Accounting Colleges in India

Accounting is a difficult field. Not everyone who wants to be an Accountant, manages to do so. Tremendous amount of hard work and constant study is a necessity. Getting into a good Accounting College augments your aim.
Delhi is the hub of all activities in the nation. It has quite a few good accounting institutions. Jagannath International Management School, International College of Financial Planning (offering PG Diploma in Financial Planning), VAG Info-tech Pvt. Ltd. (course in Accounts and Taxation), BLB Institute of Financial Markets (US certified Public Accounting Program), ICA- Certified Industrial Accountant, Institute of Computer and Finance Executives (courses in Certified Accounts Executive, Certified Finance Executive, Certified Account Executive, Finance Executive Programs), Scholar Classes Pvt. Ltd. offering CA and CPT, Computer Center for Management and Training (Advance Diploma in Financial Accounting), Sanjeev Varshney Classes (offering CA- CS), AKN Commerce Classes (CA-CPT), are good colleges to get admission into. You can also apply to the University of Delhi and the Amity University for accounting courses.
Kolkata also offers commendable opportunity to those deciding on a career in Accountancy. St. Xavier's College and Goenka College are much sort after institutes. Other good colleges are Indian Institute of Job Oriented Training (Finance), Heritage Academy, Bharatiya Vidya Bhavan, Eastern India Regional Council Of The Institute Of Chartered Accountants Of India, West Bengal Professional Education Course, and Eastern India Regional Council Of The Institute Of Chartered Accountants Of India. Students in West Bengal thus do not need to shift to any other part of the country as there are both study and job options available to them at home.
Mumbai too is a preferred location of Accounting Colleges in India. Malad Kandivali Education Society's Nagindas Khandwala College Of Commerce And Arts, Smt. P.D. Hinduja Trust's K.P.B. Hinduja College Of Commerce, Chikitsak Samuha'S S.S. & L.S. Patkar College Of Arts & Science And V.P. Varde College Of Commerce & Economics, Parle Tilak Vidyalaya Association's Mulund College Of Commerce, Parle Tilak Vidyalaya Association's M.L. Dahanukar College Of Commerce. Other colleges where you can seek admission are Shailendra Education Society's Arts, Science And Commerce College, Nirmala Degree College, Sterling College of Commerce, and B.M Ruia Girls College.
Bangalore today is the focal point of business in India. Undoubtedly the ambit of jobs here is multiple. So is the number of colleges extending accounting courses. The Bangalore Management Academy is a good choice. Other alternatives in Bangalore are the Christ College, C.B. Bhandari Jain College, B.H.S. First Grade College, Bangalore Branch Of S.I.R.C. Of The Institute Of Chartered Accountants Of India, Kristu Jayanti College, H.K.E.S. Sree Veerendra Patil Degree College Of Science, Dr. Ambedkar Degree Evening College, St. Joseph's College Of Commerce, Rajajinagar Education Society's Sri Aurobindo First Grade College For Women. There are a few others that include Seshadripuram Institute For Studies In Chartered Accountancy, Sri Bhagawan Mahaveer Jain College, and Sri Sai College. You can apply to any of these.
Few other institutes across the country have proven to be good Accounting Colleges. You should also consider them while making up your mind for applying. They are the ICFAI in Nagaland, the Gulbarga University of Karnataka and the Institute of Computer Accountants in Chennai.
Accountancy is a scope galore in the business calendar today. Accounting Colleges in India are thus competing to offer the best course structure and be the choice of students across the country. The job market in metros is a huge one, though other cities also require their services. The important thing is to qualify for a good accounting college, but the motive should be to remain focused and willing to take up the inherent challenge of the profession.

GAAP: Western Standards of US Accounting

GAAP are generally accepted Western standards of accounting and reporting, used in the U.S. and certain other countries. From English - General Accepted Accounting Principles (GAAP). GAAP standards regulate accounting treatment of certain practical situations in detail. Generally Accepted Accounting principles developed in the U.S. for independent accounting firms in an attempt to eliminate inconsistency in accounting for private companies and corporations.
International system of accounting represents widely used accounting standards developed by the Council of Financial Accounting Standards Board. They are used to standardize financial accounting of joint-stock companies. Common accounting principles (or GAAP) are "basic rules" of financial reporting. These principles provide general framework that defines information to be included in the report and the way this information should be presented. Phrase "generally accepted accounting principles" includes basic objectives of financial report, a number of concepts and a set of detailed rules.
It must be emphasized there is no complete list of generally accepted accounting principles. In fact, new accounting principles appear continuously, as firms engage in new forms of business activity.
GAAP standards
GAAP are based on a much larger number of developments. Therefore, American standards show a tendency to clearer regulation of all operations and less flexibility for individual company. The U.S. Board of Financial Reporting Standards signed an agreement with the Committee on International Financial Reporting Standards to eliminate differences between U.S. and international reporting systems. U.S. standards are used by many foreign companies to enter the U.S. market.
GAAP Programs
Domestic market GAAP programs appeared not so long ago. And, accordingly, there appeared different training GAAP programs. Most of them include the following stages:
1. Introduction to international accounting standards and reporting
2. Records in accordance with the concepts and standards of GAAP USA (Summaries & Status of FASB Statements - SFAS)
3. Records in accordance with the concepts and standards of GAAP UK (Summaries & Status of FRS Statements - SSAP).
4. Differences in national financial reporting requirements of international accounting standards IFRS - IAS.
In future, knowledge obtained at GAAP courses allow graduates conducting independent accounting and reporting of joint ventures and firms, filling out accounting forms, composing and protecting balance sheet.
Upon completion of GAAP training courses, graduates receive a standard certificate and can be employed in international financial institutions and joint business firms and companies in positions "GAAP, IAS accountant", "leading GAAP, IAS accountant assistant".
What else makes the whole book world reckoning with the US GAAP? Of course, this is carefully considered structure and depth of standards themselves. They are considered the most detailed guidance for virtually all industries, as well as accounting and reporting cycles.

For More Detail:

International Financial Accounting Standards Versus Generally Accepted Accounting Principals

International Accounting Standards (IAS)

International Accounting Tips & Software

An Overview Of IFRS Accounting

Accounting and financial reporting has been undergoing some changes in the recent years. This change is mainly brought about by the adoption of the IFRS accounting by companies from more than 100 counties all over the world. These 100 countries have been previously using the GAAP or the Generally Accepted Accounting Principles. After seeing the many advantages of using the accounting, these countries have abandoned the GAAP and are now using the IFRS.
IFRS accounting is a set of standards that are created by the IASB. Majority of these standards are previously known as International Accounting Standards or IAS. The IAS was used from 1973 to 2001 by the International Accounting Standards Committee or the IASC. In 2001, the IAS was incorporated into the IASB and this led to the creation of the new standards that is now called the IFRS. There are only a few countries left in the world who have not yet adopted the accounting. This does not mean that these countries are against the accounting. These few countries are just biding their time until they fully adopt the accounting in the next few years.
The IFRS accounting was created for the use of profit-based companies to help them in the formulation of accurate financial statements. These financial statements based on the accounting should contain complete data such as operational performance, cash flow, and financial standing. These data are proven to be very useful for the public, investors, lenders, management and employees of these companies.
A complete financial statement based on the IFRS accounting should contain a balance sheet and statements that contain information about the company's cash flow and income. The financial statement should also contain a statement of all the changes in the company's equity. All these data are very important in the decision-making process of the management as well as investors. These data can also be used to guide the decision of future investors as they decide on whether a certain company is a worthy investment or not. In the accounting, the policies of the company are also an important part of its financial statement.
There are a lot of benefits to adopting the accounting and one of them is that it provides more detailed information as compared to the GAAP. The IFRS accounting is also less complicated which makes it easy to use and provides a more detailed reporting. International and local investors also prefer financial statements that follow the accounting guidelines.

