Bank Reconciliation Statement

Definition: Bank Reconciliation Statement (BRS) refers to a statement which an entity prepares on a particular date to match the bank balance indicated in the cash book with the balance shown by the bank’s passbook, by displaying the reasons for differences between the two. The entity can prepare BRS any time during the financial period,…

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Kaizen Costing

Definition: Kaizen is a Japanese term which means “continuous improvement” on which Lean Manufacturing System is based. It refers to the continuous improvement and examination program constantly going on in the organization that stresses on the effective waste management, during the manufacturing process, as a result of which costs is further reduced below the initial…

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Inventory

Definition: The word ‘inventory’ refers to the collection of unsold goods ready for sale in the normal course of business. In finer terms, it implies the stock held by the business in the process of production to serve as a buffer, which ensures proper supply of materials and maintains the smooth functioning of the business.…

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Ledger

Definition: Ledger implies the principal books of accounts, wherein all accounts, i.e. personal, real and nominal are maintained. After recording the transactions in the journal, the transactions are classified and grouped as per their title, and so all the transactions of similar type into are put in a particular account. Format of Ledger A ledger…

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Journal

Definition: In the accounting world, Journal refers to a book wherein transactions are logged for the very first time, and that is why it is also called as “Book of Original Entry“. In this book, all the regular business transactions are entered sequentially, i.e. as an when they arise. After that, the transactions are posted…

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Financial Statement

Definition: Financial Statement are systematically maintained,¬†written summary of all the ledger account heads, exhibited in a way that it provides a clear view of the financial position, profitability and performance of the enterprise. These are prepared at the end of the accounting period, which is usually one year, after that it is audited by the…

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Trial Balance

Definition: Trial Balance refers to a schedule, in which the balances of all ledger books are assembled into debit and credit columns, to check the arithmetical accuracy of the entries posted in the ledger accounts. Trial Balance is a tabular statement, containing a specified date on which it is prepared, indicated at the top of…

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Management Accounting

Definition: Management Accounting refers to the application of professional knowledge, techniques and concept in preparing the accounting information in such a manner, which helps the management of the organization in the formulating plans and policies, controlling the operations of the organization, decision making, optimising the use of resources, disclosure to management and safeguarding assets. In…

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Balance Sheet

Definition: A Balance Sheet refers to the position statement, which lists out the balances of the assets, liabilities and owner’s equity, i.e. capital, of an enterprise at a specified date. While the assets show the resources owned by the company, liabilities and capital exhibits the funding of resources. Characteristics of Balance Sheet The preparation of…

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Accounting

Definition: Accounting is a process, which systematically and comprehensively records business events and transactions, and translate it into the financial information of the business entity to assist¬† the stakeholders in the decision-making process. In this process, the transactions are identified, recorded, arranged, summarized, simplified properly and then communicated to the interested parties. Generally Accepted Accounting…

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