Category Financial Accounting

All topics related to Financial Accounting.

Gross Margin Method

Under this method, we estimate the ending figure of the closing inventory based on the gross profit percentage. In this approach, we assume that the gross profit % remains constant during the reporting period. This method is also known as…

Bank Reconciliation Statement

The balance as per bank statement and the bank balance in the ledger accounts differ in most cases. That is why; there is a need to reconcile the difference between two sets of balances. There are plenty of reasons for…

Held to Maturity Investment

Held to Maturity Investment is debt securities which is kept under control till the time of its maturity date. Please keep in mind that equity securities have no maturity date, so they may not be treated as Held to Maturity Investment.…

Earning Per Share EPS

Earning Per Share is a market value measure and is considered one of the important financial ratio. It is denoted by the symbol EPS. It is calculated by dividing the net profit after tax which is available to the ordinary…

Standard Price Method

Under this method, we calculate a pre-determined price, and this price is kept constant for a definite time period. In this method of inventory valuation, we post all receipts into the stock ledger account and sales/ issues are valued at…

Cash Flow Hedge

There may be changes in the cash flows associated with liability, asset and probable forcast transaction. In order to mitigate the risk of such type of changes, we use the term Cash Flow Hedge. In other words, we can say that it is…

Purchase of Interest Method

This is a private method of acquiring the existing partner’s interest in the firm. Whenever a new person wants to become a partner, he or she negotiates with the existing partner and pays him outside the firm any amount agreed…

Trial Balance MCQS Question And Answer

1.In Trail balance, debit side should be ____ to credit side. Equal Less than Greater than 2.Trial balance is prepared by: Accountant Auditor Sales Manager 3.The objective to prepare trial balance is to check accuracy of: Balance sheet Profit &…