For More Information:

International Financial Accounting Standards Versus Generally Accepted Accounting Principals 

International Accounting Standards (IAS)

Financial Software Standards and Modules

Are you looking for financial software to record your daily accounting activities? Different companies have diverse accounting requirements that call for sophisticated software to incorporate these requirements. The financial accounting software has separate sections, popularly called modules, to handle specific areas in finance.
Financial Software Modules
Financial software typically comprises the following core modules:
Accounts payable: This module records the paid and outstanding bills. It also keeps track of other expenses.
Accounts receivable: All money received is entered into this module.
Ledger: All journal financial transactions are entered here.
Billing: It is used to produce invoices.
Inventory: This section keeps track of stock.
Purchase order: This section is used to order stock
Sales order: All customer orders for stock are recorded here.
Financial accounting software also features various non-core modules, such as electronic payment processing, payroll, timesheet, purchase requisition, expense, debt collection and reports.
Financial Software Standards: What is IFRS?
In 1973, International Accounting Standards Committee (IASC) was formed to standardize various country-specific accounting activities. Continued innovation and improvement in these standards resulted in the formation of International Financial Reporting Standards (IFRS). IFRSs were introduced in 2006 by The International Standards Board (IASB). IFRSs ensure the preparation and presentation of financial statements in compliance with the set standards and framework. As of 2009, over 100 countries have authorized the use of IFRSs. Major technology-oriented countries, such as Canada, the US, Japan and India, are also on the road to conversion to IFRSs.
Financial Software Standards: Implications of IFRS
It is a challenge to implement IFRS in everyday business accounting activities. This is because the conversion involves several technical issues and requires thorough business planning. Companies may be concerned about the impact of IFRS on reported performance measures. They may also have queries about additional data to be collected and the ability of the systems to capture that data. These prepare companies to decide their conversion to IFRS.
Sapphire helps its global clients attain IFRS compliancy and recommends software solutions to clients as per their business requirements. The company's professional knowledge and solutions are designed to improve the corporate visibility of clients.

For More Detail:
Accounting Definitions and Software Available Here

International Accounting Standards (IAS)

Accounting For Business - Learn Its Importance

All companies need accounting in order to run their business efficiently and effectively. A certified accountant can manage all of their expenditure and cash flow. Accountants are extremely beneficial in almost any business. This only means every business needs one. Accounting involves recording, summarizing and classifying all transactions of a certain company in a financial manner.
Accountants settle all the financial transactions of a certain company. A highly skilled accountant can produce a financial report that can serve as the basis of the CEO in decision-making. It is a must for clients and the management staff to look into those financial reports before they could come up with a sound decision, otherwise; they might not create the best decision for the company. If the management create a wise decision because of the help of the accountant, everyone in the company will benefit from the good effects of the decision made.
Leading companies' secret to their success is a combination of production, sales and accounting. Managers give high value to a graphic design company because they can give their business a top web design. It is also compared to an entrepreneur who hires a certified accountant who can put the company into the next level. The presence of an accountant is beneficial in all companies because the financial reports that they create are necessary for decision-making.
Before even the manager can hire the service of a credible graphic design company, he still needs the financial report of the accountant to see whether the company can afford to hire one or not. In some instances wherein the company needs to have one, they usually compare web design as well as web hosting reviews in order for them to determine which company they should hire. Successful companies were able to reach their current standing in business because of the three principal reasons mentioned above. Massive production staff plus a strong sales team partnered with the best accountant who can manage all financial issues is the best formula for a successful company.
Small business should hire a professional accountant because they can help in controlling the finances of the company. Even the most successful companies today can also lose their funds at a blink of the eye. All business operations deal with money, whatever decision or investment the management has to make, a substantial financial report should always be the basis of their decisions, thus, the need for a highly qualified accountant. There are many certified accountants today who can help us in the own business.
For More Detail:

What is Cost Accounting?

Knowing The Basic Accounting Principles

The Benefits Of Accountants Reports In Small Business

International Financial Accounting Standards Versus Generally Accepted Accounting Principals

Though we have known for centuries of the globes spherical dimensions, the last few decades have proven that the earth might be "flat" after all. People communicate all over the world like never before, allowing transactions to flow freely from country to country. Because this is a first time occurrence as never seen in history, people are adapting rapidly to new types of problems or ways that we could make these interactions more efficient. One problem is that because of the free flow of business transactions through different countries and different law enforcements, one set of accounting standards needs to be put in place to have easier access to financial information. International Financial Reporting Standards are one set of accounting standards, put in place by the International Accounting Standards Board, which is becoming the global standard for the preparation of public company financial statements. The current lack of a uniform set of accounting standards creates problems for companies preparers and users. Many multinational companies, creditors, and investors support the idea for a global set of accounting standards, which would make it easier to compare the financial statements of a foreign competitor, to better understand opportunities, and to cut cost by using one accounting procedure company-wide.
Currently over 12, 000 companies in 113 countries have adopted international financial reporting standards as their new accounting standards. The SEC believes that this number will continue to increase. Japan, Brazil, Canada and Indian countries plan to start using IFRS in 2010 & 2011. Mexico will adopt IFRS in 2012. This same year the U.S. will include IFRS questions on their CPA exams. President Obama released the financial regulatory reform proposals, on June 17, 2009, which called for accounting standard setters to "make substantial progress toward development of a single set of high-quality global accounting standards" by the end of 2009. The United States are expected to converge and/or adopt the international standards, IFRS and cease to use their current generally accepted accounting principals, as early as 2012. The proposed deadline, which requires U.S. public companies to use IFRS, has been postponed to 2015. In order to do this, differences between GAAP and IFRS need to be recognized and eliminated.
There are several main differences between GAAP and IFRS, which are causing substantial delays in their convergence. Some major distinctions between these two standards are that the IFRS does not permit LIFO, it uses a single step method for impairment write-downs, it has different rules for curing debt covenants, reports business segments differently, has different consolidating requirements, and is less extensive guidance regarding revenue recognition than GAAP. These variations at a minimum, have to be intensely studied by FASB to conclude extensive impacts on United States companies.
The first major difference between these two set of standards is the handling of inventory. Currently, U.S. GAAP allows the costing methods for inventory of FIFO, average cost, and LIFO. The IFRS has banned LIFO and companies will have major changes in inventory valuation to fit the new standards. Also, no special rules for livestock or crop are specified in GAAP, while IAS 41 specifies the use of fair value less estimated selling costs for biological assets. Another important change in inventory accounting is that IFRS will present inventory at lower of cost or net realizable value rather than market. The IFRS will also require that lower of cost or market adjustments be reversed under defined conditions, while U.S. GAAP does not allow this reversal.
Second, IFRS has different measurement procedures for the impairment of goodwill and other intangible long-lived assets. U.S. GAAP measures goodwill impairment using a two step process that first compares the estimated fair value of the reporting unit with the unit's book value. If the book value is greater than the fair value, goodwill is impaired and step two needs to be completed. In this next step, the fair value of net identifiable assets are established and subtracted by the reporting unit's fair value. The excess in the fair value of net identifiable assets is to be considered the goodwill impairment. IFRS will not use this process of measurement and instead will use a single-step computation similar to other long-live assets. This measurement for long-lived assets will be done with reference to higher of value in use or fair value less costs to sell. When this impairment for the long-lived assets (not goodwill) are measured they are allowed to be reversed in certain conditions under the IFRS.
Third, GAAP and IFRS have different rules when dealing with the curing of debt covenant violations. When a debt covenant violation has occurred it must be cured before the end of the year balance sheet date because under international standards it is not permissible after year end. This will have a large impact on the way companies will chose to finance their operations. There will be more pressure for companies to renegotiate their debt or they will have to raise capital through the issuance of their equity. Violations of debt covenants will show clearly which companies are not financially strong and will continue to show future problems.
The last major difference between GAAP and IFRS is that the revenue recognition guidance is less extensive for the IFRS. The IFRS guidance on this topic fits into one book about two inches thick, while the U.S. GAAP has approximately 17,000 pages of rules and guidance. (IASB) One reason for this is that GAAP contains industry-specific instruction, for instance, the revenue made by software development. The IFRS has relatively low regulations on the way specific industries recognize revenue. Some other differences between GAAP and IFRS are differences in segment reporting and consolidations.
Segment reporting differs slightly between the two standards because GAAP is flexible about how the company defines its segments through the management approach. The internal management selects specific segments even if they differ from the financial statements, when following GAAP, because these segments correspond to the internal operations. The IFRS will not allow the management approach, and the segments used must match the financial statements. IFRS No. 8 "Operating Segments" requires the reportable segments to be disclosed in both the annual and interim financial statements, which include both business and geographical segments. Another difference is that it will be required to have two different bases of segmentation, a primary base and a secondary base.
Another distinction between these two standards is that consolidation will be handled differently. First, GAAP requires consolidation for majority owned subsidiaries, while IFRS will look at control as a factor for consolidation. Some other differences are that variable interest entities and qualifying SPEs have not been addressed by the IFRS, parent and subsidiary accounting policies will need to be conformed, and minority interests will be required in equity. When it comes to consolidating foreign subsidiaries there are additional differences to consider. In order to consolidate a foreign subsidy, the parent company needs to receive the foreign financial statements and conform to U.S. GAAP before translation of the foreign currency. This step will be eliminated and will make this type of consolidation easier. More emphasis, however, will be placed on the currency of the economy of which business actually occurs to determine the functional currency, while GAAP is open to judgment with high consideration of cash flows. And last, under GAAP the equity accounts are translated at historical value, but are not specified under IFRS.
There are many differences between the U.S. generally accepted accounting principals and the international financial reporting standards, including but not limited to topics such as, inventory, impairment measurements, the handling of debt, revenue recognition, segment reporting, and the consolidation of financial statements. With the determination for one set of reporting standards elimination of these dissimilarities will be evident through the ongoing efforts between the FASB and the IASB. The most important thing is that accountants in the United States need to be ready for this inevitable event, because after all, the world is flat.
For More Detail: 

