Meaning : It is the aggregate of indirect material,indirect labour and indirect expenses which cannot be identified with particular job, product or cost centre. Classification of overheads By function Production overheads Administration overheads Selling overheads Distribution overheads By behavour Fixed overheads Variable overheads Semi variable overheads By element Indirect labour Indirect material Indirect expenses Classification […]
Accounting for labour cost Labour is a essential factor used in the process of production arise from human resources. It can be classified in two parts Direct and indirect Tailor, carpenter etc it is a part of prime cost Indirect labour Such cost can not be identified with per units of production Time keeping department […]
income under head salary Free domestic servant provided by employer : Watchman, sweeper or Gardner provided by employer – cost incurred by employer will be vlue of perquisite. Gas, electricity and water supply provided by employer owned by employer- manufacturing cost purchase by employer -market price or purcahse cost Note : If unfurnished or […]
It is contract between a company and other party, if public will not subscribe issued shares or debentures, underwriters will purchase. They can charge commission in case of debentures up to 2.5% and shares 5%. Marked applications: If name of underwriter is shown by applicant against which he is applied known as a marked application. […]
Accounting for material cost Term material related to all commodities supplied to undertaking it can be direct or indirect Advantages Effective control in costly items Save time for non important items Optimum investment is possible Minimum total cost High inventory turn over Re order quantity or economic order quantity: No of units ordered is treated […]
Single entry Incomplete accounting records means at present it is not maintained on the basis of double entry system or records are lost due to fire, theft etc. Although all records are lost but bank statement, cross ledger from creditors And debtors will be available. Statement of affairs (balance sheet before adjustment) 1 Ascertain closing […]
Bonus shares: Shares issued by company free off, it means without consideration to existing shareholders. It is a capitalization of free reserves. Free reserve means not for specific purpose, profit available for dividend, like profit and loss account, general reserve etc. it excludes unrealized gain like revaluation reserves. There are two types of bonus shares: […]
Redemption of preference shares Redemption of preference shares Meaning Preference shares: priority in payment of dividend and capital at the time of liquidation. Redemption means repayment of capital Provisions of companies Act (section 55 ) for redemption of preference shares: Only fully paid up preference shares can be redeemed Redemption is possible out of free […]
dissolution of firm best summary notes Dissolution of firm Meaning Dissolution of relationships between partners along with termination of business. At the time of dissolution, all assets will be realized and liabilities should be repaid. For dissolution following accounts will be prepared. 1 realization account 2 partners capital account 3 cash/bank account 1 realization account […]
Redemption of debentures When it is issued : Bank account debit To debenture account But when it is redeemed Debenture account debit To bank account But at the time of redemption fund may not be sufficient. Hence sinking fund investment will be Used. Journal entries Appropriation : Profit and loss appropriation account debit To debenture […]
