There are seven branches of accounting:- a) Financial Accounting: This is called original accounting, which is mainly confined to the preparation of financial statement for the various concern parties and financial institutions. b) Cost Accounting:…

A ledger is a book or database in which double-entry accounting transactions are stored or summarized. A subsidiary ledger is a ledger designed for the storage of specific types of accounting transactions. Once information has been…

A cost constraint is a situation in which the cost of a good or service can negatively impact the decision to purchase said good or service   In accounting, a cost constraint arises when it…

The cash turnover ratio is used to determine the proportion of cash required to generate sales. The ratio is typically compared to the same result for other businesses in the same industry to estimate the…

A trial balance worksheet is a multi-column spreadsheet that contains the ending balances of all general ledger accounts used by a business. The worksheet is useful for converting ending account balances into financial statements if…

Fixed charges are overhead costs that are not closely associated with activity levels. That is, these costs will likely be incurred by a business even if there are greatly reduced sales. Fixed Charges are any…

Cost management is the control of actual or forecasted costs incurred by a business.  Cost management is the process of effectively planning and controlling the costs involved in a business. It is considered one of…

Inventory analysis is the examination of inventory to determine the optimum amount to keep on hand. Traditionally, this has been done by balancing the costs of ordering and holding inventory (known as the economic order…

Gross margin is the difference between revenues and the cost of goods sold, which leaves a residual margin that is used to pay for selling and administrative expenses. Gross Margin is a company’s total sales revenue…

Coverage ratios are used to evaluate the ability of a business to meet its debt obligations. These ratios are most commonly used by lenders and creditors to review the finances of a prospective or current…