International Accounting Standards (IAS) 

Financial Accounting Versus Cost Accounting  

Financial Accounting Theory and Analysis - FARS Research 

Balance Sheet Accounting - A Crucial Snapshot

Balance sheets are tools used by financial managers and accountants which can provide a crucial window into the financial health of a company. Balance sheets outline the equity, liabilities, and assets of a company at the end of a particular period of time. This information is then passed on to investors and shareholders. This is a vitally important reporting tool which lays out a company's financial situation in a way that possible investors and management can understand in order to make the necessary adjustments. These balance sheets must be as accurate as possible in order for an individual to make a fair assessment about the company.
Balance sheet accounting requires the individuals compiling the information to be as accurate as possible when reporting the financial status of the company. Investors sometimes refer to the sheets as statements of financial position because they help a company to gain a better understanding of their overall financial situation, including assets and liabilities. They are vital not only for investors, but also for the management team at a company since it allows them to make the necessary decisions more accurately. Having outdated or inaccurate financial information can cause members of the company's Board of Directors to make decisions that would place the company's overall health in a dangerous position.
In order for a balance sheet to be used in any kind of strategic planning, reporting that goes into it must be absolutely accurate. This requires the accounting department which is responsible for its creation to carefully oversee all of the accounting processes and reporting techniques in order to deliver an accurate report to investors and upper management. Companies that have not paid strict attention to their accounting practices have found themselves in serious financial trouble and, if it is done maliciously, serious criminal repercussions.
The benefit of an accurate and well laid out balance sheet is that investors gain a better understanding of the company and can thereby make decisions regarding the purchase or sale of stocks. Any investor interested in placing a large amount of his or her money in a particular company should spend some time carefully looking over the available balance sheets. While these can be somewhat difficult to understand, they also provide a vital snapshot that can prevent huge financial losses on the part of the investor. There are financial experts that can help investors gain a clearer understanding of the information presented in balance sheets.For more information on investing in investment opportunities usually or normally not found in the marketplace.

Finance Accounting - Tips on How to Do It

Dealing with finances can be extremely tedious and nerve racking since you have to be as accurate as possible. It can be extremely difficult especially if working with numbers is not your favorite pastime. You have to be cautious and ensure that the smallest details have to be double checked. Making even the slightest mistake could force you to do the work all over again which could cost you a lot of time and energy. The work can even increase and become more complex especially during the tax season. This could weigh heavily on your work schedule and it is advisable that you acquire the services of an accounting firm.
When you outsource, you are able to tremendously reduce your workload and this will help you concentrate on other aspects of your business. It helps you reduce your stress when it comes to the complexities involved with the tax calculations. Tax issues are considered serious and need to be handled by professionals who understand the intricacies involved with it. Finance account outsourcing involves tallying of finance documents before you can pay your taxes.
It is important to make the process an integral part of your business so that if any financial information required by for example a bank, you are in a position to easily access it. When all your documents are in order, you are in a position to know the amount of tax you are required to pay. Accounting firms are expected to do their work as professionally and as competently as possible. This means that they are supposed to have finished your work in a specified duration.
A good accounting firm is supposed to work within your budget amount. This will save you money if you had in-house staff for this purpose, and you would probably have to pay exorbitant amounts of money, allowances etc. Outsourcing finance accounting will help your business run efficiently.
Fore More Detail: 
Financial Accounting Theory and Analysis - FARS Research 
Financial Accounting Versus Cost Accounting

Financial Accounting Versus Cost Accounting

Before we go to differentiate Financial & Cost Accounting we must have knowledge what these both terms really are. As we define both terms these would automatically be differentiated.

Financial Accounting:
Financial Accounting is a systematical way to prepare the financial statements of an organization is order to get the true and fair view profit or loss. These financial statements are organized for decision making, stockholders, Banker, Supplier, Shareholders, Government Agencies, and other stakeholders. The basic requirement to prepare financial statement is to examine and reduce the dead expenses by measuring the expenses and income status and to reporting the result to interested users. These statements are organized for outsiders who do not take part in day to day organizational activities.
Simply we can say, "Financial accounting is the process which includes recording, interpreting & summarizing date taken from financial records of an organization and bring it out in an annual report for the benefit of people outside the organization".
In depth financial accounting contains some principles, Concepts & Equation.
Financial accountants organize financial statements based on Accounting Principles which are generally accepted by a specific country. Financial statements must be prepared according to the (I FRS) International Financial Reporting Standards.
Accounting Equation: (ASSETS = LIABILITIES + OWNER'S EQUITY).

Accounting Cycle:
1. Voucher.
2. General Journal.
3. General Ledger.
4. Cash Book.
5. Trail Balance.
6. Trading profit & Loss Account.
7. Balance Sheet. Cash Flow Statement.
First of all the transaction occurs and noted in the form called Voucher. All transactions are available in vouchers. Then one specific form is created called General Journal. All transaction recorded in one form. The next step is Called Posting in which all separate heads/accounting recorded separately in different form/accounts called General Ledger. Cash Book is maintained to record the payments and recipes or organization. By the help of General Ledger the Trail Balance prepared which provides the items of Trading, profit & Loss account and Balance Sheet which shows the financial position and the health of the Organization. And lastly Cash Flow Statement is prepared to drive the accrual inflow & outflow of cash.

Cost Accounting:
Cost accounting ascertains budget and actual cost of production, operations, departments, process and the analysis of variance. Cost accounting is used to support decision-making to reduce cost of organization and improve its profitability. Cost accounting does not require standards as (GAAP) Generally Accepted Accounting Principles, as its primary use is for internal management, rather than outside people. Some of managerial accounting approaches are mentioned as under;
• Managerial Costing.
• Activity based Costing.
• Standard Cost Accounting.
• Resource Consumption Accounting.
Three Classical Cost Elements:
• Raw Material.
• Labor.
• Factory Over Head/Indirect Expenses.
Cost Accounting is being used to help the managers to understand & reduce the running cost of an Organization. Most of Cost varied with the rate of production which is called "Variable Cost" like money spent on labor, power to run a factory, direct material etc. Unlikely variable cost, some costs remain the same even while busy period or during null production. These costs are call "Fixed Cost" like Depreciation on Assets, Rent of building etc.
In cost accounting some statements are prepare. Majors are Income Statement, Cost of Goods Sold Statement, and Cost of Production Report.

Income Statement:
Income statement is prepared to drive the net income/profit of the organization. In the process all direct Expenses related to purchase of Goods/material are less from Sale and the retained amount is called Gross Profit. Then all indirect expenses related to sales, Admin & Financial Charges are deducted from (GP) Gross Profit, retained amount after deduction is called (NP) Net Profit/income.

