# Shamsa Archive

## Indirect Method of Cash Flow Definition

Indirect Method of Cash Flow Definition: A method of computing the cash provided by operating activities that starts with net income and adjusts it to a cash basis. It is also known as the reconciliation method.

## Indirect Cost Definition

Indirect Cost Definition: Indirect cost is a cost that cannot be easily and conveniently traced to the particular cost object under consideration.

## Indirect Materials Definition

Indirect Materials Definition: Small items of material such as glue and nails. These items may become an integral part of a finished product but are traceable to the product only at great cost or inconvenience.

## Indirect Labor Definition

Indirect Labor Definition: The labor costs of janitors, supervisors, materials handlers, and other factory workers that cannot be conveniently traced directly to particular products.

## Independent Variable Definition

Independent Variable Definition: An independent variable is a variable that acts as a causal factor; activity is the independent variable, as represented by the letter X in the following equation: Y = a + bX

## Incremental Cost Definition

Incremental Cost Definition: Incremental cost is defined as an increase in cost between two alternatives. Also see Differential cost.

## Incremental Analysis Definition

Incremental Analysis Definition: Incremental analysis is an analytical approach that focuses only on those items of revenue, cost, and volume that will change as a result of a decision. Y = a + bX

## Income Tax and Capital Budgeting Decisions

Income Tax and Capital Budgeting Decisions: Learning Objectives: Include income taxes in a capital budgeting analysis. In our discussion of capital budgeting decisions in this chapter, we ignored income taxes for two reasons. First, many organizations do not pay income taxes. Not-for-profit organizations, such

## Income Statement Definition

Income Statement Definition: Income statement is the summary of a management’s performance as reflected in the profitability (or lack of it) of a firm over a certain period. It itemizes the revenues and expenses of past that led to the current profit or loss,

## Income Comparison of Variable and Absorption Costing

Income Comparison of Variable  and Absorption Costing: Learning Objectives: Prepare income statements using variable costing and absorption costing. Why net operating income usually different under variable and absorption costing methods? The income statements prepared under absorption costing and variable costing usually produce different net

## Income and Expenditure Account

Income and Expenditure Account: Learning Objectives: Define and explain income and expenditure account. What is the purpose of preparing income and expenditure account? Example and format of Income and expenditure account Definition and Explanation: Income and expenditure account is merely another name for profit and

## Business and Quality Improvement Programs

Business and Quality Improvement Programs: After studying this chapter you should be able to understand the basic concepts underlying: Just in time (JIT) manufacturing system. Total quality management (TQM). Business process reengineering (BPR). Theory of constraints (TOC). The last two decades have been a

## Definitions of Important Terms Used in Consignment Accounting

Definitions of Important Terms Used in Consignment Accounting: Learning Objectives: Define the most important terms used in consignment account. Commission: The term commission as used in connection with consignment denotes the remuneration of the consignee for selling the goods of the consignor. This commission

## Importance of Contribution Margin – Advantages of Cost Volume Profit (CVP) Analysis

Importance of Contribution Margin – Advantages of Cost Volume Profit (CVP) Analysis: Learning Objectives: What is the importance of contribution margin? What are the advantages of cost volume profit (CVP) analysis? Cost volume profit analysis (CVP analysis) can be used to help find the

## Designing and Implementing Activity Based Costing (ABC) System

Designing and Implementing Activity Based Costing (ABC) System: Experts agree on several essential characteristics of any successful implementation of activity based costing system. First, the initiative to implement activity based costing must be strongly supported by top management. Second, the design and implementation of

## Factory Overhead Idle Capacity Variance

Factory Overhead Idle Capacity Variance: Learning Objective of the article: Define and explain factory overhead idle capacity variance. How is FOH idle capacity variance calculated? What are the reasons of unfavorable idle capacity variance Definition and Explanation: Factory overhead idle capacity variance is the

## Impact of Just In Time (JIT) Inventory Methods on Variable and Absorption Costing System

Impact of Just In Time (JIT) Inventory Methods on Variable and Absorption Costing System: Learning Objectives: Why net operating income figure under variable costing and absorption costing systems are almost same when companies use just in time manufacturing and inventory control system? Variable costing