries producing standard products like steel, sugar, chemicals, oil, etc. In all such industries, goods produced are identical and all factory processes are standardizing. Output in such industries consists of like units and every unit of the product undergoes a similar operation in the process.

So it implies that the same cost of material, labor and overhead charges to each unit of the production process. Under this method, costing an individual unit is impossible. It so-calls because under process costing cost of the product ascertain process-wise.

They also know as “Continuous Costing” because industries that adopt process costing undertake the production of goods continuously. They also know as “Average Costing” because the cost per unit of each process ascertains by averaging the expenditure incurred on that process during a period by the number of units produced in that process during the period.

Definition of Process Costing:

After their meaning, Process Costing defines by different scholars as under:

According to Wheldon,

“Process costing is a method of costing used to ascertain the cost of the product at each process, operation or stage of manufacture.”

According to the Institute of Cost and Management Accountants, London,

“Process costing is that form of operation costing which applies where standardized goods are produced.”

Characteristics or Features of Process Costing:

It is that aspect of operation costing which uses to ascertain the cost of the product at each process or stage of manufacture. Where processes are carrying on having one or more of the following characteristics of Process costing:
- Production over having a continuous flow of identical products except. Where plant and machinery are shut-down for repairs, etc.
- Clearly defined process cost centers and the accumulation of all costs (materials, labor, and overheads) by the cost centers.
- The maintenance of accurate records of units and part units produced and cost incurred by each process.
- The finished product of one process becomes the raw materials of the next process or operation and so on until the final product obtains.
- Avoidable and unavoidable losses usually arise at different stages of manufacture for various reasons. Treatment of normal and abnormal losses or gains is to study in this method of costing.
Extra characteristics:
- Sometimes goods are transferring from one process to another process, not at cost price but transfer price just to compare this with the market price and to have a check on the inefficiency and losses occurring in a particular process. The elimination of the profit elements from stock is to learn in this method of costing.
- To obtain accurate average costs, it is necessary to measure the production at various stages of manufacture. As all the input units may not convert into finish goods; some may be in progress. The calculation of effective units is to learn in this method of costing.
- Different products with or without by-products are simultaneously producing at one or more stages or processes of manufacture. The valuation of by-products and apportionment of the joint cost before the point of separation is an important aspect of this method of costing. In certain industries, by-products may require further processing before they can sell.
- The main product of one firm may be a by-product of another firm and in certain circumstances. It may be available in the market at prices which are lower than the cost to the first-mentioned firm. It is essential, therefore, that this cost knows so that advantages can take of these market conditions.
- The output is uniform and all units are identical during one or more processes. So the cost per unit of production can ascertain only by averaging the expenditure incurred during a particular period.
Process Costing: Meaning, Characteristics, and Objectives, #Pixabay.

Objectives of Process Costing:

How do you know what cost you need? If you know the total cost of production of each process. The following are the main objectives of process costing:
1. To Ascertain the Cost of Each Process: It is necessary to know the cost at every stage of production and this fulfills by the process costing method. On this basis, management can decide concerning the make or buy the required commodities.
2. To Ascertain the Cost of Bye-Product: Bye-product is that which obtains with the main product in the course of the production. For example; while producing mustard oil, the cake also obtains. Which terms as bye-product and the cost of which is necessary to know the actual cost of the main product? Cost of bye-product ascertains by preparing bye-product Account, under process costing.
3. To Know the Wastage in Each Process of Production: During the courage of production, different wastages, such as; loss in weight, normal wastage, and abnormal wastage, etc. may arise. Management of any concern may know about these wastages by Process Costing Account.
4. To Ascertain the Profit or Loss of Each Process: The output or the part of output at the stage of every process can sell out either at profit or loss. Thus the management can know about the profit or loss at every process by preparing Processes Account.
5. The base of the Valuation of Opening and Closing Stock of Each Next Process: If the total cost of production of any process divides by the number of units, we get the cost of production per unit of that particular process and on this basis opening and closing stock of next process value.
Principles of Process Costing:

The essential stages in principles of process costing are:

The factory divide into several processes and an account maintains for each process. Each Process Account debit with material cost, labor cost, direct expenses, and overheads allocate or apportion to the process.

The output of a process transfer to the next process in the sequence. In other words, the finished output of one process becomes input (materials) of the next process. The production records of each process are keeping in such a way as to show. The quantity of production and the wastage and scrap and the cost of production of each process for each period.

