Accounting

What is a Joint Venture? Joint ventures are short-term business endeavours that two or more people undertake together and share earnings and losses in a predetermined ratio. If no agreement is made on the division of earnings or losses, they are distributed equally among all parties. Joint venturers are appropriate when there are constraints that […]

What is Semi-Variable Cost? Those costs that include the element of both fixed cost and variable cost are semi-variable costs. In short, these costs are partly fixed and partly variable in nature. These are a kind of mixed or hybrid costs. The alternate term for semi-variable cost is semi-fixed cost. Such costs neither vary proportionately […]

What is Responsibility Accounting? An accounting system of control whereby assignment of responsibility for controlling costs. In this evaluation of the performance of various heads or managers takes place. This is based on effectiveness in the achievement of predetermined targets set for divisions and departments, for which they are responsible. It involves the collection and […]

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 […]

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 […]

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 […]

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 […]

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 […]

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 […]

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 […]