How to Calculate Profit or Loss on Incomplete Contracts?
The profit or loss on incomplete contracts in cost accounting can be calculated using the percentage of completion method. This method recognizes profit or loss on a contract in proportion to the percentage of work completed. Profit of Loss on Incomplete Contract – Calculation To calculate the profit or loss on an incomplete contract using […]
The International Accounting Standards Board
The International Accounting Standards Board (IASB) is an independent, standard-setting organisation of the International Financial Reporting Standards Foundation (IFRS Foundation). This organisation was established on April 1, 2001, as a successor organisation to the International Accounting Standards Committee (IASC). It is in charge of establishing International Financial Reporting Standards as well as promoting the adoption […]
What is the Meaning and Scope of Accounting
Accounting is a fundamental aspect of any business, big or small. It involves the recording, analysis, and interpretation of financial information to make informed decisions. In this blog post, we will explore the meaning and scope of accounting, understanding its significance in finance and business operations. Meaning and Scope of Accounting According to the American […]
What is the Double Entry System of Book-Keeping?
The Double Entry System of bookkeeping is an accounting method where every financial transaction is recorded in at least two accounts. In the double entry system, each transaction is accounted for separately in the books, called the debit and credit. All these entries are shown on both sides of the ledger, usually in two columns, […]
What is Batch Costing? How is it Different From Job Costing?
Batch costing is a form of specific order costing in which costs are attributed to batches of products. A batch might also be called a ‘production run’. A batch is a group of related but distinctively different products that are produced at the same time. Each batch costs exactly the same as a job and […]
5 ways to improve liquidity ratios
Liquidity is the lifeblood of any organization, which can easily face its short-term obligations without a strain on finances. Liquidity ratios, like the current ratio and quick ratio, are key indicators of a company’s financial health, showing whether a company is capable of handling immediate liabilities with available assets. A healthy liquidity position inspires investor […]
What is a Cost Plus Contract?
Cost plus contract, which is also known as a cost-reimbursement contract, pays a contractor for all permitted expenses up to a predetermined limit plus an additional sum to cover profit on top of that. Contracts with a fixed price that pay the contractor the agreed-upon sum regardless of costs incurred are also known as cost-reimbursement […]
Write a note on accounting for payroll
Accounting for payroll is a fundamental aspect of managing human resources and ensuring accurate financial records. This procedure entails keeping track of all costs associated with employee salaries, benefits, and taxes. Businesses may comply with legal and regulatory requirements, maintain openness in financial reporting, and make wise decisions about their personnel by correctly accounting for […]
Bank Overdraft as a Source of Finance
Bank overdraft is a common source of finance used by businesses, individuals and even governments to meet their short-term cash flow needs. An overdraft is essentially an agreement between a bank and its customer, which allows the customer to withdraw funds exceeding their account balance up to a pre-agreed limit. Advantages of Bank Overdraft Quick […]
What is a Production Budget and Its Components?
A production budget is a financial plan that outlines the estimated costs associated with creating and delivering a product or service. The production budget serves as a guide for businesses to allocate resources effectively, plan their expenses, and manage costs throughout the production cycle. It provides insight into the financial requirements of producing and delivering […]