Month: February 2021

METHODS OF REMUNERATION  Fixing Wage Rates Wage rates may be fixed by individual agreement between employer and employee, or more commonly by collective bargaining between trade unions and employers’ associations. An employer may pay wages on an hourly basis, per Read More …

 INTRODUCTION AND DEFINITIONS You have so far in your studies learned how cost accounting differs from financial accounting, how we can set up double entry cost accounts, how expenditure can be categorised into cost elements, and the nature of these Read More …

INTRODUCTION As we saw earlier in this study unit, costs can be divided either into direct and indirect costs, or variable and fixed costs. Direct costs are variable, that is the total cost varies in direct proportion to output.  If, Read More …

THE ELEMENTS OF COST The expenditure we are considering in our cost accounting is, of course, the same expenditure (subject to certain considerations which will be mentioned) as that which is dealt with in the financial accounts.  It is merely Read More …

NATURE AND FUNCTIONS OF COST ACCOUNTING  What Is “Cost Accounting”? The Chartered Institute of Management Accountants, in its publication, “Terminology of Management and Financial Accountancy”, defines cost accounting as: “…. that part of management accounting which establishes budgets and standard Read More …

 INTRODUCTION International Public Sector Accounting Standards (IPSASs) Recent years have seen ongoing efforts to codify a set of accounting standards that can be applied specifically to the public sector. Most of these have focused on variations of private sector accounting Read More …

GENERAL A manufacturing account is prepared in addition to the trading and profit and loss accounts.  It is produced for internal use, mainly for the owners and managers of organisations. DIVISION OF COSTS Costs in a manufacturing business are divided Read More …

GENERAL Accounting ratios provide a useful basis on which to review a company’s performance from its accounts.  The essence of the approach is to measure company performance by a criterion, which takes account of the profit generated by the company, Read More …

OBJECTIVE The objective of IAS 7 is to require an entity to provide information about the historical changes in cash and cash equivalents by means of a cash flow statement.  Cash flows are classified into: Operating Activities Investing Activities Financing Read More …

INCOME AND EXPENDITURE ACCOUNTS INTRODUCTION Clubs, societies, credit unions and other non-profit organisations do not draw up Statement of Comprehensive Income s; instead they prepare an INCOME AND EXPENDITURE ACCOUNT. Where income is greater than expenditure the excess is referred Read More …