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Added for You - Accounting Conventions and Accounting Concepts
Safety is a concern no matter where you travel in the world. Of course, some countries and cities will be safer than others will, but it is always important to be alert and to keep personal safety in mind when you travel. Before You Leave HomeBefore you go, make a photocopy of your passport and visas. Keep them with you, but separate from your actual passport. Also leave a set at home with someone you can contact easily. If you lose your passport, go in person to the nearest American Embassy or Consulate, and apply for a new one. If your passport has been stolen, file a police report, as you will need it when you reapply for a new passport. Having a copy of your passport will save time. If you are traveling with another person, have them come with you to help verify that you are an American citizen. Bring your U.S. driver’s license or other identification with you. If the consulate cannot verify your identification, you'll be given a limited validity passport and when you get back to the U.S. you will need to reapply.Travel SafetyIt is important to be on guard at airports, train and bus stations. These are areas where petty theft can easily occur. These areas are easily accessed by the public and have a lot of activity, which helps a thief wo
Due to this concept it is necessary to take into account during the accounting period, all items of revenue and expenses accruing on the date of the accounting year. The problem confronting this concept is that proper allocation should be made between capital and revenue expenditure. Otherwise the results disclosed by the financial statements will be affected.
(3) Realization
This concept emphasizes that profit should be considered only when realized. The question is at what stage profit should be deemed to have accrued? Whether at the time of receiving the order or at the time of execution
Deming advocates the use of statistics to control quality by measuring waste and defects in manufacturing. The maintenance of formal procedures is a prerequisite to certification under various quality codes. It goes further than Taylor because computing power simplifies the gathering and processing of data to measure performance against pre-determined standards and against a worker’s peers. As systems become quicker, cleverer and cheaper the use of computing for this area of control must increase Drucker also suggests that it is only Taylorism that has consistently raised the real level of manual workers’ wages. Superior service requires all employees to be mindful of customer needs, to bring them to the attention of management and be encouraged to suggest improvements.This alters the premise that managers “think” and workers “do”. The creation of learning organizations recognizes this and Argyris cites a number of examples where bad practices were allowed to perpetuate because old barriers were difficult to break down. Peters and Waterman urge organizations to become smaller and innovate to achieve excellence and survive. Innovation requires organizations to become less risk adverse. Kotter seizes upon this point and believes that managers need to become lead
The convention of relevance emphasizes the fact that only such information should be made available by accounting as is relevant and useful for achieving its objectives. For example, business is interested in knowing as to what has been total labor cost? It is not interested in knowing how much employees spend and what they save.
(2) Objectivity
The convention of objectivity emphasizes that accounting information should be measured and expressed by the standards which are commonly acceptable. For example, stock of goods lying unsold at the end of the year should be valued as its cost price not at a higher price even if it is likely to be sold at higher price in future. Reason is that no one can be sure about the price which will prevail in future.
(3) Feasibility
The convention of feasibility emphasizes that the time, labor and cost of analyzing accounting information should be compared vis-?-vis benefit arising out of it. For example, the cost of 'oiling and greasing' the machinery is so small that its break-up per unit produced will be meaningless and will amount to wastage of labor and time of the accounting staff.
Accounting Concepts
(1) Materiality
It refers to the relative importance of an item or event. Those who make accounting decisions continually confront the need to make judgments regarding materiality. Is this item large enough for users of the information to be influenced by it? The essence of the materiality concept is : the omission or misstatement of an item is material if, in the light of surrounding circumstances, the magnitude of the item is such that it is probable that the judgment of a reasonable person relying on the report would have been changed or influenced by the inclusion or correction of the item.
(2) Accounting period
Though accounting practice believes in continuing entity concept i.e. life of the business is perpetual but still it has to report the 'results of the activity undertaken in specific period (normally one year). Thus accounting attempts to present the gains or losses earned or suffered by the business during the period under review. Normally, it is the calendar year (1st January to 31st December) but in other cases it may be financial year (1st April to 31st March) or any other period depending upon the convenience of the business or as per the business practices in country concerned.
Due to this concept it is necessary to take into account during the accounting period, all items of revenue and expenses accruing on the date of the accounting year. The problem confronting this concept is that proper allocation should be made between capital and revenue expenditure. Otherwise the results disclosed by the financial statements will be affected.
