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The measurement of erosion in the monetary value of an asset over a while due to its regular use, wear, and tear, or obsolescence is known as depreciation. It has been defined under Accounting Standard-6 as “a measure of the wearing out, consumption or other loss of value of a depreciable asset arising from use,…
Advantages of Marginal Costing The following are the principal advantages of marginal costing: 1) Simple to Use and Understand Marginal costing method is straightforward and handy to use. Since this technique excludes ongoing costs and uses only variable fees, the value statements are clean to apprehend and put in force. 2) Avoids Under-Absorption of Overhead…
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The term ‘marginal cost’ is derived from a crucial financial concept of ‘margin”. However, the economic concept of ‘margin’ isn’t like accounting. In the following article, you will know the applications and objectives of marginal costing. As a financial concept, marginal price is the charges incurred for generating an additional product unit. At the same…
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Cash Flow Statement As Per AS-3 The Accounting Standard-three (AS-3), referring to the Cash Flow Statement, issued by the Institute of Chartered Accountants of India’ (ICAI) Carlice, was revised in the year 1997. Further, regarding the commands issued by the Securities and Exchange Board of India (SEBI), indexed agencies must furnish a replica of Cash…
Cash flow statements shows the inflows and outflows of cash from the company. In the following sections, you will know the advantages and disadvantages of cash flow statement. Advantages of Cash Flow Statement Preparation and analysis of cash go with the flow statement have the following benefits: 1) It allows measurement of the enterprise’s capacity…
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Cash is a critical element of any commercial enterprise entity because it plays an important role in the entire lifetime of a business agency. In the following section, you will know the objectives of cash flow statement. ‘Cash for a ‘Business’ has been aptly compared to the ‘Blood’ for a ‘Human Body”. Cash’ is required…
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Specific gadgets require changes on the time of instruction of “Funds Flow Statement“. Adjustment of Funds Flow Statement Some such objects are as follows: 1) Provision for Taxation Usually, a ‘Current Liability’ like a “Provision for Taxation” wishes to be proven inside the declaration of adjustments in the running capital. However, the treatment for provision…
Application of finances is a part of the fund go-with-the-flow declaration. It shows specific packages (uses) of a business enterprise’s capital. Some examples of programs/uses of working capital are dividend bills to shareholders, buying of new capital property/equipment, free of taxes, and many others. Applications/Uses of Funds Flow Statement The finances can carry out inside…
Business transactions, which result in a boom in working capital, are ‘Sources of Funds’. ‘Issue of New Shares/Debentures’, ‘Raising of Loans’. ‘Depreciation on Fixed Assets’, ‘Profits, and so forth are several examples of ‘Sources of Funds’. Sources of Funds This has been presented below, observed by an in-depth description of each object of Sources of…
The Funds Flow Statement is a monetary announcement that comprehensively reviews the price range movement within an enterprise over a specific length. It is an essential tool for analyzing the modifications in an enterprise’s financial role and know-how of the assets and uses of budget. Here, you will know the advantages and disadvantages of funds…
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