Internal Control
Internal control is a process for assuring achievement of an organization’s objectives in operational effectiveness and efficiency, reliable financial reporting, and compliance with laws, regulations…
Accounting
Lower of cost or market (LCM)
Lower of cost or market (LCM) is an accounting rule for valuing inventory and, under certain conditions, securities holdings. Under the lower of cost or…
Internal Causes of Depreciation
Depreciation is the measure of wearing out of a fixed asset. All fixed assets are expected to be less efficient as time goes on and…
External Causes of Depreciation
Depreciation is the measure of wearing out of a fixed asset. All fixed assets are expected to be less efficient as time goes on and…
Determining inventory quantities
In a merchandising company, inventory consists of many different items. These items have two common characteristics: (1) they are owned by the company and (2)…
Last in, first out method (LIFO) method
Last in, first out method (LIFO) method is suitable when prices are rising because material will be issued from the latest consignment at a price…
First in, first out (FIFO) method
Companies must use First in, first out (FIFO) method for inventory if they are selling perishable goods such as food, which expires after a certain…
The limitations of a Trial Balance
A trial balance only enters the totals of credits against the total of debits. The fact that a trial balance tallies is only a basic…
Financial Statement
Financial Statements represent a formal record of the financial activities of an entity. These are written reports that quantify the financial strength, performance and liquidity…
Need for Providing Depreciation
Depreciation is a decrease in the price of an asset with the course of time, due in particular to wear and tear. All assets whose…
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