Accounting Definitions

In accounting burden rate can be defined as the allocation rate at which the indirect costs are allocated to the direct cost of that of inventory and labor. Burden costs are added to both inventory and labor direct costs if a business wants to

The net realizable value is a valuation technique that is used to value inventory. With the help of this technique you tend to calculate the market value of the inventory items subtracting all the predictable costs associated with the inventory such as manufacturing and

Stock Repurchases is a process of buying back shares from the investors of the business. There are a number of reasons due to which a company undergoes repurchase process. Sometimes in order to stabilize the market price of the share the company has to

The net income of a business is sometimes given the name of the earned capital and may be referred to the retained earnings of a business that is left with the business after paying the dividends to the share holders of the company. The

Accounts payable is one of the most important financial figure in a firm’s accounting and is used to calculate a number of other financial figures such as current ratio, working capital and many other financial figures. In order to calculate the above mentioned figures

It is quite common to observe transaction error while conducting the financial transactions. The cost of correcting these errors is far greater than the cost of prohibiting these errors initially. One of the various metrics to avoid the occurrence of the transaction error is

The accounts receivable collection period can be defined as a period that is required to collect the accounts receivables for a business. In order to calculate the accounts receivable collection period the receivables are compared with the total sales of the business to find

Accounts payable days is the measure of the number of days that a company needs to pay its suppliers. If the number of days required for the payment increase from one period to the other or number of days increase from the usual number

An accounting system is a type of computerized information system that helps a business in maintaining and managing its accounts and financial transactions. A business has a very complex accounting system that consists of sales, purchase, transactions and other kind of financial processes. The

A cheque is a kind of bill of exchange that is drawn on a specific bank or bank and is payable only on demand. There is a considerable difference between a cheque and a bill of exchange that can be explained as under:- Cheque

The market value added is a concept in accounting that deals with the difference between the market value of the business and the capital invested to run the business. If the market value of the business is less than the cost of the capital

Business in liquidation is a business that is in the closing process or the owner is winding up his business due to loss or some other reason. While liquidating a business all the assets of the business are turned into cash via selling them