(CGS) Cost of Goods Sold Statement:
Cost of Goods sold statement is prepared to drive the total cost which is spent on the purchasing to sell the produced Goods. In the preparation process first of all the Closing Martial of last year is added in purchase of Martial, which is called "Total Material Available for Use" and Material Used is deducted from it. The remaining amount is called "Cost of Material Consumed". Then the cost of Labor and (FOH) Factory Overhead added in cost of material consumed. The total of this is called "Total Factory Cost" after that Opening stock of work in process is added and closing stock of work in process is deducted from Total Factory Cost. The amount which drives after this is called "Cost of Goods Manufactured". Lastly the Opening Stock of Finished Goods is added and Closing Stock of Finished Goods is deducted from Cost of Goods Manufacture and the Answering amount is Called "(CGS) Cost of Goods Sold"
(Direct Material + Direct Labor= Prime Cost) (Labor + FOH= Conversion Cost)
For More Detail:
Financial Accounting Theory and Analysis - FARS Research

Incomplete Accounting Records

The accounting records of many smaller non-profit organisations such as clubs, cultural societies and small undertakings are often kept by means of a single entry accounting system. Nevertheless, details of the financial activities of such organizations and undertakings are available in different documents such as bank statements, invoices, accounts, wage sheets and minute books.

There are two major disadvantages to such incomplete (non-double entry basis) accounting records: (1) a great deal of useful information may be lost. It is possible to prepare financial accounting statements from the available information, but this may be more difficult than when complete records are available. Certain transactions may not be accounted for and there is also no continuity in the recording of financial and other useful information. (2) The advantages of the controls inherent in a double entry accounting system are lost.

A discussion of the treatment of incomplete records is useful for various reasons. First, it emphasis's the advantage of a comprehensive double accounting system. Further, it is practical because accountants often have to prepare financial statements from such incomplete records, chiefly for income tax purposes. In practice, therefore, the conversion of single entry accounting information to a double entry basis is an analytical exercise. It may also happen that the double entry accounting records of an enterprise are lost (e.g. as a result of damage by fire) and the accountant must reconstruct them from incomplete records. Consequently, attention is given to certain aspects and practical procedures that arise as a result of keeping incomplete accounting records.

Assume that a trader has been in business for some time and that he wants to determine his interest in the undertaking at a specific date. In order to do this he must determine the total interest in the business and against this, bring into account any external interest. This can be done by, constructing an equity statement. (Basically, this contains the same information as the balance sheet, but is not prepared from balances of accounts in a double entry accounting system.)

The equity statement must be prepared by referring to any applicable information available. Keeping in mind that, undertakings that do not have formal accounting systems will find it necessary to keep records of certain basic information in order to conduct their business. For example, records of cash received and paid and amounts owing, both to and by the undertaking, are essential. Cash on hand can be determined by a cash count, cash in bank from the bank statement and amounts owing to and by the undertaking from invoices. Stock can be counted physically and the valued. The cost of fixed assets purchased can be determined from the supporting documentation. Owner's equity will be the difference between the values allocated to assets and liabilities.

The most practical method of determining net income or loss from incomplete accounting records is to analyze the change in owner's equity during any specific period. Obviously, owner's equity increases if a profit is made and when the owner makes additional investments in the undertaking. Conversely, owner's equity decreases as a result of losses and drawings by the owner.
For More Detail:
Accounting From Incomplete Records

How to Start a Consignment Shop

Consignment shops have started popping up in nearly every town across the United States. Whether they are selling clothes or furniture, sporting goods or household appliances, consignment offers a great way for people to buy and sell used goods, whether it is online or in a brick and mortar store.

Here are the basics of what you'll need to start a consignment store:

1) A business plan. Even a ten page business plan will double your chances of success. Your business plan should spell out what your market is like, what kind of competition you have, and what niche you will fill. It should specify your business structure, how many employees you'll need, and what your start up costs will be, as well as what your monthly overhead costs will be and how many months it will take for you to break even. You also need to write a basic marketing plan, and write a detailed resume for yourself and why you have what it takes to run a great consignment store. There are plenty of resources online for how to write a business plan, but that gives you the thumbnail sketch.

2) A great location.... that fits your budget. Writing your business plan will help you define your budget, but after you've got a figure you'll need to start looking around. A new consignment store is made or lost by its location. You want at least 100 square feet for even a closet of a store, and 500 is better. Most successful consignment stores are 800 to 2000 feet, but there are plenty of exceptions to that. Foot traffic and good parking is essential. It is a good idea to have a lawyer review your lease contract, just in case something goes wrong down the road.

3) A business license and possibly a reseller's license. Get yourself down to your local municipal building and find out what you'll need to be legal. This paperwork may seem like a pain, but you'll need it to get a business checking account. Even if you are starting your consignment store from your home, or online, you still need to get your business registered.

4) Business cards. You can get them printed online for $20 or less. Don't buy 10,000 of them to start... in a few months you'll know more about what you need on your business card. For now, just get 500 or so, and put your name, business phone number, email address, street address and your consignment specialty on the card. If there's room, you can tell people about the conditions under which you take new inventory (walk in anytime, or by appointment?) and what your terms are (50/50 split, or 60/40 in your favor?).

5) Equipment for your store. At the very least, you'll need a cash box and some racks and signage. To be taken seriously, you'll probably need a computer inventory system, plus a real cash register, quite a few racks and hooks and tags and bags and more. Hopefully, you made your start up costs list and equipment needs in your business plan, so you'll have your shopping list handy.

6) Inventory. This will be easier than you think. Almost any consignment store owner will tell you that getting inventory is not a problem. Place a few ads or let friends know you're taking inventory, and your store will fill up faster than you can believe. The real problem is picking stuff that will actually sell. That's a fine art, and most of your long-term success as a consignment store owner will hinge on it. Just keep practicing.

For More Detail:

Making Money at Home - Consignment Selling on eBay

Consignment Account

Management in Non-Profit Organizations

The formulation of strategy is often different depending upon the type of organization involved. Large businesses often use a planning department structured on formal lines. Specialized planning staff is needed to deal with all the factors which must be noted in making strategic decisions. In other large businesses, planning staff may work with line managers in strategic planning and not work in isolation in a formal planning team. Small businesses differ from large businesses. So, different methods of formulating strategy are used in small businesses. They are less formal or systematic than in larger organizations.

Organizations that do not try to make a profit differ greatly from each other, as they all have different reasons for existing. They also differ from profit making firms in the following ways:
•The influence of the 'customer' may not be strong;
•The service provided may not be easily measurable;
•There may be very strict rules and guidelines regarding the payment of rewards to employees;
•Resolution of conflict may be achieved mainly by the strength of character of the 'leader'.

There are other differences and they all affect the way the organization responds to the determination of strategy. The organization may have no strategies at all. It could be managed for short term budget cycles, rather than long term cycles. Alternatively, it may be managed for personal goals, rather than considering changes in its mission because of changing external circumstances. Examples of non-profit-making organizations include public schools the Red Cross, the Spastics Society and political parties.

There is no doubt that there is a trend towards a more professional approach in these organizations as more people from industry join them. This is highlighted in their more positive approach to marketing. They need to do this because of:
•increased competition from other organizations;
•Cutbacks in government or local funding.

Marketing these organizations is becoming more professional and could, for example, be aimed at;
•a person who would be the focus of attention, such as a political candidate;
•a place, such as a city or country. There are numerous promotions each year, e.g. fly drive holidays in the USA;
•An idea, such as child abuse or overeating.
No matter whether the organization is profit making or not, a marketing strategy is needed to reach customers effectively.
For More Detail:
How to Advertise For Your Non Profit Organization

The Accounting Of Non-Profit Making Organizations

Home Accounting Software Top Tips

Simple home accounting software sometimes is little more than checking and budget software. Especially some of the free web-based accounting systems are as a rule not really accounting and bookkeeping, but just really like a big checkbook. If you need a home business accounting package the free options likely will not work. But for many users free is just right.

It may be that you need a full-powered small business accounting package, like from Peachtree, Sage or Quick Books. If you need the full range of accounting, that likely is the case. Of course a full-on accounting package comes with costs that may not be readily apparent. The initial cost of a software package is only a modest part of the total cost of accounting packages.

The real cost comes from learning how to use it and keeping it up-to-date and working. That cost you keep paying and it adds to far more than what you pay to get started. That's why simpler is better if your home business can get by with less, and many can. In some cases the simple versions of software will even take care of a few employees and payrolls. That makes the most valuable task to get started the planning part. Appreciating what the real requirements for accounting are in your situation is where you begin. Get that right and you can minimize the time and investment to get started.

What would be considered personal accounting software generally comes in more powerful versions that add on functions. The simplest packages often do not even provide for investment tracking. That's an option. Another possible option that might seem basic is real estate investment tracking and accounting. Then the other add-on is home business functions.

The right software package solves all sorts of financial challenges and does it with a minimum of fuss...

