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APPLICATION IN ACCOUNTING THEORY

With this book, the author makes a point and then that’s it; you have to figure out what it all means. All related costs are deferred until completion and then matched to revenues. Accountants are also playing a key role in recommending their own clients to migrate to QuickBooks. After 90 years it currently sits more than 26,000 members and students across 64 countries and is ranked in the top professional accounting bodies in the world (“Institute of Public Accountants”). Nearly thirteen years back, the International Institute of Business Analysis(IIBA) was established in Canada. Australia is a signatory to the Madrid Agreement on the International Registration of Marks. Further good news for the small business owner is the affability of the software along with how it can save you valuable money moving forward. Express Accounts is professional business accounting software, perfect for small businesses needing to document and report on incoming and outgoing cash flow including sales, receipts, payments and purchases.

What sets them apart is their stance and use of different equity accounts. Other applications have many uses in business, including their use for accounting purposes. These characteristics or qualities of information are the ingredients that make information useful and the qualities to be sought when accounting choices are made. Note: Under par value method we start with the assumption of retiring such shares, therefore, when the treasury shares are actually retired, the treatment is fairly simple. 1. On repurchase of own shares, debit the treasury stock account for the par value and not the cost of reacquisition. • Installment receivables and deferred gross profit account are kept separately because gross profit rate may vary from year to year (selling and administrative expenses are excluded in computing the gross profit rate). The matching principle requires that the revenues be matched with the expenses so long as it is possible to do so.

Direct Costs: Expenses that include labor costs and materials. The main abuse of SSAP related to the treatment of extraordinary items, particularly redundancy, reorganization and restructuring costs. There are also other challenges in dealing with for instance exchange rates, interest rates and transfer pricing where treatment of such aspects may be considered differently in different countries. •If installments are receivable beyond one year, it should be recorded at the present value of the payments discounts at the market rate of interest. 4. When treasury shares are resold, credit the treasury stock account at par value and credit or debit APIC – Treasury Stock for the remainder. 1. At the time of reissuance/sale of treasury stock, credit the treasury stock account for the cost of shares. Cost Reduction and Profit Maximization:- Accounting system delivers the reports timely and accurately. It is a less complicated method than the par-value method where an entity considers purchase of treasury stock as a temporary reduction in stockholders equity and not as retirement of shares.

Though, this method is based on results, it does not reflect the current performance and inter-period comparability is weighed down. • The seller does not have any impending requirement for future performance to result in resale of the product by the buyer. • The buyer has paid the seller or the buyer is required to pay the seller and the commitment to pay is not reliant on resale of product. • As a consequence of pilfering, spoilage or mutilation of product, the buyer’s commitment to seller would be unaffected. • Recognized proportionately during contract as a percentage of completion. Under Completed Contract method, contract revenue and profit are recognized at completion of contract. Calculating accounting rate of return helps an entrepreneur or businessman to estimate the worth of the projects he/she has undertaken and whether investments are worth pursuing or not. Audit helps to increase goodwill of the firm. In addition, the audit committee also identified mateiral weakness in the Company’s internal control.