Sana Archive
Half-Year Convention Definition: A requirement under the Modified Accelerated Cost Recovery System (MACRS) that allows a company to take only a half year’s depreciation in the first and last years of an asset’s depreciation period. Recommended Books ! Or Download E accounting book in
Gross Profit Analysis Solved Problems: Learning Objective: Calculate sales price variance, sales volume variance, cost price variance, cost volume variance, sales mix variance, and final sales volume variance. Problem 1: A cost analyst of the Memphis Company has prepared a monthly gross profit analysis,
Gross Profit Analysis-Questions and Answers: Questions: Why is the gross profit figure significant? What causes changes in the gross profit? Explain “product mix” or “sales mix.” By what methods can a change in the gross profit figure be analyzed? Describe how the sales price
Gross Profit Analysis Based on the Previous Year’s Figures: As the basis for illustrating the gross profit analysis using the previous year’s figures, the following gross profit section of a company’s operating statements for 19A and 19B are presented. 19A 19B Changes Sales (net)
Gross Profit (GP) Analysis Case Study: Gross Profit analysis of time sharing computer programs: The senior system analysis of Tyrene, Inc. Bob Canedy, developed in his spare time three unique packages of computer programs: Package 1, inventory control; Package 2, sales analysis; Package 3;
Gross Profit Analysis Based on Budgets and Standard Costs: As the basis for illustrating the analysis of gross profit using budgets and standard costs, three financial statements for a company are presented: The budgeted income statement prepared at the beginning of the period The
Generally Accepted Accounting Principles (GAAP): Generally accepted accounting principles (GAAP) are those principles that have substantial authoritative support. The AICPA’s code of professional conduct requires that members prepare financial statements in accordance with generally accepted accounting principles (GAAP). Specifically rule 203 of this code
General Environment Definition: Broad external conditions that may affect the organization.
Joint Venture Accounting Questions and Answers: Learning Objectives: Answers of some important joint venture questions. Theoretical Questions: Define a “joint venture”. What are the different methods of recording transactions relating to joint venture? Differentiate between “joint venture” and “consignment”. What is memorandum joint venture
Future Value and Present Value Tables Future Value Tables: Table 1: Future Value of $1 Table 2: Future Value of Ordinary Annuity (Annuity in Arrear – End of Period Payments) Present Value Tables: Table 3: Present Value of $1 Table 4: Present Value of
Further Classification of Labor Costs: Learning Objective of the Article: Properly classify labor costs associated with idle time, overtime and fringe benefits. Idle time, overtime, and fringe benefits associated with direct labor workers pose particular problems in accounting for labor costs. Are these costs
Functions of Accounting (accounting functions): Learning Objectives: What are the important functions of accounting? Record Keeping Function: The primary function of accounting is to keep a systematic record of financial transaction – journalisation, posting and preparation of final statements. The purpose of this function
Full Costing Definition: Full costing is a costing method that includes all manufacturing costs – direct materials, direct labor, and both variable and fixed overhead – as part of the cost of a finished unit of product. This term is synonymous with absorption costing.
Form of Ledger and Method of Posting: Form of Ledger: One account usually occupies one page in the ledger. But if the account is big one it may extend to two or more pages. The pages of the ledger are vertically divided into two
Cost Flow and Journal Entries–Process Costing System: Materials: Materials are drawn from the storeroom using a material requisition form. Materials can be added in any department, although it is not unusual for materials to be added only in the first department, with subsequent department
Flexible Budget Definition: A budget that is designed to cover a range of activity and that can be used to develop budgeted costs at any point within that range to compare to actual costs incurred.
Flexible Budget Definition: A budget that is designed to cover a range of activity and that can be used to develop budgeted costs at any point within that range to compare to actual costs incurred.
Fixed Overhead Efficiency Variance: Learning Objective of the article: Define and explain fixed overhead efficiency variance. How is fixed overhead efficiency variance calculated? What are the reasons / causes of unfavorable fixed overhead efficiency variance? When companies adopt four variance approach they divide the