Partnership Accounting: Preparing Appropriation Account
What is a Profit and Loss Appropriation Account? In this post, we will talk about appropriation accounts in accounting for partnerships. The appropriation account is another account that is prepared by a partnership firm. In contrast to a sole proprietorship, the earnings of a partnership are split proportionally among the partners. The profit must be […]
What are the Advantages of Cost Audit?
A cost Audit is an important part of a company’s financial and risk management. The main purpose of this cost audit is to help the company to save money by fixing any cost-related mistakes. Cost auditing is a critical evaluation process used to ensure that cost accounts are accurate and that cost accounting plans and […]
What is Direct Labour in Cost Accounting?
Direct labour is the cost of the labour used to produce a product or service. It includes all wages, salaries, and other forms of employee compensation, such as benefits. In simple words, it is labour that can be conveniently identified or attributed wholly to a particular job, product, or process or expended in converting raw […]
Hedge Fund Strategies in Finance
You’ve probably heard the term “hedge fund,” but what exactly is it, and how do these firms make money? Unlike traditional investment funds that simply buy stocks and hope they go up, hedge funds use a wide array of sophisticated strategies to generate returns in any market condition. They can profit from both rising and […]
Why do variances arise in costing
Variance in cost accounting is the difference between the actual cost of something and the expected cost of something. For example, a direct material cost variance means that the actual cost of direct materials used to produce a particular number of units is different from the standard (or expected) cost. Variances can either be favourable […]
The Payback Period Method of Investment Appraisal
The payback period is the amount of time it takes to recover the investment’s initial outlay. In other words, it is the amount of time it takes for the project to break even. For example, if the said company invested $80,000 into an extension of its premises and it takes them five years to get […]
Accounts for manufacturing businesses
What are manufacturing businesses? A manufacturing business is that which is involved in the production of manufacture of goods. Typical examples of manufacturing businesses are car manufacturers, television manufacturers, and mobile phone manufacturers. The accounting for manufacturing concerns is a little bit different from trading concerns. A separate account, known as a manufacturing account, is […]
What are the final accounts? and how to prepare them?
After passing journal entries for events and transactions, posting them to ledgers, and preparing trial balances, the final step is to prepare final accounts. By final accounts, we mean manufacturing and trading accounts (only trading accounts in the case of non-manufacturing entities), profit and loss accounts, and balance sheet and cash flow statements. Other reports […]
ERP Implementation Guidance for Management Accountants
ERP implementation refers to integrating an ERP system with various modules to improve financial data management, analysis, and decision-making. The ERP implementation process is quite long and involved, and the implementation process is a very important part of it. As the implementation begins, both the internal and external audit departments and other management departments will […]
What are the Differences between Future and Options?
Futures and options are both types of financial derivatives that allow traders to speculate on the future price of an underlying asset. However, there are some key differences between the two. Futures A futures contract is a legally binding agreement to buy or sell an underlying asset at a predetermined price on a specified future […]