Inventory Accounting

"Thinking outside the box" when such practice is not permitted. Creative accounting is actually a good description of the practice, as it tends to create a picture, which is not technically correct from the perspective of the information's intended user.

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.

1) Recording

2) Classifying

3) Summarizing

4) Interpreting

Accounting Departments are usually structured along functional lines: Accounts Payable, Accounts Receivable, Payroll, General Ledger, Sales Transactions, Inventory, etc. A small company may have one person performing more than one (sometimes all) of the functions. In this case, there needs to be financial controls to reduce the probability of theft or embezzlement. In a large company, there could be many people working in one functional area; and in that case, that function might be broken down to smaller components.

1) Manual records are very difficult to be maintained safe

2) Manual records are subject to greater human error

3) Business can see itself in fines and penalties if records are lost

4) Manual records are easier to be falsified, modified, altered, or vanished, as compared

to computerized records, which become very safe when using passwords, firewalls, and back-ups.

A method of accounting wherein the financial report of the subsidiary reflects the parents cost incurred in acquiring the sub.

Ratios place significant emphasis on short-term results. Ratios such as EPS and the ROCE are subject to accounting conventions that might deter businesses pursuing policies that are in their long-term interest.

The elements of accounting are Assets, Liabilities, and Owner Equities.

The way to remember this would be through the acronym ALOE

The accounting equation is Assets = Liabilities + Owners' Equities

Assets = Liabilities + Owners Equity

There are total of 9 accounting standards.

Accrual Accounting refers to the recording of financial transactions once an economic event has happened and it is not based on the movement of cash.

For example, in Accrual Accounting if you have office rent of $1000 per month, you would record the expense of $1000 each month, regardless if you have actually paid the rent or received an invoice from the property owner.

Most individuals live our daily lives in the cash basis of accounting. We get our paychecks we have revenue, when we pay our car note we have expense.

Mutual fund sub accounting is a way to "clear" (the process of buying and selling) the mutual fund transactions. An intermediary record keeps all of the individual shareholder account information, such as the individual balances and individual transactions and dividends in each fund. The account balances roll up to match an omnibus account balance that is record kept by the transfer agent of the fund. When individual investors buy or sell a particular fund those transactions the intermediary combines those transactions and a minimum number of larger trades are placed with the fund in the omnibus account.

Source documents are those documents in which all kinds of business transactions are recorded. These include invoice, sales order, purchase order, debit note, credit note, goods received note; goods dispatched note, quotation, statement, remittance advice, and receipt.

★ Economic Entity Assumption

★ Going Concern Assumption

★ Monetary Unit

★ Periodicity Assumption

The interlocking accounting is a system where the cost and financial accounts are maintained independently of each other, and in the cost account, no attempt is made a separate record of the financial account transaction.

Threre are 3 types of golden rules in accounting:

1)personal accounting

2)real accounting

3)Nominal accounting

1.personal accounting refers to individuals or organisation or companises the rule of personal accounting debit the reciever credit the giver

2.real accountinf refers to tangible and intangible assets the rukle of real accounting debit what comes in credit what goes out.

3.Nominal accounting refers to all expenditure and income the rule of nominal accounting debit all expenses/losses credit income/gains

Peachtree Accounting is the name of a computerized accounting software program.