Look out for the limits that are in many home accounting software packages. If you have a home business or investments, the free web-based software programs are often too limited to be of much value. Even though free, they may be a waste. If the free systems work, that's a good deal but many people need more power, especially of you have a small business or investments.

For More detail:
Benefits Of Choosing the Best Accounting Software

The Personal Accounting Software Ideas

Use Peachtree Accounting Software

Online Accounting Software Review - QuickBooks Online

The phrases "online accounting software" and "Quick Books Online" are practically synonymous with one another. Over the past several years, Quick Books Online has won several Editor's Choice Awards from PC Mag over other online accounting programs. Although it does not contain the inventory features that a Point Of Sale program might have, it does combine financial tools with a simple-to-use interface that demonstrates excellence at each turn. Many consumers are impressed by the unexpected features the online version has, including its ability to perform automatic invoicing and location tracking. This online business software also offers an unprecedented level of customization.

In professional and consumer written reviews, the primary advantage of this software over other online programs is that it is much more comprehensive in its approach to accounting. The financial tools are designed to focus upon six different areas: company, customers, vendors, employees, banking, and reports. The administrator portal of the software allows quick reference access to a chart of accounts, a log of user activity, recurring transactions, and budgets. The customer related tools and data will also serve an uncomplicated business in several positive manners. You will be able to customize certain elements, such as forms, permissions, and online payment protocols.

When acquiring this program you will be able to import customer related data from Gmail (which is an unusual feature), Outlook, and Excel. You will also be able to build and customize your own client lists and records. Other online software allows you to do this as well. However, in consumer written reviews, the forms used were found to be more comprehensive and thorough than those of the competition. Other pros of this software include a plethora of functions and exceptional functionality. It also contains inexpensive payroll features and free online support and mobility.

For all of its wonderful features, this online accounting software does have some minor drawbacks. For example, it does not contain an online bill pay option. It should be noted that it only has one payroll option. Other complaints regarding QuickBooks Online were centered around its lack of customer and vendor records and its lack of outside integration. Overall, it is believed to be an excellent choice for serviced based businesses, due to its simplicity and mobile access to purchase tools and data. Furthermore, its intuitive interface has won numerous accolades amongst consumers and business professionals.

The Best Home Accounting Software - Tips

Get control of personal finances and get ready for more calm. Out of control spending just leads to frustration and stress. Just pencil and paper may work to get a budget and get going. However sometimes some simple software may make progress even easier. By measuring and tracking your financial activity, it's possible to make fast progress toward your objectives.

In addition, who needs an overly complicated system that's difficult to learn and use and just makes for aggravation? There are so many choices out there it's easy to get confused and get more or even less than you need. You can get some products that will leave you rapidly at the limits of what the program can do. That's certainly true of some of the free home finance software.

Accounting for home use falls into two main groups. Popular now are the packages that work online and are web-based. You get quite a feature rich package that is easy and convenient to use. Then again, the other software type resides on your computer and this more nearly resembles software that would be used in business and maybe by your accountant. But then again, it's very likely that you have no need for a full accounting package. if you have to have it, that's fine. Otherwise it's complication and frustration for nothing.

Free web software mostly works like online banking with added in budget features. That's powerful since many folks are mostly looking for budget help, more so than accounting help. Certainly getting rid of debt and getting control of spending is a grand idea. The free online software may work just perfectly if that's mostly what you want... budget help.

Look out though for what may be missing. It may surprise you. What may not be there are such simple features as investment tracking and even the most simple insurance tracking. Often no accounting at all for home business is there either.

Free software often leads to a dead-end after you find out how limited it is and that means you wasted the time to learn to use it.

To get additional capabilities it may take an upgrade up to a software version that goes beyond personal finance software to a product more similar to a real bookkeeping package that lacks the complications of a package like a professional accountant would use or like a larger business. But if you need investment management, if you have an apartment rental property, investment real estate or a home based business or office, there are answers that will likely fit your needs.

The Personal Accounting Software Ideas

When it comes to selecting personal accounting software, you likely want something that will help you get control of your finances. Eliminating debt and steering individual finances and bookkeeping can be much easier with the right tools.

When you begin to analyze accounting software, you may quickly see that the choices can be described as a couple of different types. For one, there are the web based solutions that include Quicken Online or what was Mint and several others. These, in most cases, are free and suitable for home use, especially if you mostly need budget help.

Much like online banking the free software works for many. The real attraction to these besides the price is the function. You get most all your online financial information all available in one spot and easy to review. Very handy for keeping up with right where you are at all times, the free versions include more...

What you also get are budget functions. That means you can, right online, set budgets and track them to see where you are all the time. It's a good deal and all for free...

Look at this though before you sign on... If you have more complications, like real estate investments or even a small business or payroll, you quickly hit the limits of the free online software. They just won't handle much accounting needs which forces you to something else.

The "something else" could be the other major group of software, the kind that resides on your computer. That can be for free to though.

If you need more than just basic personal finances and you need some real bookkeeping it most often means a higher level software with more capabilities like a system that an accountant would generally employ. Clear preferences show up in comparisons of software and reviews.

The best personal accounting software costs less than you may guess. Free works for many as well. Get more helpful tips as well as learning about the limits of software at another of our articles.

Using a Forensic Accountant to Counteract Personal Identity Theft

Over the years, personal identity theft has become one of the most common ways criminals use to accomplish their embezzling schemes. Every year millions of pounds are illegally tendered to businesses by thieves, under the disguise of being legitimate customers. The collecting of another individuals name, birth date, address, credit card numbers, etc. are vital pieces of information that allow a thief to be able to establish a new identity that is really no identity of their own, but a fake version of you. With this new fraudulent identity they then can embezzle products or money from unsuspecting businesses, purchasing goods and services free of charge to them, while simultaneously destroying your credit.

Thieves get this vital information from various sources. Sometimes it can be from your own trash-can (should you not have properly shredded or destroyed sensitive documents). At other times it can even be through the intercepting of your mail. Still at other times it's from unprotected computer systems that have allowed spyware to be installed and are now sending private data to the criminals. Whether on a corporate level or personal one though, the stealing of this sensitive data leads to problems, but before discussing who you need to handle that problem, first take some measures to protect yourself.

Make sure that you keep all of your sensitive data in a secure location. Most people prefer to store their information digitally these days. Just be sure that whatever application you choose to use encrypts your account numbers, pin numbers, etc. You want a system that locks the data and makes it unreadable if the computer itself is ever lost or stolen. As you can probably imagine, this could be a real issue if you keep this vital data on your laptop and you happen to lose it. Also make sure that your computer systems have the latest anti-virus/anti-skyward available. This will certainly help prevent unnoticed, behind the scenes smuggling of your sensitive data. Also, look at your credit history periodically and make sure that everything listed is your own. This goes for your business credit reports as well. Often times people may even set-up business accounts with major retail suppliers in the name of a business, but using your personal data. If you find an illegitimate entry on the report, dispute it immediately so that it can be removed.

If you aren't able to advert a fraud or a theft problem and you end up losing money behind a scam, your best option is to look into forensic accounting. Forensic accounting focuses on tracking transactions and building paths that can often be used to trace where the fraud began and thereby even assist in tracking down who committed the crime. Forensic accountants specialize in this work and are usually able to make a quick case of the situation, so don't just try to rely on anyone that's not trained in the work. Forensic accounting will tell you exactly how large the problem currently is, how far it can spread based on what data was gathered, and can possibly even tell you immediately based on the trail of evidence who is responsible for the crime, and then help you get the money back.

So protect yourself as best as possible from today's threats, but if worse comes to worse, use forensic accounting to give you a hand in tracking down the thief and recouping your loss.

Find Out the Difference Between Assets and Liabilities and How Your Bookeeper Records Them

Revenues and Receivables

In a good number of organizations, what drives the balance sheet are revenue and costs. In other words, they're the assets and liabilities of the company. Making real money in a company comes from several diverse areas. It can get just a little complex as just like in our private life, commerce is run on credit. A lot of establishments sell their products to their prospects on credit. Bookkeepers use an asset account referred to as accounts receivable to record the full total due to the firm by its clients who haven't paid the balance in full yet. Much of the time, an organization hasn't collected its receivables in full by the end of the financial year, especially for sales that are made near the end of the accounting period.

