Determining Cost of Sales under Periodic System
Periodic System of Inventory. The most direct means of determining the physical quantity of inventory on hand is to count it. An in...
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Cut-off Procedures for Inventory
What is Cut-off Procedure? The process to ensure that transactions are recorded in the proper accounting period is known as cutoff ...
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Physical Stock Count Procedures and Stock Verification
Stock take & Verification of Actual Stock as at year end. Written instructions that describe the procedures to be performed by th...
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Types of Inventory and Stock in trade
TYPES OF INVENTORY (a) RETAIL–WHOLESALE. Wholesalers and retailers typically acquire merchandise that is ready for resale to customers...
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Consolidation Method of Preparing Consolidated Financial Statements
Consolidation, translation, and the equity method are related sets of accounting practices used mainly in the preparation of consolidat...
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Determining Financial Leverage with Example
Financial Leverage Ratio Formula Financial leverage is computed as: Financial Leverage Ratio = Assets ...
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Days’ Purchases in Accounts Payable
Measuring the Ability to Pay Any judgment regarding payment of current liabilities should be made in the light of the degree of urge...
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Applying Sensitivity Analysis on Liquidity Ratios
Sensitivity Analysis on the Liquidity Ratios In analyzing the ratios, it is important to gauge how sensitive these ratios are to cha...
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Cash Flow Ratio
Significance and Formula of Cash Flow ratio The cash flow ratio measures a firm’s ability to meet its debt obligations with cash genera...
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Why firms use debt as leverage?
Using Debt as Leverage Its all about financing decisions and to reduce the costs of equity and debts. A company uses leverage in two...
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Company’s immediate liquidity analysis with Cash Ratio
Comparing Cash Ratios of Companies The cash ratio analyzes liquidity in a more conservative manner, looking at a company’s immediate li...
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Determining Optimal Structure of Capital & Financial Leverage
Capital Structure Analysis In addition to assessing a firm’s ability to meet its short-term obligà lion, it Is impOrtaflt to evaluate ...
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Debt as Leverage
Financial Leverage vs Operating Leverage A company uses leverage in two ways: financial and operating. Financial leverage is raisin...
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Accounting Entries for membership fees, subscriptions, enterance fee and life membership fees
Another signifi cant difference between these organizations and the trading organization is that their income is mainly derived from th...
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Accounting for Non Profit Making Organizations, preparation of financial statements of NPOs
Financial statements of non-profit-making bodies In this tutorial we look at the fi nancial statements of organizations such as clu...
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Calculate Sales Figure in Single Entry Accounting(Incomplete Records)
What is single entry and accounting from incomplete records. So far, we have been looking at the preparation of fi nancial statements f...
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Separate Entity Concept
Separate Entity Concept in Accounting and other laws The laws recognizes a company as a ‘ person ’ in its own right, distinct from th...
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The qualitative characteristics of financial statements
Why people trust on financial statements? All of the users of financial statements, both internal and external to the organisation, req...
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