Tag Archives | Notes

Contributories: Meaning, List and Problems

The below mentioned article provides a brief note on contributories, explained with the help of suitable illustrations. Meaning of Contributories: According to Section 428 of the Companies Act, 1956, a contributory is “every person liable to contribute to the assets of a company in the event of its being wound up, and includes a holder […]

Quick Notes on Du Pont Chart | Accounting

The Du Pont Company of US pioneered a system of financial analysis which has received widespread recognition. As a useful tool for financial analysis, it has been adopted by many firms in some form or the other. The earning power, represented by return on capital employed, shows the combined effect of the net profit margin […]

Profitability Ratios and it’s Categories | Accounting

The profitability of the firm is also measured in relation to investments. The term investment may refer to total assets, capital employed or the owners’ equity. The efficiency of an enterprise is judged by the amount of profits. But sometimes the conclusion drawn on the basis of profit-to- sales ratios may be misleading. Because it […]

Administration Overhead | Overheads Accounting

The below mentioned article provides a note on administration overhead. According to ICMA Terminology, Administrative overhead is defined as “the sum of those costs of general management and of secretarial accounting and administrative services, which cannot be directly related to the production, marketing, research or development functions of the enterprise.” The administration cost is incurred […]

Notes on Scrap | Materials

The below mentioned article provides a note on scrap. Scrap is the residue material that has a recovery value. It is incidental residue from the materials used in manufacturing operations which is recoverable and measurable without processing. Accounting of Scrap: The accounting treatment of scrap is based on the following considerations: (a) If the value […]

Notes on Defectives | Materials

The below mentioned article provides a note on defectives. Defectives represent the part of production that does not meet dimensional or quality specifica­tions of a product but which can be reworked by additional application of material, labour and/ or processing and made it into saleable condition either on first or seconds depending upon the characteristic […]

Notes on Spoilage | Materials

The below mentioned article provides a note on accounting and control of spoilage. Meaning of Spoilage: Spoilage is the production that fails to meet quality or dimensional requirements and these are so damaged in manufacturing operations that they are not capable of rectification economically and hence taken out of the process and disposed off without […]

Production Overhead | Accounting

The below mentioned article provides a note on production overhead. The production cost is inclusive of all direct material, direct labour, direct expenses and manufacturing expenses. The manufacturing expenses is inclusive of all indirect materials, indirect labour and indirect expenses concerned with manufacturing activity which starts with supply of materials and ends with primary packing […]

Accounting Notes on Waste | Materials

The below mentioned article provides a note on waste. Meaning of Waste: Waste is a material loss during production or storage due to evaporation, chemical reaction, unrecoverable residue, shrinkage etc., wastage may be visible or invisible wastage. Wastage may be normal waste incidental to manufacturing activities or abnormal waste which is in excess of material […]

Du Pont Analysis | Financial Management

The below mentioned article provides a note on du pont analysis. The Du Pont company of USA has introduced a system of financial analysis which has received a wider acceptance. The Du Pont Chart is a chart of financial ratios, which analyses the net profit margin in terms of asset turnover. The Du Pont analysis […]

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