Purchase Requisition

What is Purchase Requisition? Purchase Requisition is defined as the duly approved written and formal request made by the store department, head of the department, or an authorized officer to the purchase department to procure specified material, supplies or equipment, of the stated description, desired quality, and quantity, within the given period. It is an […]

Period Cost

What is Period Cost? Period Cost can be defined as the items of costs that cannot be recognized with product or job, i.e. they are the costs charged against the revenue for the concerned accounting period and must be written off as expenses for the period in which they are incurred. In general, these are […]

Sunk Cost

What is Sunk Cost? Sunk Cost refers to the expenditure which is incurred before the time in question and the management has no control over it. It represents past expenditure on equipment or tangible productive resources, an intangible right or extended contract for service, whose value can be recovered when the asset is used throughout […]

Bin Card

What is Bin Card? Bin Card can be understood as a form of quantitative record maintained in a perpetual inventory system, by the company’s stores department. It indicates the particulars of materials kept in the bin. For each item, separate bin cards are maintained and placed in a specific place i.e. bins. Basically, a bin […]

Costing

What is Costing? Costing refers to the process and technique of determining costs. It involves analysis of the information so as to help management identify the cost of production and selling, i.e. the total cost of various products and services, as well as to understand how the total cost is created. Also see: Material Control […]

Material Control

What is Material Control? Material Control can be understood as a system that facilitates the availability of an adequate quantity of material with desired quality, at the right time and place, while preventing the needless blocking up of the company’s funds in stores. This is to maintain a continuous and timely supply of material while […]

Errors in Accounting

What are Accounting Errors? Accounting errors refer to the commission of errors while making an accounting entry that is unintentional, i.e. non-fraudulent in nature. To be specific, these are bookkeeping errors that need to be located and fixed, to ensure the true and fair view of the financial statements. Reasons for Errors in Accounting Carelessness […]

Types of Vouchers

As and when a transaction takes place, a certain document evidencing the same is created, which is called a source document, and one such source document is a ‘Voucher’. It is the written proof that the financial transaction has occurred and these are used to support the entries reported in the account books. Types of […]

Deferred Revenue Expenditure

What is Deferred Revenue Expenditure? Deferred Revenue Expenditure implies the expenditure incurred in the course of business during the current accounting period but the benefits arising out of it can be enjoyed over the years in the future. That is why, the total expenditure is written off in the subsequent number of years for which […]

Voucher

What is Voucher? A voucher implies a source document, generally prepared for the purpose of future reference that keeps a record of the ground on which the transaction took place. Hence, it acts as documentary evidence of that transaction as it backs the entries recorded in the journal. It must be noted that a transaction […]