Parties Interested in Accounting Information: Learning Objectives: Explain, who may be interested in accounting information of a company or firm? Name the parties interested in accounting information and state their basic interests therein. Why managers are interested in providing accounting information? There are a
Participative Budgeting or Self Imposed Budgeting: Learning Objective of the article: Define and explain the term “self imposed or participative budgeting” in managerial accounting. Explain the importance and use of a participative or self imposed budget in business. What are advantages and disadvantages of
Participative Budget Definition: A method of preparing budgets in which managers prepare their own budgets. These budgets are then reviewed by the manager’s supervisor, and any issues are resolved by mutual agreement. See Self-imposed budget.
Depreciation Methods: Learning Objectives: What are the various methods for depreciation? Fixed assets differ from each other in their nature so widely that the same depreciation methods cannot be applied to each. The following methods have therefore been evolved for depreciating various assets: Fixed
Depreciation Fund Method or Sinking Fund Method of Depreciation: Learning Objectives: What is depreciation fund method or sinking fund method of depreciation? What are its advantages and disadvantages? Definition and Explanation: Depreciation fund method is also know as sinking fund method or amortization fund
Depreciation, Depletion and Amortization: Learning Objectives: What is the difference among depreciation, depletion, and amortization. Depreciation: The term depreciation is used with reference to tangible fixed assets because the permanent continuing and gradual fall in book value is possible only in the case of
Depletion Method of Depreciation: Learning Objectives: What is depletion method of depreciation? Explain with example. Depletion method of depreciation is especially suited to mines, quarries, sand pits, etc. According to it the cost of the asset is divided by the total workable deposits. In
Dependent Variable Definition: A variable that reacts or responds to some causal factor; total cost is the dependent variable, as represented by the letter Y, in the equation: Y = a + bX.
Denominator Activity definition: The activity figure used to compute the predetermined overhead rate.
Delivery Cycle Time Definition: The amount of time required from receipt of an order from a customer to shipment of the completed goods.
Degree of Operating Leverage Definition: A measure, at a given level of sales, of how a percentage change in sales volume will affect profits. The degree of operating leverage is computed by dividing contribution margin by net income.
Definition and Explanation of Cash Book: Learning Objectives: Define and explain cash book. How a cash book is balanced. Prepare a format of the simple cash book. Cash book is a book of original entry in which transactions relating only to cash receipts and
Definition and Explanation of Bookkeeping: Learning Objectives: Define and explain the term bookkeeping. The work book or books mean books of accounts and keeping implies maintaining in proper form and order. Thus bookkeeping may be defined as the art of recording business transactions in
Definition and Explanation of Ledger: Learning Objectives: Define and explain the term “ledger” What are the features or characteristics of ledger? When all the transactions of a given period have been journalised, the next thing is to classify them according to the accounts affected.
Definition and Explanation of Activity Based Costing System: Learning Objectives: Understand activity based costing system. How it differs from a traditional costing system? Activity based costing (ABC) is a costing method that is designed to provide managers with cost information for strategic and other
Definition and Explanation of Accounting: Learning Objectives: Define and explain accounting. What are the main functions of accounting? Accounting is defined as “the art of recording, classifying and summarizing in terms of money transactions and events of a financial character and interpreting the results
Definition and Explanation of Single Entry System: Learning Objectives: Define and explain single entry system of bookkeeping. What are limitations of single entry system of accounting It is difficult to define single entry system because, in fact, there exists no system like single entry
Definition and Explanation of Process Costing System: Cost accumulation procedures used by manufacturing concerns are classified as either job order costing or process costing. The Job Order Costing System chapter deals with the procedures applicable to job order costing. It is important to understand