Let us make an in-depth study of the meaning and computation of the rebate on bills discounted. Meaning of Rebate on Bills Discounted: Rebate on Bills Discounted is also known as Discount Received in Advance, or, Unexpired Discount or, Discount Received but not earned. Its treatment is same as we do in the case of […]
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The following points highlight the seven principal accounting policies. The accounting policies are: (1) General (2) Transactions Involving Foreign Exchange (3) Investments (4) Advances (5) Fixed Assets (6) Staff Benefits and (7) Net Profit. Accounting Policy # 1. General: The accompanying financial statements have been prepared on the historical cost basis and conform to the […]
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Let us make an in-depth study of the interest on doubtful debts and its treatment. When a loan is granted to a customer, interest is charged on such loans at the prescribed rate by the bank. Now the question arises before us: When the realisation of such loan is doubtful at the end of the […]
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Let us make an in-depth study of the concept, advantages and disadvantages of slip system of ledger posting. Concept of Slip System: It is a method of rapid posting in books maintained under Double Entry principle. Under this system, posting is done from slips and not from journals or cash books. Slips are loose leaves […]
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Life Insurance: Meaning, Provisions and Types! Meaning of Life Insurance: A life insurance contract may be defined as a contract whereby the insurer, in consideration of a premium, paid either in lump-sum or in periodical instalments, undertakes to pay an annuity or a certain sum of money, either on the death of the insured or […]
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The following article will update you about the difference between single account system and double account system. Difference # Single Account System: 1. Only one Balance Sheet is prepared which contains assets and liabilities. 2. The purpose of preparing accounts is to show the financial position of a firm at a particular date. 3. Depreciation […]
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Let us make an in-depth study of the meaning, features, advantages and disadvantages of double account system. Meaning of Double Account System: The Double Account System is a method of presenting the annual final accounts/annual financial statements of public utility undertakings, like Railways, Electricity, Gas, Water Supply, Tramways etc. These undertakings are usually incorporated under […]
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Let us make an in-depth study of the revised forms of balance sheet and profit and loss account. On 18.1.1991 the Government of India has issued a notification to make amendments to the Third Schedule to the said Act incorporating and considering the recommendations of Ghosh Committee (A. Ghosh, the then Deputy Governor, RBI) relating […]
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This article will guide you about how to prepare final accounts of life insurance. Preparation of Final Accounts of Life Insurance: The preparation of final accounts must be made in accordance with the provisions of the Insurance Act, 1938, together with its prescribed forms. The Insurance Act, 1938, is not only applicable to General Insurance, […]
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The below mentioned article provides a close view on the replacement of an asset under double entry system. Under Single Account System, when a new asset is replaced in place of an old one, the old asset is written-off and the new one is capitalised. But under Double Account System, the procedure is quite different. […]
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Let us make an in-depth study of the meaning and preparation of final accounts in the case of General Insurance. Meaning of General Insurance: It has already been stated earlier that the general insurance is subdivided into: (i) Fire, (ii) Accident; and (iii) Marine. Therefore, a general insurance company is to prepare separate revenue account […]
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The following points highlight the four components in preparation of final accounts under double account system. The components are: (1) Revenue Account (2) Net Revenue Account (3) Capital Account and (4) General Balance Sheet. Component # 1. Revenue Account: It corresponds with the ordinary Profit and Loss Account (prepared under Single Account System) where the […]
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Let us make an in-depth study of the eleven schedules in prescribed forms of accounts of electricity supply company. Prescribed Forms of Accounts: Every electricity supply company is required to submit to the State Government (or to its nominee which is the State Electricity Board) certain statistical statements in the prescribed form according to Rule […]
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This article throws light upon the two set of objectives to achieve organisational goals. The Objectives are: 1. Task-Oriented Objectives 2. Non-Task Objectives. Achieving Organisational Goals # 1. Task-Oriented Objectives: Organisations that are in business to make a profit are largely interested in purchasing at the lowest possible price. But they do not want to […]
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Read this article to learn about the advantages of centralised purchasing. In addition to MRP and JIT, there is a growing tendency towards centralisation of purchasing. Important differences in buying behaviour occur between centralised and decentralised purchasing functions. When purchasing is centralised, purchasing specialists concentrate their attention on selected items, developing extensive knowledge of supply […]
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This article throws light upon the three possible types of Organisation of Materials Department. The possible types are: 1. Organisation by Function 2. Organisation by Location 3. Organisation by Product. Materials Department Type # 1. Organisation by Function: This generally means that the organisation is based on specialisation. Such an organisation chart is shown below: […]
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Read this article to learn about Inventories:- 1. Features of Inventories 2. Functions of Inventories 3. Classification 4. Types. Features of Inventories: An effective inventory control system has four essential features: 1. A sound materials plan controls quantities ordered, order dates and reorder dates in coordination with changes in specifications due to product or production […]
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This article throws light upon the five steps to be followed for importing materials. The steps to be followed are: 1. Sanction at foreign exchange 2. Selecting foreign suppliers 3. Placing letter of intent and formal purchase order 4. Payment for release of the shipping documents for clearance 5. Transportation of the materials to the […]
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Read this article to learn about Stock Verification:- 1. Purpose of Stock Verification 2. Methods of Stock Verification 3. Reconciliation. Purpose of Stock Verification: Physical stock verification which involves actual counting, measuring, weighing of all items in stock is necessary for the following four reasons: (a) To support the value of stock shown in the […]
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Read this article to learn about Issuing Materials:- 1. Basic Requirement of Issue of Materials 2. Methods of Issue of Materials. Issue of Materials # Basic Requirement: Since large sums of money remain blocked in materials, it is essential for the custodian of materials to ensure that the issue of materials are made only […]
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