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IAS 7 statement of cash flows question answers position 2013 2012 Retained earnings Rs. Rs. General...

IAS 24 Related Party Disclosure Questions and Answers help companies to properly show RPT transaction...

There is a complete guide on Property, Plant and Equipment in IAS 16. The treatment is same both under...

As the name suggests, Sale and Leaseback transactions involve both sale and lease transactions at the...

Held to Maturity Investment is debt securities which is kept under control till the time of its maturity...

1.In Trail balance, debit side should be ____ to credit side. Equal Less than Greater than 2.Trial...

1.Labour efficiency variance is a part of Material variance Labour variance Overhead variance 2.Efficiency...

1.Rate variance is a part of Material variance Labour variance Overhead variance 2.Rate variance...

We have covered maximum stock level in great detail in our previous post. As we know, in order to get...

1.A statement which summarizes cash inflow and outflow is referred to as: Income statement Balance...

Profitability Ratio is a very good metrics to calculate the entity’s strnegth in generating profit...

1.Accounting errors can be classified into ______ types: One Two Three Four 2.When the transaction...

In inventory management, maximum stock level plays a vital role for planning and decision making. Without...

Factoring is a term used in connection with accounts receivable. It refers to a situation where the actual...

We have covered Bank Reconciliation Statement in great detail. Now, it is the time to do some quizzes...

1.Which one of the following is a fundamental accounting concept? Fair value concern Going concern None...

We have covered Adjusting Entry topic in great depth. Now, it is the right time to practice more to gain...

Stock Valuation Via Dividend Growth Model Stock Valuation Via Supernormal Growth Rate

Cash discount is the term quite common in sales made to customers on credit terms. As we know that very...

Commercial Banks offer numerous services to their clients and as such different types of accounts are...

1.Accrued expenses are: Assets Liabilities Equity 2.Prepaid insurance is shown in: Profit &...

Financial ratios are the best tools to analyze the performance of a company. There are so many ratios...

If the entity takes out money more than the balance available in the bank account, the bank balance goes...

1.Cash book is a book of: Original entry Specialized journal Income & expenditure 2.Cash...

We have covered in detail about Endorsement in our previous post. Now, it is the time to pour...

Salary means any amount received by the employee from its employer and includes: Pay, wages Allowances...

Master Budget is a collection of all lower level budgets and provides a great route to the management...

When the assets, property or name of someone is used by another person to earn revenue, this is called...

Payroll is a major element of cost in organizations especially the manufacturing one. So, it is not an...

Inventory is a vital part of trading and manufacturing companies. That is why, it is necessary to have...

Standard Costing is often described as estimated future cost because it is set before undertaking any...

Break Even Analysis is done to estimate how much company should sell to meet its total cost. It means...

Relevant Cost is an important concept in management accounting. It is one over which decisions are made...

Throughput Accounting is a different approach in management accounting as it treats only the...

In Activity Based Costing (ABC), the entity identifies the activities which are responsible for...

MCQS (Multiple choice questions) are integral part of exam papers. These Quizzes provide valuable knowledge...

1.The main objective of Cost accounting is to ascertain the financial position on a particular date. False True 2.Job...

Minimum stock plays a key role in the inventory management. That is why, entities perodically review...

So far we have read about financial ratios but in a uniform costing we use numerous cost accounting...

Though, there are numerous cost accounting methods & practices. But in order to compare various units...

Store ledger is a type of ledger which is maintained in costing department. It is like a reconciliation...

Bin card is the statement of all the receipts and issue of the stock from the store department. It is...

In order to keep the ordering cost and carrying cost under control, a maximum level of stock is determined....

In order to avoid any halt in the production process, there is a strong need to maintain a minimum level...

Danger level as the name suggest, is the point where normal issue of materials or inventories are stopped...

When a new item of inventory is ordered for purchase, it involves three types of costs which are acquisition...

Re-Ordering Level It is the level at which new purchase requisition is initiated by the store keeper...

Financial accounting accumulates various types of costs into broad account. But this is not good for...

