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Accounting INVOLVES the CREATION of financial RECORDS of business transactions, flow of FINANCE, the process of creating wealth in an organization, and summarizing the financial position of a business at a given MOMENT in time.

Accounting involves the creation of financial records of business transactions, flow of finance, the process of creating wealth in an organization, and summarizing the financial position of a business at a given moment in time.

• RECORDING.
• CLASSIFYING.
• SUMMARIZING.
• INTERPRETING.

It is removing ITEMS from the income statement or balance sheet that do not normally OCCUR during the course of business to BETTER estimate the value of a COMPANY.

It is removing items from the income statement or balance sheet that do not normally occur during the course of business to better estimate the value of a company.

YES, the accounting calculates the cost of capital to the business. It compares the current, expected, and historic rates of return. SUPPOSE a company is making 12% RETURNS but borrowing money by using the owner’s credit card at 22% be good to know that.

Yes, the accounting calculates the cost of capital to the business. It compares the current, expected, and historic rates of return. Suppose a company is making 12% returns but borrowing money by using the owner’s credit card at 22% be good to know that.

FOLLOWING are DIFFERENT branches of ACCOUNTING:

• Cost Accounting.
• FINANCIAL Accounting.
• Management Accounting.

Following are different branches of accounting:

EA stands for Enrolled Agent. It is a CERTIFICATION by the Internal Revenue Service given to those qualified to PRACTICE before them. To become an EA, one must PASS a test given by the IRS, the purpose of which is to try to ensure that only qualified people practice before the IRS. You may not be a POWER of Attorney for the IRS unless you are an EA or some other certified individual such as a CPA or an attorney.

EA stands for Enrolled Agent. It is a certification by the Internal Revenue Service given to those qualified to practice before them. To become an EA, one must pass a test given by the IRS, the purpose of which is to try to ensure that only qualified people practice before the IRS. You may not be a Power of Attorney for the IRS unless you are an EA or some other certified individual such as a CPA or an attorney.

Cost ACCOUNTING is concerned with cost accumulation for INVENTORY valuation to meet the REQUIREMENTS of external reporting and internal profit MEASUREMENT. Management accounting relates to the provision of appropriate information for decision-making, planning, CONTROL and performance evaluation.

Cost accounting is concerned with cost accumulation for inventory valuation to meet the requirements of external reporting and internal profit measurement. Management accounting relates to the provision of appropriate information for decision-making, planning, control and performance evaluation.

Demonstrate your knowledge of this cycle - the LENGTH of TIME it takes the company to pay its accounts payable - and what the implications of the length of this cycle are for the company, for example cash FLOW.

Demonstrate your knowledge of this cycle - the length of time it takes the company to pay its accounts payable - and what the implications of the length of this cycle are for the company, for example cash flow.

• INCOME STATEMENT.
• Statement of OWNER’s Equity/Retained Earnings.
• Balance SHEET.
• Statement of Cash Flows.

Record REVENUES when EARNED and expenses when INCURRED regardless of CASH FLOW .

Record revenues when earned and expenses when incurred regardless of cash flow .

• ASSETS.
• EXPENSES.
• Withdrawals/Drawings/Dividends.

• LIABILITIES.
• CAPITAL/Retained Earnings/Contributed Capital.
• REVENUES.

To make USE E4X with Mozilla and Mozilla based browsers (like: Netscape) we used SPIDERMONKEY JavaScript engine. It has been extended to implement E4X but PRESENTLY we can only use it in NIGHTLY trunk builds. The present releases Mozilla 1.7 suite, Firefox 1.0, Netscape 7.2 does not SUPPORTED E4X.

To make use E4X with Mozilla and Mozilla based browsers (like: Netscape) we used Spidermonkey JavaScript engine. It has been extended to implement E4X but presently we can only use it in nightly trunk builds. The present releases Mozilla 1.7 suite, Firefox 1.0, Netscape 7.2 does not supported E4X.

