principles and practice of cost accounting pdf

(An exception is certain investments in stocks and bonds that ultimate are actively traded on manual a stock exchange.) If you want to security know the drag current value of a company's crack long-term assets, you will not get this information from a company's financial statementsyou need to look elsewhere.
Professional judgement is needed to decide whether an powerpoint amount is insignificant or immaterial.
Book value : patch Total assets, without the tactics inclusion of intangibles such as goodwill, minus total liabilities.
Price/earnings (P/E) ratio : tactics The relationship ultimate between the selling price of a company's common stock to the company's annual profits per share.Because of this basic accounting principle, it is assumed that the dollar's purchasing power has not changed over time.On the income statement for the year ended December 31, 2017, the amount is known; but for the income statement for the three months ended March 31, 2018, the amount was not known and an estimate had to be used.Inventory : Goods ready to be sold, raw materials, and partially completed goods that will be sold.And although variations may exist, we can make reasonably confident conclusions when comparing one company ultimate to another, or comparing one company's financial statistics to the statistics for its industry.Prepaid expenses : The cost of goods or services already convert paid for but not yet fully used or consumed.The current ratio shows a company's financial solvency.The materiality guideline allows this company to violate doctor the matching principle and to expense the entire cost of 150 in the year it is purchased.Current assets : Cash, accounts receivable, securities, inventory, and any other assets that can be converted into ultimate cash within one year or during the normal course of business.They include accounts payable, notes payable, accrued expenses such as wages and salaries, taxes payable, and the portion of long-term debts due within one year.For example, potential losses from lawsuits will be reported game on the financial statements or in the notes, but potential gains will not be reported.intangible assets : Business assets that are not material in nature, which have been created through time and effort.Goodwill : Goodwill is based on a company's reputation and relationships with customers, vendors and the community, and its participation in trade-related activities.As an example, let's say a company is named in a lawsuit that demands only a significant amount of money.Created by, findLaw's team of attorney writers and editors.The following is a list of the ten main accounting principles and guidelines together with a highly condensed explanation of each. For example, sales commissions expense should be reported in the period when the sales were made (and not reported in the period when the commissions were paid).
Matching Principle This accounting principle requires companies to use the.
The quick ratio shows a company's liquidity, and helps determine whether a business can meet its obligations in hard times.