Practical Difficulties in Installing a Cost Accounting System There is no doubt that cost accounting...

In industries where similar types of products are produced, the process costing is the best cost accounting...

Sometimes, it happens that during the same production activity, more than one product get created. Under...

Mostly, marginal costing is used for decision-making process. But the decision maker should keep in mind...

Marginal costing is regarded as the key tool to make well-informed decisions in a manufacturing sector....

The absorption costing is no doubt a good system of costing the product but it has few drawbacks as well...

Absorption cost is a worldwide accepted cost accounting method. It has associated advantages which are...

It is an utterly different cost accounting method. Under this method, we do not pay attention to the...

As we have discussed for planning purpose, we need to estimate the overhead absorption rate (OAR) at...

Planning and control are the backbones of any cost accounting system. It provides the foundation through...

It is one of the most popular cost accounting systems used by the entities to calculate the cost of the...

Cost accounting is a wide subject in which various methods are used according to the nature of the business...

In a manufacturing concern, various costs are incurred which have different characteristics. By classifying...

Cost accounting scope is very wide. However, this has been described under three headings as follows: Budgeting In...

The main objectives or purpose of cost accounting are as follows: 1. Cost accounting is used to prepare...

Cost accounting and financial accounting are two different branches of accounting. In order to understand...

Deferred tax is the very important topic in financial accounting. It arises due to differences in tax...

Events After the Balance Sheet Date is an important term used in financial accounting and refers to those...

Financial analysis is a broad topic and involves the calculation of various types of financial ratios....

Join venture is a contract between more than one parties to carry on an economic operation or activity...

In order to qualify the entity as a subsidiary, the required percentage of shareholding is more than...

Associates are the companies over which the other company has significant influence in such a way...

When there are multiple companies exist under the common control, there is a need to consolidate them....

In order to record revenue, there is a specific accounting standard called IAS 18 Revenue Recognition....

By Construction Contracts, we mean the contract to build or develop the asset or combination of...

Branch is any company or office located at some distance from the head office of the company. This...

As the installment sales involve profit-earning over a long period of time. The accountant uses two different...

Installment sales is a term used to describe a sale that is done on a deferred payment option. This is...

Amalgamation is a type of business arrangement in which two or more entities are merged to form a new...

Absorption of Company is a way of business arrangement in which an existing company takes over the business...

Capital reduction and reconstruction is a way to reduce the capital amount of the company. Within the...

A lease is a contract between the lessor and the lessee in such a way that lessor transfer to the...

Reserve and funds are the two different items in the financial accounting and as such, they are treated...

Work Sheet is an important tool to make adjustment in the unadjusted trial balamnce. As a result, adjusted...

Partner is an arrangement in which two or more persons agree to share in the profits of the company....

Voucher system is an important tool to summarize all the cash expenditures in the entity. No matter for...

Current asset is a term used to describe the assets from which the entity expects to receive future economic...

1.Financial statements are mainly made for: Internal users External users Customers of the company Internal...

In preparing the financial statements, the accountant may do some types of errors which is called accounting...

In order to prepare financial statements, sometimes the management of the entity has to use its best...

Financial statements are prepared over the basis of accounting principles. So, it is the entity’s responsibility...

On the face of balance sheet, income statement, statement of cash flows and statement of changes in equity,...

Management Discussion and Analysis is denoted by MDA and is a part of annual report. This is an...

Statement of changes in equity is an important financial statement that shows movements in shareholder’s...

As we have discussed in previous articles the cash flow statement consists of three components: Operating,...

As we have discussed in previous articles that cash flow statement consists of three components: Operating,...

It is also called cash flow statement and is one of the main financial statements. Unlike income statement,...

In order to prepare cash flow statements, there are two options to present the cash flow from operating...

In order to prepare cash flow statements, there are two options to present the cash flow from operating...

Extra ordinary items are losses or profits that arises from activities that are of unusual and infrequent...

Companies that are earning net income, often distribute this to their shareholders in the form of dividends....

Income statements should represent income from continuing operations and discontinue operations to give...

