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Nov 17
A comparison between the financial accounting and management accounting may have differences in its respective field. The basic differential points are as follows: In financial accounting, financial statements are mainly meant for outsiders such as shareholders, debenture holders, creditors, and government agency. On the other hand, in management accounting necessary statements are prepared mainly for …
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Sep 24
Financial statements are mainly prepared for external reporting purposes. General purpose of financial statements are intended to meet the needs of users who are not in a position to demand reports tailored to meet their specific information needs. Financial statements provide information about the financial position, performance and cash flows of an enterprise that is …
Permanent link to this article: http://icabtutorial.com/what-are-the-objectives-of-financial-statements/
Sep 23
Transfer pricing refers to the unit price assigned to goods and services that one segment transfers to another segment within the same company. Accountants use transfer prices for purpose other than inventory costing. Regardless of the transfer price in effect, consolidated financial statements still show the unit production cost computed according to generally accepted accounting …
Permanent link to this article: http://icabtutorial.com/what-are-the-aims-of-a-transfer-pricing-system/
Sep 18
Intangible assets are identifiable non-monetary assets without physical substance. An asset is a resource that is controlled by the entity because of past events for example, purchase or self-creation and from which future economic benefits are expected. A research and development project acquired in a business combination is recognized as an asset at cost, even …
Permanent link to this article: http://icabtutorial.com/what-is-intangible-assets/
Sep 18
Advantages of Uniform Costing Improvement of operational efficiency: Through the exchange of information by members, each member is in a position to measure his efficiency and cost against the industry’s standard. Uniform costing is a tool for control by comparing own performance with those of others participating in the group. In this way it helps to improve …
Permanent link to this article: http://icabtutorial.com/what-are-the-advantages-and-disadvantages-of-uniform-costing/
Sep 18
Goodwill is defined as the future economic benefits arising from assets that are not capable of being individually and separately recognized. Goodwill is the difference between the value of a business as a whole and the aggregate of the fair values of its separable net assets. Goodwill may exist because of any combination of number of possible …
Permanent link to this article: http://icabtutorial.com/accounting-treatment-for-goodwill/
Sep 18
The objective of financial statements is to provide information about the financial position, performance and changes in financial position of an entity that is useful to a wide range of users in making economic decisions. Qualitative characteristics are the attributes that make the information provided in financial statements useful to users. The four principal qualitative …
Permanent link to this article: http://icabtutorial.com/qualitative-characteristics-of-financial-statements/
Sep 18
The financial statement user has access to a wide range of data sources in the analysis of financial statement. The beginning point should always be the financial statement themselves and notes to the financial statement. Financial statement provides the major information as required by the financial analyst at the time of converting financial information into …
Permanent link to this article: http://icabtutorial.com/sources-of-information-for-financial-statement-analysis/
Sep 17
Financial accounting is concerned with reports to owners, creditors, bankers, Securities and Exchange Commission, registrar of joint stock companies, govt. agencies and others outside of the company. Managerial accounting is concerned with reports prepared for the internal managers’ use of management. Since managerial accounting is internal reports, there is no requirement that management accounting reports …
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