• ASSETS.
• LIABILITIES.
• OWNER’s Equity/Retained Earnings/Contributed CAPITAL.

REVENUES, EXPENSES.

Revenues, Expenses.

To update the OWNER’s CAPITAL account (Retained EARNINGS).

To update the Owner’s Capital account (Retained Earnings).

To ensure ACCOUNT balances properly reflect results of BUSINESS OPERATION.

To ensure account balances properly reflect results of business operation.

To transfer the TEMPORARY account BALANCES to the Owner’s CAPITAL account.

To transfer the temporary account balances to the Owner’s Capital account.

Liability.

Liability.

Contra-Asset.

Contra-Asset.

Asset.

Asset.

Contra-Asset to ACCOUNTS RECEIVABLE.

Contra-Asset to Accounts Receivable.

The BPMN specifies a graphical notation for EXPRESSING business processes in a Business PROCESS DIAGRAM. Both technical users and business users are SUPPORTED for business processes using BPMN. BPMN provides a standardized, simple means of process information communication to other business users, customers, SUPPLIERS and process implementers.

The BPMN specifies a graphical notation for expressing business processes in a Business Process Diagram. Both technical users and business users are supported for business processes using BPMN. BPMN provides a standardized, simple means of process information communication to other business users, customers, suppliers and process implementers.

ORACLE BPEL Process Manager is a BPEL engine. It is a member of Oracle Fusion MIDDLEWARE family of products. Orchestration disparate applications and web services are enabled enterprises by Oracle BPEL Process Manager. Quick BUILDING and deploying this processing ability in a standards-based manner DELIVERS critical functionality for developing SOA.

Oracle BPEL Process Manager is a BPEL engine. It is a member of Oracle Fusion middleware family of products. Orchestration disparate applications and web services are enabled enterprises by Oracle BPEL Process Manager. Quick building and deploying this processing ability in a standards-based manner delivers critical functionality for developing SOA.

The exact DETAILS of business processes can be specified by executable processes. These can be EXECUTED by orchestration engine. An executable process is used in most CASES of BPEL. The public message exchange among parties is only allowed by abstract business process. The internal details of process FLOWS do not include and are not executable.

The exact details of business processes can be specified by executable processes. These can be executed by orchestration engine. An executable process is used in most cases of BPEL. The public message exchange among parties is only allowed by abstract business process. The internal details of process flows do not include and are not executable.

Orchestration:
The control over the web services that are involved and coordinating the execution of different operations on the web services invoked in the operation is taken by the CENTRAL process in orchestration as per the requirements. The involved web services are unaware of this process. With operations that are explicitly defined and the order of invocation of the web services, the orchestration is centralized.

Choreography:
Choreography does not rely on a central coordinator. The web services involved in the choreography is aware exactly the execution of its operations and whom to interact with. Choreography is a collaborative effort. It focuses on messages exchange. The awareness of business process, operations to execute, messages to exchange, and the time of MESSAGE exchange are NEEDED for all participants of choreography.

Orchestration:
The control over the web services that are involved and coordinating the execution of different operations on the web services invoked in the operation is taken by the central process in orchestration as per the requirements. The involved web services are unaware of this process. With operations that are explicitly defined and the order of invocation of the web services, the orchestration is centralized.

Choreography:
Choreography does not rely on a central coordinator. The web services involved in the choreography is aware exactly the execution of its operations and whom to interact with. Choreography is a collaborative effort. It focuses on messages exchange. The awareness of business process, operations to execute, messages to exchange, and the time of message exchange are needed for all participants of choreography.

BPEL is a language for relatively simple description of how WEB SERVICES are composed into business processes. BPEL is the first of its kind.

• Allows abstract and executable processes.
• Gained support by Majority of companies.
• Allows software to exist and similar processes can be executed and developed.

BPEL is a language for relatively simple description of how web services are composed into business processes. BPEL is the first of its kind.