This is the method of income statement in which expenses are grouped according to their functions or...

This is the method of preparing income statement according to the nature of expense. Here, we accountant...

The income statement only shows up revenues that have been realized. So, in order to show up the unrealized...

In an organization, various products are manufactures or services are offered. In a big entity, operations...

It is one of the two most popular income statement preparation methods. The other method is the single-step...

It is one of the most simple and easy to prepare income statement format. In this approach, we sum up...

The balance sheet is an extended representation of the standard accounting equation. It represents the...

The income statement is the term used to define a financial statement component that calculates the profit...

Double-entry accounting is a method of recording accounting transactions in such a way that one account...

In order to record transactions in financial accounting, the accountant has to make debit and credit...

In order to generate revenue from business operation, the cost incurred is called the expense. It is...

When an entity sells services or products to customers, it records revenue. The point to be noted here...

The interest of the owners in the assets of the entity is termed as equity. In the case of an entity...

Liability is the obligation of the entity which it needs to pay to settle its debts. When the obligations...

Assets in any item from which economic benefits could be derived by an entity. It is the property of...

Some accounting transactions are done repetitively and as a result, if we directly post these transactions...

Subsidiary ledgers are the detailed register or records which provide details about the main general...

The Contra account is the opposite of the normal account which is presented in the balance sheet. Normally,...

In order to record the transaction in accounting, accountant needs a storage point. T – Account serves...

Purchase journal is like a register which records all the credit purchases. In most of the businesses,...

In conducting, numerous types of transactions take place on a daily basis. But, transactions which can...

As it is clear from the name of the topic, when we expand the standard accounting equation further, it...

Accounting equation is the basis of double entry system of accounting. In double entry accounting, we...

Journal is like a register where accountant records all the financial transactions in a debit and credit...

Chart of Accounts is the list of all general ledger accounts which enables the recording of double entry...

We have covered in great details various Accounting Principles. Now it is the time to do some quiz about...

Comparability is also an important accounting principle. It requires that financial information...

Consistency Concept has fundamental importance in the preparation of financial statements. According...

Understandability concept is one of the qualitative accounting principles. This concept requires that...

Prudence concept is a fundamental accounting principle which requires the accountant to record the expenses and liabilities as...

In order to present true and fair view of the financial statements, accountants need to reflect transactions...

Materiality is one of the main accounting principles and has a vast effect in the preparation of the...

Relevance and reliability are the two main accounting principles. By relevance we mean the information...

Matching principle is one of the fundamental accounting concepts and has great importance as well. It...

Accounting transactions are recorded on the date when they incur. So, they remain reflected on the value...

Full disclosure principle requires that financial statement must disclose all the material information...

Revenue Recognition Principle states that revenue should only be recognized when the risk and rewards...

Companies are setup to run for the long term business operations. But as far as the reporting of financial...

Monetary unit assumption is a concept which requires that accounting transactions and relationships can...

Going Concern Concept is the basic concept behind the preparation of financial statements. Every year,...

In accounting, we treat business and the owners two different person. This is we called as Business Entity...

Accrual accounting is one of the basic accounting principle and is followed all over the world. According...

Reversing entries are the important journal entries in the accounting. It actually helps a...

Trial balance is a simple list of all the balance of the ledger accounts. Usually trial balance is prepared...

Post closing trial balance is just like an adjusted trial balance but the major difference is that it...

Ledger Accounts and Posting to Ledger Accounts Ledger accounts are the T accounts. The data are posted...

Journal Entries Journal entries are a way to record financial transaction. It simultaneously records...

Compound Journal Entry Compound entry or compound journal entry is the combination of two or more simple...

Closing Entries Closing entries are the tool to close the temporary accounts and are passed to transfer...

Adjusting Entries Adjusting entries are passed in order to comply with accrual basis of accounting. This...

Adjusted Trial Balance As we have discussed that you cannot prepare accounts on the basis of unadjusted...

Income Summary Account Income summary account is a temporary account and is used to transfer out balances...