Sales Budget
Jennifer edwards A sales budget is representation of the expectation of a company regarding its sales both in terms of units and cash for that particular budgeting period. If a company covers…
Budgeted Income Statement
A budgeted income statement is a projection or representation of a normal income statement with respect to the representation of income statement with future budgets. The budgeted income statement is…
How to define a dividend policy
Dividend policy is a form of document that is designed by the management and decision makers of the company to decide the amount of dividend that must be paid to…
Inventory with High Turnover
A high inventory turnover means that the size of the inventory and the number of products in the inventory of a company is constantly increasing. A high turnover inventory can…
Contingent Liability
A contingent liability can be defined as the loss that is not calculated at present but may occur at some point in future. The contingent liability comes in to the…
Accounting for bad debts and early payment discounts
Whenever a company sells its products and services the amount is either paid in cash on hand or the customers are allowed to pay for the products later. Whenever the…
Cost of Quality
The cost of quality may be defined as the cost associated with manufacturing high quality products according to the money spent by the customer and the expectation of the customer.…
Sales Tax Accounting
Sales tax is a kind of tax that is charged to the customer whenever the customer makes purchase of a certain product. The sales tax is charged by the company…
Treasury Stock Accounting
Treasury stock accounting is referred to that type of accounting where a company is repurchasing its own shares. The stock that is repurchased by the company is called treasury stock…
Retained Earnings Statement, Example & Formula
The statement of retained earnings is a financial statement that records the changes and transformations that occur in retained earnings of a business over a certain accounting period. The beginning…
Inventory Audit Method
Inventory audit methods are common in those businesses or firms where inventory is treated as a form of asset and an annual auditing of inventory is done every year. The…
Monetary Unit Principle
The monetary unit principle of accounting states that all the transactions must be recorded in the form of currency. In other words a business can only record those transactions that…
The Cost Principle
The cost principle is one of the basic principles of accounting that states that all the assets, liabilities, equities and expenses must be recorded on the financial statements at their…
Accounting Principle: The Matching Principle
The matching principle of accounting is one of the basic principles of accrual base accounting. This principle states that when a business is going to record its revenues it must…
Gross Profit Ratio
Gross profit ratio is the ratio that shows the total amount of profit that will be earned by a company by selling its products and services. The gross profit ratio…
Interest Coverage Ratio
As the name indicates interest coverage ratio is the ratio that depicts the ability of a company to cover its interest expense. This is the ratio that shows whether a…
Gearing Ratio
Gearing ratio can be defined as the ratio a company’s debt to that of its equity. This is also called as debt to equity ratio. High gearing ratio means that…
Asset Purchase Process
Asset purchase is a type of acquisition in which the purchaser only wants to purchase the assets of the seller. Although asset purchase is a common practice but it must…