Accounting

Definition: Contract Costing is an accounting of a long-term contract work usually applicable on construction work such as building construction, bridge construction, road construction and other long-run engineering works which take long duration in completion, i.e., a year or more. However, contract costing is very much similar to job costing but is not same, in contract … [Read more...] about Contract Costing

Definition: Accounting Principles are the rules and regulations of the accounting language accepted worldwide and are made to make the language understandable for all and ensures the accounting records reliability. Accounting principles should be followed to maintain the resemblance of the records. So that the records should reveal the same information to everyone using the … [Read more...] about Accounting Principles

Definition: In Marginal Costing, we study the impact of variable cost at distinctive levels of production capacity for that we need to divide the total cost into fixed and variable cost because the fixed cost does not make any impact on marginal cost. However, fluctuations in variable cost in different production capacities are known as the marginal cost for the … [Read more...] about Marginal Costing

Definition: Fixed cost is one of the two components of the total cost of goods and services along with the variable cost. These costs are applicable to all businesses doing any kind of business. It is a cost that does not change with an increase or decrease in the number of goods and services produced. In economics, a business can achieve economies of scale when it produces … [Read more...] about Fixed Cost

Definition: The procedure of revising mistakes is known as “Rectification of Errors”. These errors can be of two types. First, the errors committed on both side in an entry which does not influence the trial balance and can be rectified by making a journal entry. And another one is the errors that occur one side of trial balance and disturbs the trial balance are known as … [Read more...] about Rectification of Errors

Definition: Income Statement provides a significant outlook on business health and its profitability, it is nothing but a profit and loss statement of the company showing all the expenses and incomes incurred during the year to get the net profit/ loss, although it won’t show the whole picture of the financial health of a company. The report on the assets, liabilities and … [Read more...] about Income Statement

Definition: Double Entry System of accounting by its name describes that every transaction will once be debited and once credited. This system is followed by individuals and institutions for making entries of their day to day business transactions, whether receiving and sacrificing benefits. For instance: Mr. A makes some payment to Mr. B, in this transaction Mr. B is a … [Read more...] about Double Entry System

Definition: As stated in the Accounting Standard (AS) 26 “Intangible Assets” published by the Institute of Chartered Accountants of India (ICAI). It is an attributable non-monetary asset beyond physical affluence, retained for use in the manufacturing or production of goods and services for renting to others or for supervisory purposes. An asset is a reserve transpired by … [Read more...] about Intangible Assets

Definition: Cash Flow Statement serves the shift of the cash by the company, i.e., accepting cash on the one side and making payments by cash on the other side. Its aim is to determine the difference between the cash-in-hand the company has at the beginning and at the end of the year. A specified protocol of divergent stock exchanges demands corporate entities to urge cash … [Read more...] about Cash Flow Statement

Definition: Bank Reconciliation Statement is inclined to acquire the balance of the passbook through the balance of cash book or to find the balance of the cash book by taking the balance of passbook on a precise date. The lag does not commonly matter as early or afterwards, the client and bank both will make the entries. However, to understand the precise position and to … [Read more...] about Bank Reconciliation Statement