Inventory valuation : Inventory valuation : Inventories should be generally valued at the lower of cost or net realizable value. What is inventory valuation? Inventories should be generally valued at the lower of cost or net realizable value. This principal…
Inventory is also known as ‘stock’, refers to physical goods and materials that business owns with a view of future resale. And it is very important asset for any company. Further, inventory can be defined as asset held The inventories…
Net Realizable Value also called Liquidation Value or Adjusted Book Value. Net realizable value is defined as realizable value of all assets after deduction of liquidation expenses and paying off liabilities. Although in some case liquidation expenses can be ignored…
Internal rate of return (irr) is defined as that discount rate which equates the present value of future cash flows of a security to its market value. Irr is viewed as the average annual rate of return that investors earn…
There are three Golden rules of accounts are as follows: 1. Debit the receiver , Credit the giver 2. Debit what comes in, Credit what goes out. 3. Debit all expenses and losses , Credit all incomes and gains. Let…
Petty Cash Book is prepared to record small payments such as telegram, taxi fare , cartage and stationery etc. In a business house a number of small payments such as for telegrams, taxi fare , cartage etc. have to be…
Cash transactions are straight way recorded in the cash book & on the basis of such record ledger accounts are prepared. What is Cash Book? All cash transactions are recorded in the cash book. All transactions in cash book have…
Classification/Types of accounts in accounting i.e. accounts are classified into two categories personal or impersonal accounts. Impersonal accounts can be further sub-divided into real or nominal accounts. Lets understand meaning of account in brief. Accounting means system of classifying, summarizing…
Contingent liabilities means possible obligation arising from past events and may arises in future depending on occurrence and non-occurence of one or more uncertain future events. In other words contingent liabilities are potential liabilities that may or may not occur…
What is accrual concept in accounwting? Accrual concept means effects of transaction and events are recorded on mercantile basis i.e. when they occur ( not as cash or cash equivalent is received or paid). Further they are recorded in accounting…