Your bookkeeper records the sales revenue and the cost of goods sold for these sales in the year during which the sales were made and the goods delivered. This is called accrual accounting, that records income when sales are made and records expenses when they're incurred. When sales are made on credit, the accounts receivable asset account is increased. When cash is received from the client, then the cash account is increased and the accounts receivable account is decreased.

The cost of merchandise sold is without doubt one of the main expenditures of businesses that sell wares, products or services. A company makes its profit by selling its products at prices high enough to cover the cost of manufacturing them, the costs of running the company, the interest on any capital they've borrowed and income taxes, and a margin for profit.

When the business acquires products, the cost of them goes into what's referred to as an inventory asset account. The cost is deducted out of your cash account, or added to the accounts payable liability account, based on whether the organization has paid with cash or credit.

An accounts receivable asset shows what money customers who bought products on credit still owe the organization. It is an assumption of cash that the organization will receive. In essence, accounts receivable is the amount of uncollected sales revenue at the end of the accounting period. Cash won't increase until the company in fact collects this money from its organization customers. However, the amount of cash in accounts receivable is included in the total sales revenue for that same period. The company did make the sales, even though it hasn't obtained all the cash from the sales yet. Sales revenue, then isn't equal to the amount of cash that the firm accumulated.

To get real cash flow, the bookkeeper must subtract the amount of credit sales not collected from the sales revenue in cash. Next add in the amount of cash which was collected for the credit sales that were made in the preceding reporting period. If the total amount of credit sales a company made during the reporting period is greater than what was collected from customers, then the accounts receivable account increased over the period and the company has to subtract from net income that difference.

If the amount they collected during the reporting period is greater than the credit sales made, then the accounts receivable decreased over the reporting period, and the bookkeeper needs to add to net income that difference between the receivables at the beginning of the reporting period and the receivables at the end of the same period.

Financial Accounting Theory and Analysis - FARS Research

U.S. Standards needs to focus in order to encourage international harmonization. The mission statement that was adopted in 1973 is required to be updated because of market globalization that has brought a change to the economic environment and the efforts that have been made towards international harmonization.

Bilateral is the first approach to international harmonization where planning is done on accounting harmonization by regulators of two countries. An example of the projected bilateral approach is the disclosure system between Canada and the United States which is currently waiting at the SEC. The Bilateral approach has various advantages the least of all it is easier and faster to apply. Multilateralism is the second approach to harmonization. The European Community (EC) has taken important steps that include accounting and some involvement to smooth the process of flow of capital within states who are members. The EC has national harmonization with the membership in the IASC. Efforts have been made to recognize financial statements and member states prospectuses mutually. International is the third approach, its goal is to expand an organization of accounting standards which are accepted consistently. By working with international organizations all the countries would adapt to similar standards of uniformity.

According to Statement No.130, there is an international model which is moving towards an all inclusive income concept. Standard setters internationally have been paying attention to financial presentation reporting as a response to the guide set by ASB. The UK accounting standard board issued Financial Reporting Standards No. 3 on reporting of financial performance. For the promotion of international harmonization, the board has made efforts by discussing reporting comprehensive income with the International Accounting Standards Committee, the New Zealand Society of Accountants, the Canadian Institute of Chartered Accountants, the Australian Accounting Research Foundation Standard Setters, and the ASB.

The goal to international harmonization and concerns about the comprehensive income items in equity reporting has made it more urgent to work on the project because of its increasing use. The board has financial instruments that are off balance sheet. A Proposal has been made by the board in which fair value measurement and recognition should be done for all derivative instruments. Fair value measurement has raised many questions about the reporting of gains and losses. It is the board's belief that suitability and consistency be maintained with comprehensive income definition, with the inclusion and exclusion of gains and losses from net income.

According to statement No.128, Earnings per share, a draft of statement of principles was issued by the IASC in October 1993 for public to comment. Due to the extensive use of earnings per share in financial statistics, the IASC's goal was to commence as to the presentation and determination of EPS in which global comparisons would be permitted. Even with limitations in EPS data, earnings were determined differently in different national methods. The FASB and the IASC believe that in international financial reporting, a consistent determined denominator will be a significant improvement to accomplish international harmonization of the accounting standards for computing earnings per share. The board pursued its EPS project in conjunction with the IASC. The project focused on EPS calculation denominator in spite of the issues concerning earning purpose. IAS 33 Earnings per Share, was issued by the IASC at the same time as the issuance of this statement. The standard provisions are the same as the statement.

The goal of the project was international harmonization, so the presentation by the FASB in its initial decisions on the income statement and earnings per share to the IASC Steering Committee and the IASC Board in September 1996 was considered a preliminary conclusion. The board finally decided to keep the required presentation dual in the exposure draft. The Boards believes it is necessary to attain international harmonization in all phases with the IASC because the difference is only one of display and not one of a conceptual nature.

International Financial Reporting Standard No.5 was recently issued by The International Accounting Standards Board on Non-current Assets Held for Sale and Discontinued Operations (IFRS 5). The most recent idea of discontinued operation exposure by the international standard setters provided the EITF with a chance to develop harmonization internationally and remove a major issue that was creating a disagreement between international standards and US.

International Accounting Standards (IAS)

International standards IAS are fully compatible with U.S. "generally accepted accounting principles" (GAAP). In a range of issues, GAAP contains more detailed methodology of calculation. IAS and GAAP standards are based on same principles of accounting and financial reporting. For various reasons, international standards are heavily influenced by accounting practice in the United States. There are currently more than 30 accounting standards relating to various aspects of accounting.

The deciding factor of using International Financial Reporting Standards is a company's desire to improve its ability to attract vital foreign financing, establishment of long-term trade relations with foreign customers, attracting foreign investors, joint ventures, and issuance of securities in international market.

IAS establishes such requirements for financial statements, as form, time of recording, content, etc. They are aimed at improving and harmonizing legislation, existing system of accounting standards and procedure of financial reporting. Application of IAS in accounting system is also useful for characterizing company performance in a simpler and more realistic form, comparing financial situation of the company with financial situation of foreign companies.

Principles of IAS

Accruals concept in IAS (income and expenditures). Transaction income and expenses are recognized at the time of their appearance (not at the time of money receipt or payment), recorded in accounting records and recognized in financial statements in the period they relate to. Financial statement prepared in accordance with accrual principle informs users not only of past transactions involving payment and receipt of funds, but also obligations on payment in future and resources as funds to be received in future.

Guidelines for preparation of financial statements based on IAS:

1. Diligence. Aims to ensure assets and earnings are not exceeded and liabilities or expenses are not ignored. According to this principle of IAS, one should be ready to repel potential losses and damages and refrain from stating of revenues and income prior to their actual receipt.

2. Substance over form. It is necessary that information on operations would firstly match point and economic reality, not just established legal form.

3. Completeness of information. According to IAS, information must be complete. But one should take into account its importance and value.

4. Comparability. IAS users should be able to compare financial statements of the enterprise, made at different times, to identify common trends, as well as financial statements of different enterprises. Accounting policy cannot be executed arbitrarily.

International standards are developed and approved by the Committee on International Financial Reporting Standards. The Committee was formed on June 29, 1973 as a result of adoption of the agreement by accountancy bodies in Austria, Canada, France, Germany, Japan, Mexico, Netherlands, Ireland, Great Britain, and the United States.

Knowing The Basic Accounting Principles

Every business requires investment. Depending on the size and nature of business, a lot of money is needed to turn it on. However, it's a great danger that this money could be lost if the company fails.

The investment risk associated with starting a business can be overwhelming. This is especially true for a person starting a business for the first time. The process is long and requires patience and perseverance to succeed, especially during the early stages. As time passes, more details need to be addressed and one of these processes is the accountant of the company.

It is very important for business owners to understand the basic principles of accounting, not only for the good of the company but also for your own peace of mind. Although the owner usually receives an accountant or a bookkeeper to perform bookkeeping tasks, understanding of the accounting process is very important for the owner to better understand how the company performs well and have a better understanding of the finer details impact the success or failure.

There are some basic accounting principles a business owner should consider. They constitute the generally accepted accounting principles or U.S. GAAP. Other countries have similar rules that are issued by accounting standard boards. In Australia, the Australian Standards or IAS Accounting Standards Board issues.

Principle of Cost

One is the principle of cost. On this basis, the business assets are recorded and reported based on the actual cost of acquiring these assets and not on their free market value free. This principle is considered more reliable and reduces the possibility of a market value Part interfere with the accounts.