BPEL is process-CENTRIC, where as workflow foundation is human centric. BPEL web SERVICES based language for business process BEHAVIOR which can be used for composite web services, where as workflow foundation is a programming MODEL for quickly building workflow enabled applications which are user interface-centric.

BPEL is process-centric, where as workflow foundation is human centric. BPEL web services based language for business process behavior which can be used for composite web services, where as workflow foundation is a programming model for quickly building workflow enabled applications which are user interface-centric.

Business Process Execution Language is a language that is executable for interaction specification ALONG with WEB services. The PROCESSES of BPCL will EXPORT and import INFORMATION by utilizing exclusively web service interfaces.

Business Process Execution Language is a language that is executable for interaction specification along with Web services. The processes of BPCL will export and import information by utilizing exclusively web service interfaces.

A CASH Flow Statement is SIMILAR to the Funds Flow Statement, but while preparing funds flow statement all the current assets and current LIABILITIES are TAKEN into CONSIDERATION.

A Cash Flow Statement is similar to the Funds Flow Statement, but while preparing funds flow statement all the current assets and current liabilities are taken into consideration.

The technique of zero base budgeting PROVIDES a solution for overcoming the limitations of traditional budgeting by enabling TOP management to focus on priorities, key areas and ALTERNATIVES of ACTION throughout the organization.

The technique of zero base budgeting provides a solution for overcoming the limitations of traditional budgeting by enabling top management to focus on priorities, key areas and alternatives of action throughout the organization.

A BUDGET is a PLAN expressed in QUANTITATIVE, USUALLY monetary term, covering a specific period of time, usually one year.

A budget is a plan expressed in quantitative, usually monetary term, covering a specific period of time, usually one year.

RELATIONSHIP between FINANCIAL and operating LEVERAGE: In business TERMINOLOGY, leverage is used in two senses: Financial leverage & Operating Leverage.

Relationship between financial and operating leverage: In business terminology, leverage is used in two senses: Financial leverage & Operating Leverage.

Capital structure decisions AIMS at determining the types of FUNDS a company should seek to finance its INVESTMENT OPPORTUNITY and the preparation in which these funds should be raised.

Capital structure decisions aims at determining the types of funds a company should seek to finance its investment opportunity and the preparation in which these funds should be raised.

Classification of Turnover/Activity/Performance Ratios:

• Capital Turnover Ratio
• Fixed Assets Turnover Ratio
• Working Capital Turnover Ratio
• STOCK Turnover Ratio
• DEBTORS Turnover Ratio
• Debt COLLECTION Period

Classification of Turnover/Activity/Performance Ratios:

A relationship between VARIOUS ACCOUNTING figures, which are connected with each other, expressed in MATHEMATICAL terms, is called accounting RATIOS.

A relationship between various accounting figures, which are connected with each other, expressed in mathematical terms, is called accounting ratios.

Ratio analysis is one of the TECHNIQUES of financial analysis to evaluate the financial condition and performance of a business CONCERN. SIMPLY, ratio means the comparison of one FIGURE to other relevant figure or figures.

Ratio analysis is one of the techniques of financial analysis to evaluate the financial condition and performance of a business concern. Simply, ratio means the comparison of one figure to other relevant figure or figures.

Direct Material Price Variance:
It is that PORTION of the direct material cost variance which is due to the difference between the STANDARD price SPECIFIED and the actual price PAID.

Mathematically:
DMPV = Actual Quantity x (Standard price- Actual price)
If the actual price is more than the standard price, the variance would be adverse and vice versa.

Direct Material Usage or Quantity Variance:
It is caused due to the difference between the standard quantity specified (for the output achieved) and the actual quantity used.

Mathematically:
DMUV = Standard rate x (Standard quantity for actual output - Actual quantity).

Direct Material Price Variance:
It is that portion of the direct material cost variance which is due to the difference between the standard price specified and the actual price paid.

