Accounting

Definition: Assets refers to the resources of economic value which are owned and controlled by a business entity, owing to events in the past, which are expected to generate monetary benefit in future. In the balance sheet, assets appear in the second part, i.e. after equity and liabilities. Classification of Assets Assets are classified into two major categories, i.e. … [Read more...] about Assets

Definition: Petty Cash Book is a ledger book, which is used to record petty cash expenses formally in chronological order, with the date. For this purpose, a petty cashier is appointed by the firm, to pay for small payments (usually below Rs. 200) and keep a record of the same. Petty cash implies a small amount of cash in hand, with the petty cashier, who uses the amount to … [Read more...] about Petty Cash Book

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, as per the requirement. Significance … [Read more...] about Bank Reconciliation Statement

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 standards … [Read more...] about Kaizen Costing

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. The type of inventory depends on the nature of the … [Read more...] about Inventory

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 account is T-shaped, having … [Read more...] about Ledger

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 to the Ledger, in the concerned accounts. When … [Read more...] about Journal

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 auditor, to check their … [Read more...] about Financial Statement

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 the statement. The balances of all the assets, … [Read more...] about Trial Balance

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 … [Read more...] about Management Accounting