Principle of Accrual Accounting

Another principle is accrual accounting is. Under this, all the business organizations are required to record and report all income at the time made or completed and not when cash or products are received by the company. This principle is important because it shows what has been achieved or completed and what you can do in the future.

Matching Principle

Third principle is the matching principle. This accounting principle requires that a company match revenues with the costs that were incurred to generate the revenue. This ensures that companies reported revenue results include all associated costs and therefore accurately reflect the underlying activity to generate the revenue.

Disclosure Principle

Fourth principle is the disclosure principle. Financial reports are usually providing information on past performances of the company. The disclosure of the client insists that the events in current or future published reports, and politics driving the company has used the reports. This ensures that reports are transparent and analysis can be easily achieved.

Bottom Line

It's also important for the entrepreneur to understand these basic principles in order to better understand the information on the financial statements, and therefore lead to better decisions.

What is Cost Accounting?

This can be described as the process of accumulating, measuring, analyzing, interpreting and reporting cost information that is both useful and relevant to the internal and external stakeholders of a business entity. External stakeholders are those who have a vested financial interest in a business or company. For example banks (loans), financial houses (mortgages), investors (investments), etc. Internal stakeholders are the business or company directors, managers, division heads, etc.

One of the many benefits of cost accounting is that it turns data into information, knowledge and wisdom about a business entity's operations that is useful for:

* measuring performance
* reducing or managing costs
* determining the fees or prices for goods and services
* deciding to authorize, modify or discontinue a program or activity

Another benefit is that information on the costs programs and activities may be used as a basis to estimate future costs in preparing and reviewing budget requests. Once budgets are approved and executed, cost information serves as a useful feedback on performance. Moreover, costs may be compared to known or assumed benefits to identify value-added and non-value added activities. Reliable information on the cost of programs and activities is crucial for the effective management of a business entity's operations. Cost accounting is especially important for fulfilling the objective of assessing operational performance. The objective is to improve the efficiency and effectiveness of operations by furnishing program managers and others with timely and relevant cost-based performance information to allow for continuous improvement in delivering outputs and outcomes to stakeholders. Cost accounting has been with us since early times to help managers understand the costs of running a business. Modern cost accounting originated during the industrial revolution, when the complexities of running a large scale business led to the development of systems for recording and tracking costs to help business owners and managers make decisions.

In the early industrial age, most of the costs incurred by a business were what modern accountants call "variable costs" because they varied directly with the amount of production. Money was spent on labour, raw materials, power to run a factory, etc. in direct proportion to production. Managers could simply total the variable costs for a product and use this as a rough guide for decision-making.

Some costs tend to remain the same even during busy periods, unlike variable costs which rise and fall with volume of work. Over time, the importance of these "fixed costs" has become more important to managers. Examples of fixed costs include the depreciation of plant and equipment, and the cost of departments such as maintenance, tooling, production control, purchasing, quality control, storage and handling, plant supervision and engineering. In the early twentieth century, these costs were of little importance to most businesses. However, in the twenty-first century, these costs are often more important than the variable cost of a product, and allocating them to a broad range of products can lead to bad decision making.

In modern accounting, costs are measured in accordance with Generally Accepted Accounting Principles (GAAP). In accordance to GAAP the principle is to record historical events and assign a monetary value to each event that has taken place. Costs are measured in units of currency by convention. Cost accounting could also be defined as a kind of management accounting that translates the Supply Chain (the series of events in the production process that, in concert, result in a product) into financial values.

In conclusion, for any business entity - from the smallest business enterprise to the largest multinational corporation - to be successful requires the use of cost accounting concepts and practices. It provides key data to managers for planning and controlling, as well as costing products, services, and customers. The central focus is how it could help managers make better decisions. For this reason businesses and companies hire cost accountants and they are increasingly becoming integral members of decision-making teams instead of just data providers.

An Overview Of IFRS Accounting

Accounting and financial reporting has been undergoing some changes in the recent years. This change is mainly brought about by the adoption of the IFRS accounting by companies from more than 100 counties all over the world. These 100 countries have been previously using the GAAP or the Generally Accepted Accounting Principles. After seeing the many advantages of using the accounting, these countries have abandoned the GAAP and are now using the IFRS.

IFRS accounting is a set of standards that are created by the IASB. Majority of these standards are previously known as International Accounting Standards or IAS. The IAS was used from 1973 to 2001 by the International Accounting Standards Committee or the IASC. In 2001, the IAS was incorporated into the IASB and this led to the creation of the new standards that is now called the IFRS. There are only a few countries left in the world who have not yet adopted the accounting. This does not mean that these countries are against the accounting. These few countries are just biding their time until they fully adopt the accounting in the next few years.

The IFRS accounting was created for the use of profit-based companies to help them in the formulation of accurate financial statements. These financial statements based on the accounting should contain complete data such as operational performance, cash flow, and financial standing. These data are proven to be very useful for the public, investors, lenders, management and employees of these companies.

A complete financial statement based on the IFRS accounting should contain a balance sheet and statements that contain information about the company's cash flow and income. The financial statement should also contain a statement of all the changes in the company's equity. All these data are very important in the decision-making process of the management as well as investors. These data can also be used to guide the decision of future investors as they decide on whether a certain company is a worthy investment or not. In the accounting, the policies of the company are also an important part of its financial statement.

There are a lot of benefits to adopting the accounting and one of them is that it provides more detailed information as compared to the GAAP. The IFRS accounting is also less complicated which makes it easy to use and provides a more detailed reporting. International and local investors also prefer financial statements that follow the accounting guidelines.

Features That Make a Joint Stock Company

What are the features of a joint stock company? There are many features and by the time you complete reading this page, then you'll be fully equipped with each feature. The features are:

1. Perpetual existence-People join to be members and drop their membership, but the company continues its business as usual. It is not affected by death, insanity or insolvency of its members.

2. Incorporated association-A joint stock company has to be registered under the companies act for it to be legal.

3. Artificial person created by law-It is an artificial person created by law thus it can be sued in its own name and enter into contracts in its own capacity.

4. Voluntary association or organization-No one forces anybody to be a member of a joint stock company or give up membership. A person joins it willingly.

5. Common seal-It has its own seal which it uses in documents. The seal is one on which the name of the joint stock company is engraved and it's used as an official signature.

6. Limited liability-The personal properties of its members cannot be brought to clear its liabilities.

7. Specific trade or purpose-It is formed for a specific purpose only. The purpose is stated in the memorandum of association which acts as its constitution. This is meant to protect the shareholders and creditors.

8. Ownership and management separate-The members are not involved in the day to day operations of a company. This task is entrusted to board of directors whom the members elect. But the control of the joint stock company is vested on the members.

9. Shares divided-Its capital is split into a fixed value of shares that members are entitled as money and money's worth they have contributed.

10. Not a citizen-It has a nationality residence and domicile but it has no citizenship of any country.

11. Separate property-A joint stock company has full rights to own and dispose properties in its name. Members cannot claim to own any of its properties.

12. Large number-A private Co has a minimum of 2 and a maximum of 50 members while a public Co has a minimum of 7 but there is no maximum number of members.

13. Transferable shares-Members of a public Co can transfer their shares freely to another person without consent of the Co. But in certain cases, the restriction of transferring shares may be imposed through its article. However, a private Co does not allow its members to transfer their shares freely.

14. Separate legal entity, corporate personality and veil of incorporation-A joint stock company has its own existence separate from its members. As a legal entity it can; acquire and dispose of properties, enter into contracts, sue and be sued in its name, continue even if members leave it (perpetual existence.)

But there are a times when the separate legal entity is brushed aside by the courts. When the courts do this, then it's termed as piercing the corporate veil. In this case, the courts ignore the separate legal entity of the joint stock company and look into the economic realities behind the corporate veil. It treats the company and its members as one person. This normally happens when there is a reason to suspect that the legal entity is misused for fraudulent purposes.

Benefits Of Choosing the Best Accounting Software

Accounting is integral part of business. It is very helpful in maintaining financial information in a thoughtful manner but it requires skill. The basic knowledge and understanding of its rules and principles are essential to prevent any mistakes. Accounting software is available for small, medium and large enterprises. There are different types of financial program available in the market. How to select best accounting software for your business or personal need is a very tedious task.

