The method of costing adopted, i.e. Job or process costing, should be suitable to the industry and serve the objectives of installing the system. A ready made costing system cannot be suitable for every business. The cost accounting system should be tailor made according to the requirement of a business. If a costing system is … Read more

There cannot be a ready-made costing system for every undertaking. In order to meet the special needs of a business a costing system has to be specially devised to give it a blend of efficiency and economy. The installation of a costing system requires a thorough study and understanding of all the aspects involved as … Read more

The benefit of routine checking is that there is accuracy of accounting books and records. The sub-totals, totals, cast and carry forward posting, balancing and transfer are stated as correct. Routine checking is useful to check frauds in the books of accounts. The responsibility lies on the head of management for location of fraud. The … Read more

Vouching is concerned with checking entries in the books of accounts with the help of vouchers. The accuracy of books of accounts is maintained through vouching. The entry is recorded and posted on the basis of vouchers only. Comparing of figures in entries and vouchers can help the auditor to locate errors. The location and … Read more

The job costing method, costs are collected and accumulated for each job, work order or project separately. Each hob can be separately identified; so it becomes essential to analyze the cost according to the each job. A job card is prepared for the each job for cost accumulation. This method is applicable to printers, machine … Read more

In unbounded media, communication devices communicate with each other through air or space using broadcast radio signals, microwave signals and infrared signals. Unbounded media is used where it is impossible to install cables. Data can be transferred all over the world. Some examples of unbounded media for communication are Microwave and Communication satellite. Microwave is … Read more

Email stands for Electronic Email. Email is the exchange of messages and files through Internet. Message can be in the forms of graphics, sounds, video clips or simple text. It is a fast way of sending messages anywhere in the world in a very short time. Every email account has unique address. An email address … Read more

Savings are the major determinant of capital formation savings are of two types. Personal savings refer to the amount saved by households, while business savings are the undistributed profits of the businesses. Personal savings form the major part of the total savings in a country. Capital market consists of stock exchanges, financial institutions, and investment … Read more

The path through which data is transmitted from one place to another is called channel. It is also known as communication media or transmission media. In bounded media, communications devices are directly connected with each other by using some physical media like wires. Some examples of bounded media for communication wire pairs, coaxial cable and … Read more

A utility program is a type of system software that is used that performs a specific task. It is normally used to solve the common problems of software and hardware. File viewer is used to view and manage files in computer system. All operating systems provide file viewers. Windows Explorer is an example of file … Read more

An examination of the meaning and definitions of cost accounting and management accounting indicates that the distinction between the two is quite vague. Some writers even consider these two areas as synonyms while others distinguish between the two. One point on which all agree is that two types of accounting do not have clear-cut territorial … Read more

Profitable and unprofitable activities are disclosed and steps can be taken to eliminate or reduce those activities from which little or no benefit is obtained or to change the method of production in order to make such activities more profitable. It provides information upon which estimates and tenders are based. In case of big contracts … Read more

Planning is thinking in advance i.e. Looking ahead and deciding in advance what to do, how to do it, when to do it and who is to do it. In planning, the management is concerned with laying down objectives and determining the courses of actions to be followed out of the several alternatives available to … Read more

Classification is the process of grouping costs according to their common characteristics. It is a systematic placement of like items together according to their common characteristics. Direct costs are those costs, which are incurred for, and conveniently identified with a particular cost unit, process or department. Cost of raw materials used and wages of machine … Read more

The term material may be defined as "anything that can be stored, stacked or stockpiled." It refers to all commodities that are consumed in the process of manufacture. Material is classified in direct material and indirect materials. Ni cost accounting system can become effective without proper and efficient control of material. This is so because … Read more

An ordering costing system is used in situations where many different products, or batches of products, are produced each period. Examples of industries that typically use job-order costing include shipbuilding, special-order printing, home building and furniture manufacturing. Job-order costing is also used in many service businesses, such as repair shops, advertising agencies, and law firms. … Read more

Cost accounting is generally considered as being applicable only to manufacturing concerns. This is not so. Its applications are in fact much wider. All types of activities, manufacturing and non-manufacturing, in which monetary value involved, should consider the use of cost accounting. Wholesale and retail business, banking and insurance companies, hotels, hospitals, schools, colleges, universities, … Read more

A letter of reply is one that is written in response to a letter of enquiry. The letters of enquiries and their replies are commonly written business letters. They are very important. If an enquiry is properly handled, it brings, through a reply, valuable business information. It may help save money and make profits. If … Read more

These terms are synonyms and convey identical meaning. An underdeveloped country is one in which per capita real income is low when compared with the real per capita income of the U.S.A., Canada, Australia and Western Europe. " Under developed countries are those which when compared with the advanced countries are under equipped with capital … Read more

A letter, which is written that to sell the goods or services. It is written in the way of the reader to persuade that what you are trying to sell whom he needs. Some products like books, magazines, rugs, furniture, clothing, medicines are directly sold to the consumers by means of letters. The letters are … Read more