(3) Realization
This concept emphasizes that profit should be considered only when realized. The question is at what stage profit should be deemed to have accrued? Whether at the time of receiving the order or at the time of execution
Employee time clocks are time systems used by organizations to accurately record the number of hours worked by each employee every week. The clocks have evolved with time and the companies still need some sort of system that they can use to generate payroll and ensure that the employees are paid for each hour they worked. Today, employees use swipe cards with a magnetic stripe through a slot that reads their name and records the time every time they clock in or out, much like the old punch clock system of long ago.At the end of a work week, the main computer computes the total hours worked for every employee and prints it out on a spread sheet. This rids the payroll system of human error, making it much more efficient. The employee time clock has been linked to a factory’s employee productivity. It is commonly placed near the main entrance or break room. An employee who is not paid for break time must clock out for a break and must also remember to clock in before resuming work after the break.Sometimes, it is found that employees try to use the time clock to gain an advantage. For instance, employees may clock in or out for each other. This is why company rules and time clock technology keep changing in order to keep employee misdeeds in check. Company
(3) Feasibility
The convention of feasibility emphasizes that the time, labor and cost of analyzing accounting information should be compared vis-?-vis benefit arising out of it. For example, the cost of 'oiling and greasing' the machinery is so small that its break-up per unit produced will be meaningless and will amount to wastage of labor and time of the accounting staff.
Accounting Concepts
(1) Materiality
It refers to the relative importance of an item or event. Those who make accounting decisions continually confront the need to make judgments regarding materiality. Is this item large enough for users of the information to be influenced by it? The essence of the materiality concept is : the omission or misstatement of an item is material if, in the light of surrounding circumstances, the magnitude of the item is such that it is probable that the judgment of a reasonable person relying on the report would have been changed or influenced by the inclusion or correction of the item.
(2) Accounting period
Though accounting practice believes in continuing entity concept i.e. life of the business is perpetual but still it has to report the 'results of the activity undertaken in specific period (normally one year). Thus accounting attempts to present the gains or losses earned or suffered by the business during the period under review. Normally, it is the calendar year (1st January to 31st December) but in other cases it may be financial year (1st April to 31st March) or any other period depending upon the convenience of the business or as per the business practices in country concerned.
Due to this concept it is necessary to take into account during the accounting period, all items of revenue and expenses accruing on the date of the accounting year. The problem confronting this concept is that proper allocation should be made between capital and revenue expenditure. Otherwise the results disclosed by the financial statements will be affected.
(3) Realization
This concept emphasizes that profit should be considered only when realized. The question is at what stage profit should be deemed to have accrued? Whether at the time of receiving the order or at the time of execution
Did you know that somewhere around 50% of all websites have one or more of the following problems?* typing errors* spelling mistakes* grammatical problems* punctuation problems.Wow! A whopping 50%!Hard to believe??No, I don't think it is.In my daily business life I briefly skim or read anywhere up to hundreds of web pages, brochures, flyers, business cards and emails per day.I'm lucky - I've got a *proofreader's eye* [I'll give it back soon - haha] which means that mistakes like those mentioned above just JUMP OFF THE PAGE and draw my attention to them.I can't help myself - I'm a wordsmith, a lover of words, and despite all those years at school with my eyes rolling back in my head with boredom during the English class, the information somehow seeped into my brain and it stuck.Now I'm one of those people who wants to correct the mistakes on restaurant menus, much to the horror of my friends and biz associates. I used to carry a red pen [to make corrections ... :o>] but I've been banned from doing that.How many times have I seen this doozy, in print, on websites and on big signs and billboards outside stores:*For all your stationary needs, visit Blahblahblah Company!*Se
(1) Materiality
It refers to the relative importance of an item or event. Those who make accounting decisions continually confront the need to make judgments regarding materiality. Is this item large enough for users of the information to be influenced by it? The essence of the materiality concept is : the omission or misstatement of an item is material if, in the light of surrounding circumstances, the magnitude of the item is such that it is probable that the judgment of a reasonable person relying on the report would have been changed or influenced by the inclusion or correction of the item.
(2) Accounting period
Though accounting practice believes in continuing entity concept i.e. life of the business is perpetual but still it has to report the 'results of the activity undertaken in specific period (normally one year). Thus accounting attempts to present the gains or losses earned or suffered by the business during the period under review. Normally, it is the calendar year (1st January to 31st December) but in other cases it may be financial year (1st April to 31st March) or any other period depending upon the convenience of the business or as per the business practices in country concerned.
Due to this concept it is necessary to take into account during the accounting period, all items of revenue and expenses accruing on the date of the accounting year. The problem confronting this concept is that proper allocation should be made between capital and revenue expenditure. Otherwise the results disclosed by the financial statements will be affected.
