Accounting

Definition: In the general sense, the budget is described as a precise statement, representing a financial estimate of income and expenditure of the government for a certain period. In cost accounting, budget means a quantitative statement, prepared before a particular period to serve as an estimate of future receipts and disbursements. The integrated process of preparing, … [Read more...] about Budget

Definition: In Double entry system, due to its dual aspect, every transaction affects two accounts, one of which is debited and other is credited. To record the transactions in the journal, in a sequential way, certain rules are required, and these rules are called as Golden Rules of Accounting. Types of Account To understand the golden rules of accounting, one should know … [Read more...] about Golden Rules of Accounting

Definition: Cost Sheet, as the name signifies, is a periodical statement that reflects a detailed overview of the cost incurred on various components during the process of production. It is used to determine the cost of a cost object, i.e. product, service, or a cost unit. Specimen of Cost Sheet Cost Sheet helps in the classification and analysis of the cost components of a … [Read more...] about Cost Sheet

Definition: The accrual concept is one of three basic accounting concept, others are going concern and consistency. As per this concept, the recognition of the transactions and events as and when they arise, i.e. on mercantile basis, rather than on cash basis in which the transaction is recorded in the books of accounts when the cash is received/paid against it. In business … [Read more...] about Accrual Concept

Definition: Depreciation is the reduction in the utility of the fixed asset like plant & machinery, furniture & fixtures, vehicles, buildings, etc. because of obsolescence through technology or market conditions, natural wear and tear, the passage of time, exhaustion of subject matter and so on. Depreciation is a measure which calculates loss in the value of the … [Read more...] about Depreciation

Definition: Cash Flow Statement refers to an Analytical Reconciliation Statement, which shows the changes in the position of cash and cash equivalents between two periods. In addition to this, it emphasizes the reasons for such movement of cash. Cash equivalents are those investments which are short term as well as highly liquid in nature, that can be easily transformed into … [Read more...] about Cash Flow Statement

Definition: The Paid-up Capital refers to the amount that has been received by the company through the issue of shares to the shareholders. Simply, the money injected into the firm by the shareholders in exchange for the shares purchased by them is called the paid-up capital. The Paid-up capital can be equal to or less than the authorized capital, since, the company may … [Read more...] about Paid-up Capital

Definition: The Issued Capital refers to the number of shares issued by the company to the shareholders. In other words, the shares allotted or subsequently held by the shareholders is called the issued capital. The Issued capital represents that part of an authorized capital, which a company is authorized to sell through the shares. A company can either sell all its shares … [Read more...] about Issued Capital

Definition: The Authorized Capital is the maximum amount of capital that a company can raise through the issue of shares to the shareholders. In other words, the capital amount with which a company is registered with the registrar of the company (as stated in the article of incorporation) is called the authorized capital. Thus, authorized capital is the limit to which the … [Read more...] about Authorized Capital

Definition: The Aging Schedule is a tabular representation of all the bills and invoices along with their respective ages, i.e. the date on which these become due. Simply, all the bills receivables and bills payable are classified along with their date of maturity, to keep a check on which payment or receivable is behind its due date and by how many days. The ranks are … [Read more...] about Aging Schedule