Mathematically:
DMPV = Actual Quantity x (Standard price- Actual price)
If the actual price is more than the standard price, the variance would be adverse and vice versa.

Direct Material Usage or Quantity Variance:
It is caused due to the difference between the standard quantity specified (for the output achieved) and the actual quantity used.

Mathematically:
DMUV = Standard rate x (Standard quantity for actual output - Actual quantity).

A VARIANCE is the difference between the actual cost and standard cost. If the EFFECT of the variance is to increase the profit, the variance is said to be FAVORABLE. In the reverse CASE, it is adverse or UNFAVORABLE.

A Variance is the difference between the actual cost and standard cost. If the effect of the variance is to increase the profit, the variance is said to be favorable. In the reverse case, it is adverse or unfavorable.

The margin of safety represents the difference between the sales at break-even point and the TOTAL sales. It can be expressed as a percentage as well as in value. The size of the margin of safety shows the strength of the business. If the margin of safety is small, it may indicate that the firm has large fixed EXPENSES and is more vulnerable to changes in sales. In other words, if the margin of safety is large a slight FALL in sales may not AFFECT the business very MUCH but if it small even a slight fall in sales may adversely affect the business.

The margin of safety represents the difference between the sales at break-even point and the total sales. It can be expressed as a percentage as well as in value. The size of the margin of safety shows the strength of the business. If the margin of safety is small, it may indicate that the firm has large fixed expenses and is more vulnerable to changes in sales. In other words, if the margin of safety is large a slight fall in sales may not affect the business very much but if it small even a slight fall in sales may adversely affect the business.

Profit is the most important measure of the firm’s performance. In the free-market economy, profit is a guide for allocating RESOURCES efficiently. An analysis of the EFFECTS of various factors on PROFITS is an essential step in the financial planning and decision-making. The ANALYTICAL technique used to study the behavior of profit in response to the changes in volume, costs and PRICES is called the cost-volume-profit (CVP) analysis.

Profit is the most important measure of the firm’s performance. In the free-market economy, profit is a guide for allocating resources efficiently. An analysis of the effects of various factors on profits is an essential step in the financial planning and decision-making. The analytical technique used to study the behavior of profit in response to the changes in volume, costs and prices is called the cost-volume-profit (CVP) analysis.

1. It is difficult to classify costs exactly into fixed and variable. Most of the expenses are neither totally variable nor WHOLLY fixed.
2. Contribution itself is not a GUIDE unless it is linked with the key factor
3. Sales staff may mistake marginal cost for total cost and sell at a price, which will RESULT in loss or LOW profits. Hence, sales staff should be cautioned while GIVING marginal cost.
4. Overheads of fixed nature cannot altogether be excluded particularly in large contracts while valuing the work-in-progress. In order to show the correct position fixed over heads should be included in work-in-progress.
5. Some of the assumptions regarding the behavior of various costs etc., are not necessarily true in a realistic situation. For example, the assumption that fixed cost will remain static throughout is not correct.

1. The marginal cost remains constant per unit of output whereas the fixed cost remains constant in total. Since marginal cost per unit is constant from period to period within a short span of time, firm decisions on PRICING policy can be taken.
2. Overheads are recovered in marginal costing on the basis of pre-determined rates. If fixed overheads are included on the basis of pre-determined rates, there will be under-recovery of overheads if production is less or if overheads are more.
3. Advocates of marginal costing argue that under the marginal costing technique, the stock of finished goods and work in progress are carried on marginal cost basis and the fixed expenses are written off to profit and loss account as period costs.
4. Marginal costing helps in carrying out break-even analysis, which shows the effect of INCREASING or decreasing production ACTIVITY on the profitability of the company.
5. Marginal costing helps the management in TAKING a number of business decisions like make or buy, discontinuance of a particular PRODUCT, replacement of machines, etc.