(3) Realization
This concept emphasizes that profit should be considered only when realized. The question is at what stage profit should be deemed to have accrued? Whether at the time of receiving the order or at the time of execution
In today's competitive business world, a trade show offers a simple and convenient way to target prospective buyers. To attract them, a full size, full-color custom trade show display is the best way to get your company noticed in any trade show exhibition. It will create a polished and professional image for your company. The displays should be eye-catching and full of graphics attract customers.The question arises about what the most suitable trade show display is. There are several varieties of trade show displays available, and it is difficult to choose the right one. Always go for easy-to-transport, easy-to-set up portable trade show displays to avoid wasting time with setup during the exhibition. The display should be attractive with a clear message of your product so that it can draw attention of new buyers. Most often, you have only five seconds to grab the attention of the potential customers walking past your booth.The flexibility of trade show displays is very important in order to give a new look to your display every day by changing layout. Portability helps you transport and set up the display without wasting any time. The display should contain all the necessary materials to make an impact in any tradeshow.There are several compani
(2) Accounting period
Though accounting practice believes in continuing entity concept i.e. life of the business is perpetual but still it has to report the 'results of the activity undertaken in specific period (normally one year). Thus accounting attempts to present the gains or losses earned or suffered by the business during the period under review. Normally, it is the calendar year (1st January to 31st December) but in other cases it may be financial year (1st April to 31st March) or any other period depending upon the convenience of the business or as per the business practices in country concerned.
Due to this concept it is necessary to take into account during the accounting period, all items of revenue and expenses accruing on the date of the accounting year. The problem confronting this concept is that proper allocation should be made between capital and revenue expenditure. Otherwise the results disclosed by the financial statements will be affected.
(3) Realization
This concept emphasizes that profit should be considered only when realized. The question is at what stage profit should be deemed to have accrued? Whether at the time of receiving the order or at the time of execution
Are you considering the possibility of opening a dollar store? If so, then learn everything possible from your competitors. Spend a little time examining the competition before, during and after you conduct your grand opening event. Visit direct competitors as well as stores that will overlap with your store for customers.Learn what your direct competitors are doing. Start with competitors in the immediate area of your store. Then work your way away from your store in an ever-increasing area. Be sure to include well known and larger stores even if they are well away from your operation. These bigger players can have a huge impact on you when you are opening a dollar store.Find out about products that are carried, special promotions that might be going on, methods for displaying merchandise, as well as the general operation of their stores. How is their customer service? How do they treat customers at the checkout area? Is the store clean and well organized? Are there very many customers in the store? Look at everything that makes each competitor stronger. Look for things that make each competitor weaker. You will likely use this information when you are opening a dollar store.Carry a small notebook with you. Note the store, positive things that
Due to this concept it is necessary to take into account during the accounting period, all items of revenue and expenses accruing on the date of the accounting year. The problem confronting this concept is that proper allocation should be made between capital and revenue expenditure. Otherwise the results disclosed by the financial statements will be affected.
(3) Realization
This concept emphasizes that profit should be considered only when realized. The question is at what stage profit should be deemed to have accrued? Whether at the time of receiving the order or at the time of execution of the order or at the time of receiving the cash. For answering this question the accounting is in conformity with the law (Sales of Goods Act) and recognizes the principle of law i.e. the revenue is earned only when the goods are transferred. It means that profit is deemed to have accrued when 'property in goods passes to the buyer' viz. when sales are affected.
(4) Matching
Though the business is a continuous affair yet its continuity is artificially split into several accounting years for determining its periodic results. This profit is the measure of the economic performance of a concern and as such it increases proprietor's equity. Since profit is an excess of revenue over expenditure it becomes necessary to bring together all revenues and expenses relating to the period under review. The realization and accrual concepts are essentially derived from the need of matching expenses with revenues earned during the accounting period. The earnings and expenses shown in an income statement must both refer to the same goods transferred or services rendered during the accounting period. The matching concept requires that expenses should be matched to the revenues of the appropriate accounting period. So we must determine the revenue earned during a particular accounting period and the expenses incurred to earn these revenues.
(5) Entity
According to this concept, the task of measuring income and wealth is undertaken by accounting, for an identifiable Unit or Entity: The unit or entity so identified is treated different and distinct from its owners or contributors. In law the distinction between owners and the business is drawn only in the case of joint stock companies but in accounting this distinction is made in the case of sole proprietor and partnership firm as well. For example, goods used from the stock of the business for business purposes are treated as a business expenditure but similar goods used by the proprietor i.e. owner for his personal use are treated as his drawings. Such distinction between the owner and the business unit has helped accounting in reporting profitability more objectively and fairly. It has also led to the development of "responsibility accounting" which enables us to find out the profitability of even the different sub-units of the main business.
(6) Stable Monetary Unit
Accounting presumes that the purchasing power of monetary unit, say Rupee, remains the same throughout. For exampl
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