Tag Archives | Methods

Top 2 Methods of Accounting for Amalgamation

The following points highlight the top two methods of accounting for amalgamation. The methods are: 1. Pooling of Interests Method 2. Purchase Method. 1. Pooling of Interests Method: This method is followed in case of an amalgamation in the nature of merger. Under this method, the assets, liabilities and reserves of the transferor company are […]

Maintaining Cash Flow Statement

The following points highlight the top two methods for maintaining cash flow statement. The methods are: 1. Direct Method 2. Indirect Method. Cash Flow Statement: Method # 1. Direct Method: Under the direct method, cash receipts from operating revenues and cash payments for operating expenses are calculated and shown in the cash flow statement in […]

Top 7 Methods for Charging Depreciation

This article throws light upon the top seven methods for charging depreciation on assets. The methods are: 1. Fixed Installment 2. Diminishing Balance Method 3. Annuity Method 4. Depreciation Fund Method 5. Insurance Policy Method 6. Revaluation Method 7. Depletion Method 8. Machine Hour Rate Method. Method # 1. Fixed Installment: This is the oldest […]

Methods of Inventory Pricing

The following points highlight the generally accepted methods of inventory pricing, each based on a different Assumption of cost flow. 1. Cost Price Methods: (i) First-In, First-Out (FIFO): The FIFO method follows the principle that materials received first are issued first. After the first lot or batch of materials purchased is exhausted, the next lot […]

Top 6 Methods for Providing Depreciation | Cost Accounting

The following points highlight the top six methods of providing depreciation. The methods are: 1. Depreciation Based on Time Factor 2. Depreciation Based on Usage 3. Depreciation Based on Both Usage and Time Factors Joint Rate Method 4. Depreciation Based on Maintenance Factor 5. Considering the Revenue Earning Factor of the Asset 6. Revaluation Method. […]

Top 2 Methods of By-Products Costing

The following points highlight the top two methods of accounting of by-products. The methods are: 1. Non-Cost or Sales Value Methods 2. Cost Methods. 1. Non-Cost or Sales Value Methods: (a) Other Income or Miscellaneous Income Method: Accounting of by-products by this method is also inaccurate as there is a time lag between the sales […]

Top 3 Methods for Computation of Cost of Debt

This article throws light upon the top three methods for computation of cost of debt. The methods are: 1. Debt Issued at Par 2. Debt Issued at a Premium or at a Discount 3. Cost of Redeemable Debt. Method # 1. Debt Issued at Par: The method of computation for ascertaining cost of debt which […]

Methods for the Valuation of Excisable Goods

This article throws light upon the top two methods for the valuation of excisable goods.  Excisable Goods Valuation: Method # 1. First Method: It is used to determine the value on the basis of value of the comparable goods produced or manufactured by the same assessee or by any other assessee, after making reasonable and […]

Top 2 Methods of Pricing Materials | Cost Accountancy

The following points highlight the top two methods of pricing materials. The methods are: 1. Based On Cost Price 2. Average Price Method. Pricing Materials: Category # 1. Based On Cost Price: (a) Specific Price Method: Under this method the specific price of materials issued to a particular job is charged to the job. This […]

Top 3 Methods of Wage Payment | Cost Accountancy

The following points highlight the top three methods of wage payment. The methods are: 1. Time Rate Plan 2. Piece Rate 3. Incentive Wage Plans. Wage Payment: Method # 1. Time Rate Plan: The method which is related to the hours of work is known as Time Rate Plan. Under this method the worker is […]

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