MARGINAL costing is a special technique used for managerial decision making. The technique of marginal costing is used to PROVIDE a basis for the interpretation of cost data to measure the profitability of different products, processes and cost centers in the course of decision making. It can, therefore, be used in CONJUNCTION with the different methods of costing such as JOB costing, process costing etc., or even with other techniques such as standard costing or BUDGETARY control.

Marginal costing is a special technique used for managerial decision making. The technique of marginal costing is used to provide a basis for the interpretation of cost data to measure the profitability of different products, processes and cost centers in the course of decision making. It can, therefore, be used in conjunction with the different methods of costing such as job costing, process costing etc., or even with other techniques such as standard costing or budgetary control.

The TECHNIQUE of marginal costing is CONCERNED with marginal cost. The Institute of Cost and Management Accountants, LONDON, has defined Marginal Cost as "the amount at any given volume of output by which aggregate costs are changed if the volume of output is increased or decreased by one unit". Therefore, Marginal Cost refers to increase or decrease in the amount of cost on ACCOUNT of increase or decrease of PRODUCTION by a single unit. Marginal Cost ordinarily is equal to the increase in total variable cost because within the existing production capacity an increase of one unit in production will cause an increase in variable cost only.

The technique of marginal costing is concerned with marginal cost. The Institute of Cost and Management Accountants, London, has defined Marginal Cost as "the amount at any given volume of output by which aggregate costs are changed if the volume of output is increased or decreased by one unit". Therefore, Marginal Cost refers to increase or decrease in the amount of cost on account of increase or decrease of production by a single unit. Marginal Cost ordinarily is equal to the increase in total variable cost because within the existing production capacity an increase of one unit in production will cause an increase in variable cost only.

The break-even POINT is the point or state of a BUSINESS at which there is neither a profit nor a LOSS. In other WORDS, it is at this point where the contribution is equal to fixed EXPENSES.

The break-even point is the point or state of a business at which there is neither a profit nor a loss. In other words, it is at this point where the contribution is equal to fixed expenses.

MARGINAL costing is a special technique USED for managerial decision making. The technique of marginal costing is used to PROVIDE a BASIS for the interpretation of cost data to measure the profitability of different products, processes and cost centers in the course of decision making.

Marginal costing is a special technique used for managerial decision making. The technique of marginal costing is used to provide a basis for the interpretation of cost data to measure the profitability of different products, processes and cost centers in the course of decision making.

Absorption COSTING technique is also termed as Traditional or Full Cost Method. ACCORDING to this method, the cost of a product is DETERMINED after considering both fixed and variable COSTS. The variable costs, such as those of direct materials, direct LABOR, etc. are directly charged to the products, while the fixed costs are apportioned on a suitable basis over different product manufactured during a period.

Absorption costing technique is also termed as Traditional or Full Cost Method. According to this method, the cost of a product is determined after considering both fixed and variable costs. The variable costs, such as those of direct materials, direct labor, etc. are directly charged to the products, while the fixed costs are apportioned on a suitable basis over different product manufactured during a period.

A Cost STATEMENT or Cost SHEET is "a document which provides for the assembly of the DETAILED Cost of a Cost Center or Cost Unit".It is a detailed statement depicting the subdivision of cost arranged in a LOGICAL order under DIFFERENT heads.

A Cost Statement or Cost Sheet is "a document which provides for the assembly of the detailed Cost of a Cost Center or Cost Unit".It is a detailed statement depicting the subdivision of cost arranged in a logical order under different heads.

These types of costs are not recorded in the books of ACCOUNTS. These costs are not actually incurred but are considered while making a decision. For EXAMPLE, in accounting, interest and rent are RECOGNIZED only as expenditure when they are actually paid. But in costing they are charged on a NOTIONAL basis while ascertaining the COST of a product.

These types of costs are not recorded in the books of accounts. These costs are not actually incurred but are considered while making a decision. For example, in accounting, interest and rent are recognized only as expenditure when they are actually paid. But in costing they are charged on a notional basis while ascertaining the cost of a product.