Extra things:
- In some cases, the whole output of one process not transfers to the next process. A part of the output may transfer to the next process. And, a certain portion of the output may sell in semi-finish form or may keep in stock and transfer to Process Stock Account. If the output of any process sells at a profit in semi-finish form. Then profit on that particular sale will show on the debit side of that concerning profit, as profit on goods sale or transfer.
- In case there is loss or wastage of units in any process. The loss has to born by the good units produced in that process and as a result. The average cost per unit increases to that extent. It may note that, if there is loss or wastage in any process, the quantity of loss or wastage should enter on the credit side of the concerned Process Account in the quantity column. In case the wastage has some scrap value. It should appear on the credit side of the concerned Process Account in the value column against the entry for wastage. But, if the scrap value of the wastage does not specifically give in the problem. It should take as nil.
The total cost of production of each process for a particular period divided by the number of units produced in that process during that period. And, the average cost per unit of production for a period obtain. The finished output of the last process transfer to the Finish Goods Account.
August 13, 2019
Single Costing: Meaning, Characteristics, and Objectives
The single Costing method of the ascertainment of the cost of production is suitable for those industries in which manufacturing is continuous and units of output are identical. You will be able to understand the Single Costing based on the points given to them; introduction, the meaning of single costing, the definition of single costing, characteristics of single costing, and objectives of single costing. One operation costing method of costing by units of production and adopts where production is uniform and a continuous affair, units of output are identical and the cost units are physical and natural.

This article explains the topic of Single Costing: Introduction, Meaning, Definition, Characteristics, and Objectives.

The cost per single determines by dividing the total cost during a given period by the number of units produced during that period. This method of costing generally adopt where an undertaking engages in producing only one type of product or two or more products of the same kind but of varying grades or quality. The industries where this method of costing uses are the dairy industry, beverages, collieries, sugar mills, cement works, brick-works, paper mills, etc.

Meaning of Single Costing:

Single or Unit or Output costing is the method of costing in which cost is ascertained per unit of a single product in continuous manufacturing activity. Every Single or per unit, the cost calculates by dividing total production cost by several units produced.

This method knows as “Single costing” as industries adopting this method manufacture, in most cases, a single variety of products. This method also knows as “Unit costing”, as not only the cost of the total output but also the cost per unit of output ascertains under this method. Under this method cost units are identical. This method also calls “Output costing”, as the cost ascertains for the total output of a product.

Definition of Single Costing:

The following definitions below are;

According to J.R. Batliboi,

“Single or output cost system is used in businesses where a standard product is turned out and it is desired to find out the cost of a basic unit of production.”

The Institute of Cost and Management Accountants, London,

“output costing is the basic costing method applicable where goods or services result from a series of continuous or repetitive operations or processes to which costs are charged before being averaged over the units produced during the period.”

From the above definitions, it is clear that this costing is a method of costing under. Which there is the costing of a single product, which produces by continuous manufacturing activity. Though under this method of costing a single variety of product manufacturers. It may vary concerning size, grade, color, etc. The example of industries that make use of this method of costing is; brick, sugar, cloth, coal, cement, fisheries, food canning, quarries, plantation industries, etc.

Thus single costing adopts for cost ascertainment in those manufacturing organizations. Which is engaging in producing only one type of product or two or more products of the same kind but of varying grades or qualities? This method uses in industries like mines, quarries, oil drilling; breweries, cement works, brick-works, .sugar mills, steel manufacture and aluminum products, etc.

In all those industries where single costing uses, there is a standard or natural unit of cost. For example, a tonne of coal in collieries, one thousand bricks in brick-works, a quintal of sugar in the sugar industry, a tonne of cement in the cement industry, etc. In this costing, the cost of production usually ascertains by preparing a cost sheet or a cost statement.

Single Costing: Meaning, Characteristics, and Objectives, #Pixabay.

Characteristic or Features of Industries Which Use Single Costing:

The following are the characteristics or features of the industries where the single costing method uses:
- The cost per unit of output, determined under a single. Costing enables the management to make a real comparison between different periods and between different firms within the same industry, as the unit of output is a common factor between different periods and between different firms within the same industry.
- Equality of cost is an important feature of this method. That is, under this method, identical cost units will have identical costs.
- Production is on a large scale and is continuous.
- The units of production are identical and homogeneous.
- One cost is the method of costing adopt in concerns where there is a production of a product. Or, a few grades of the same product differing only in size, shape or quality by the continuous process of manufacture. The units of production or output are identical and the costs of units are physical and natural.
- The cost units are physical and natural and capable of being expressed in a convenient unit of measurement.
- This method is the simplest method of all the methods of cost; in the sense that the cost collection and the cost ascertainment are quite simple.
- In most cases, the unit of measure is also the cost unit, viz., one unit (in the case of T.V., radio, camera), 1,000 units (in the case of bricks), one gross (in the case of pencils, slates, bolts, and nuts), one liter (in the case of paints), one tonne (in the case of coal, cement, and steel), one bale (in the case of cotton), etc.
Objectives of Single Costing:

Single costing is a very simple method of costing. Its principal objectives are as follows;
- To ascertain the per-unit cost of production by dividing the total cost of production by the number of units produced.
- To estimate per unit cost of production for the future and facilitate production planning.
- Help in the preparation of tenders and fixation of selling prices.
- To facilitate a comparison of the cost of production of two accounting periods.
- To control the cost of the product through the comparative study of the costs of any two periods. Or, the comparison of the actual costs with the Pre-determined standard cost.
- The analyze the expenditure by nature, classify them into the element of cost and know. The extent to which each element of cost contributes to the total cost.
- To ascertain the profit or loss of production.
August 12, 2019