The accounting practices differ from company to company and therefore some company prefer to develop their own program rather than purchasing from a company. You should hire a consultant, program engineer and an IT expert to have a look into reliability and performance of the program if you plan to build your own system. The best financial application is the one which can be easily customized and supports various add-ons.

Before you plan to purchase financial program you should do a little bit of market research and talk to the current clients of software about their experience with product. The program usually needs continuous maintenance and upgrades and there is also training cost of personnel associated with it. A detailed cost benefit analysis should be carried out before purchasing the product.

All programs usually comprises of two modules; one deals with core financial objective and the second deals with non core aspect of accounting. Core activities are book keeping, invoices, purchase and sales, expenses account, account receivables and payables and cash transactions.

The will help you in streamlining you accounts and current position of your business. This will help you in calculating profit and loss account and balance sheet. The non core module contains ERP, CRM, SCM, Reports, Summary, Payrolls, Employee expenses, purchase order tracking, Business intelligence, Professional time sheet and Manufacturing functions. These are all added feature and cater specific need of the business like a consultancy organization will need time sheet module whereas an export firm will not. Best financial application for your business is which fulfills your business need in a moderate budget.

There are several benefits associated with financial program. A detailed manual is given along with the program which makes the financial process easy to understand and makes the process accurate. They are available in the market in both open source and proprietary forms and are made according to the regulatory guidelines. You can scan your checks and various other receipts and store into the software which makes it very useful for personal and professional use.

They are very useful in audits. You can be paperless and with regular backup you can store all your files. Financial applications will help you in tax filing. It is very easy to trace records and check for a particular transaction or invoice with the software. You can synchronize the data with your CPA and get important advices on certain decisions. It is very easy to track inventory and maintain billing with it.

Accounting software is aimed at streamlining your financial management and tracking your transactions gives you current financial position of company and helps you in taking strategic decisions.

Use Peachtree Accounting Software to Get Your Business Numbers Right Every Time

Making your business numbers work is not a job that should be left solely to your accountant. While accountants do offer a valuable service that can help you with tax solutions and certain business strategies, you should still have everyday access to your financial data and know at all times what the bottom line number is for your business. You should have your company's financial data at your fingertips on a daily basis so you won't have to wait until the end of the month or the quarter to know where it stands. Peachtree accounting software makes this possible.

While Peachtree software doesn't necessarily replace professional accounting or CPA services, it does give you more control over your company's finances. The software enables you to see what the accountant sees through accurate financial reports and statements customized for your business structure. You'll be able to recognize when the numbers are up and when they're falling, and use this insight to make on-the-spot business decisions.

Business Growth

Using Peachtree software can also help with company growth. As your business grows, you might need to get a loan at the bank or establish a line of credit. You might wish to take on a partner or incorporate your business. When opportunities for growth arise, Peachtree enables you to gain immediate access to accurate financial statements that may be required.

Know the Bottom Line

The "bottom line" is where your business stands in terms of actual profits. It's how much is left after all expenses such as inventory purchases, utilities, building rent or mortgage, payroll, insurance, etc. has been paid. Many business owners don't realize that the cash flow in their business has nothing to do with the actual profit. This can cause overspending or poor decision making. With accurate accounting software like Peachtree Quantum or other version, you can know exactly how and where every penny is spent and make decisions accordingly. Peachtree will reveal to you where the cash flow is coming from and where it goes each and every day!

Features Your Business Can't Do Without

Not only does Peachtree offer in-depth accounting solutions, but it is based on real, double-entry principles and includes audit trails, auto accounting checks and security features for each screen. You can pick and choose which users have access to certain areas of Peachtree, while giving employees freedom to enter data for their department. This helps protect your company from embezzlement as well as audits.

With some software programs, there is worry of shortcuts being used that can easily cause your sensitive company data to be compromised. But Peach tree eliminates these worries, enabling you to run your business without the typical accounting woes.

As a small business owner looking forward to company growth, consider Peach tree software as your next investment. It's a great program to help you gain control of your business finances without losing focus on your goals - serving your customers! You can easily purchase Peach tree Quantum and other similar software products such as MAS 90 accounting software or MAS 200 software on the Web at reasonable pricing. Peach tree training is readily available if you need help getting started.

Making Money at Home - Consignment Selling on eBay

To define consignment selling, it involves selling items owned by others, from the sales of which you can get a percentage. The thing is: why would they let you sell it for them? To answer that, there are MANY people who have things to sell on eBay, they just don't know how. Or maybe they just don't have the time to organize such a business.

This is where you come in. With your know-how on getting around eBay, begin to collect items which you can sell on consignment. Pretty soon you'll be able to adjust to managing your eBay account, and you can also get used to dealing with the prices and percentages.

After you get the agreed-upon percentage of every sale you make, give the rest to the original owner. If something doesn't sell, all you have to do is take it down from the list and return it to the owner.

How do you get started?

First, ask within your family if they have things they are willing to sell. If they have, make sure they understand that you get a share from the sale. You can try selling what you already have and get the feel of managing the whole process. For things they don't use anymore, your family will be happy to get money from them.

Once you have been able to adjust, you can then proceed to advertising on local papers. It would be easier to have customers who are in the same area as you are, not to mention wiser. That way, you won't have to travel too far to meet them, saving you on effort and money. Thus, you get almost pure profit.

When your business grows, more people will be aware of it. Good for you if the word is spread among your relatives and friends. You'll be able to get more items and customers.

What is the reasonable percentage you can get?

Choose somewhere between 15-30% of the price. If you take lower than that, you might end up realizing that the money you make is not worth continuing the consignment business. If you demand higher than 30%, people will most likely not let you sell their stuff for them.

Now that you have an idea about consignment selling, why don't you try asking your family for stuff to sell? You'll have to select the items you think people will consider worth buying, and then you're all set. Lastly, don't ever, ever think of selling things without the owner's knowledge. This will cause you a lot of trouble and will delay your money-making opportunity.

The Benefits Of Accountants Reports In Small Business

It might sound apparent, but in operating a business, it's vital to recognize how the enterprise earns a profit. A company demands a good financial model plus a great profit model. A business sells merchandise or services and earns a certain sum of margin on each and every unit sold. The quantity of pieces sold will be the gross sales of the reports period. The enterprise deducts the amount of fixed costs for that interval, which gives them the actual operating earnings before interest costs and tax.

The primary functions of accountancy in a business enterprise are numerous but can be summarized into 4 distinct segments. The first would be to assist in the thorough recording of the goods and services for sale by a business enterprise. The second is to help in the systematic recording of the sums expended in earning the product sales described earlier. Thirdly accountants reports documents the amounts owed by a business at virtually any given point and fourthly it helps to keep a record of the resources owned by a company.

It is important to not mix up net profit with cash flow. Profit is equal to sales revenue minus business expenses. A number of corporate owners make the error of thinking that revenue equals cash inflow and also that the business expenditure is considered the same as cash outflow. The fact is that, this is incorrect. A company proprietor should never believe that sales revenue is equal to cash inflow and that expenses equate to cash outflows. Failing to make this essential accounting differentiation may end up with the wrong figures being utilized in decision making.

When it comes to documenting business income, cash or a different asset is increased. Typically the asset trade debtors or accounts receivable is increased in recording earnings data for product sales done on credit. Cash will only be increased after cash is received for credit sales or cash sales. Various expenses are generally recorded by decreasing an asset besides cash. As an example, expense of products put up for sale is recorded with a reduction to the stocks asset and wear and tear expense is recorded with a decrease to the book value of fixed assets. Furthermore, some costs tend to be recorded with an increase in the accounts payable liability or an increase within the accrued costs.

One another feature provided by accounting is cost management. Its generally forgotten basically because a whole lot of organizations don't consider this particular functionality significant enough to carry it out. Cost management as an accountancy feature provides critical benefits, like comprehending the revenue dynamics plus the fiscal shape of the business. Furthermore, it can help for preparing for alterations in the approaching accounting periods. Accountants' Cost management forces a company manager to concentrate on the components which need to be improved upon to increase revenue. A well thought out profit and loss accounts gives you the necessary structure for budgeting profit. It's often a very good strategy to look ahead to the coming year. If nothing else, at least put the figures within your profit report for sales volume, sales prices, product expenditure as well as other costs to see the way your predicted earnings looks for the coming accounting year.

Accounting isn't just about number crunching and tax bill. The practice of accounting helps a business organization run in so many distinctive way and it is essential for the success of any business enterprise.