Basic Concepts of Financial Accounting for CPA Exam - Online Syllabus Topics for Financial Accounting Course

Characteristics of Depreciation

Depreciation has the following characteristics or attributes: (1) Depreciation is only charged on non-current assets. (2) Depreciation occurs from the date of purchase of an…
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Depreciation

Non-Current Assets and Depreciation – Definition, Concept and Explanation: Non-current assets are purchased by a business not for resale but to be used within the…
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Aging Schedule of Trade Receivables

Definition and Concept of Aging Schedule for Calculating Provision for Doubtful Debts: Sometimes provision for doubtful debt is calculated with the help of aging schedule…
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Provision for Doubtful Debts

Concept and Definition of Provision for Doubtful Debts or Allowance for Bad Debts or Allowance for Un-Collectible Accounts: Businesses usually create a provision for doubtful…
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Bad Debts and Doubtful Debts

Bad Debts, Trade Receivables and Doubtful Debts – Definition, Example, General Journal Entry and their Difference: Bad Debts: A bad debt is a debt that is…
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Bank Reconciliation Statement

Definition, Meaning and Need for BRS: If there is any discrepancy between the cash book balance and that of bank statement, then the business prepares…
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Absorption of Overheads

Absorption of Overheads or Cost Recovered – Definition, Procedure and Formula: Once total production overheads (calculation of overhead absorption rate) of production cost centers are…
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Calculation of Overhead Absorption Rate

Basis (Methods) for Calculating Overhead Absorption Rate: The production overheads calculated for each production department after going through apportionment and allotment are used to calculate…
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Overhead Absorption Rate

Overhead Absorption Rate (OAR’s) or Overhead Recovery – Definition, Uses and Types: Actual amount of overheads cannot be accurately determined at the time of producing…
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Allotment of Reciprocal Services

What is Allotment of Reciprocal Services Method or Re-Apportionment Method or Allocation of Service Department Overheads to Production Department Overheads? Definition and Procedure: A type…
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Allotment of Non Reciprocal Services

What is Allotment of Non-Reciprocal Service Method? Definition and Procedure: A type of cost allocation method (allotment of non-reciprocal service method) in which the usual procedure…
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Cost Center and Cost Unit

Difference between Cost Center and Cost Unit: Cost Center – Definition, Types and Examples: Cost center includes a production or service location, function, activity or…
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Absorption Costing

Definition of Absorption Costing (Total Costing or Total Production Cost): Absorption costing or total costing or total production cost means all costs that are involve…
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Cash Budget Format and Example

Cash Budget Format and its Explanation with Solved Example: Cash Budget For the period ending……….. Solved Example: The directors of Kingston & Co. were concerned…
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Introduction to Cash Budget

Definition and Explanation: Of all the components of the master budget, none is more important than the cash budget. Liquidity is of paramount importance to…
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Abandonment of a Product Line

Decision for Abandonment (Close) of a Product or Department – Explanation with Solved Examples: When a product line or department of business is unable to…
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Make or Buy Decision

Explanation with Solved Example: Sometimes businesses encounter a situation where they have to decide between making a particular product themselves or to buy it from…
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Profit Volume Chart

Definition and Explanation: “Profit volume chart is a straightforward relationship of profits to sales level”. Break even chart does not directly show the amount of profit….
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Margin of Safety

Definition – Margin of Safety (MOS): Margin of safety (MOS) is defined as; “it is the difference between the actual or budgeted sales as the case…
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Break Even Chart

Explanation of the Concept of Break Even Analysis with Diagram: Break even chart may be prepared in different forms and styles; but they all in…
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Target Profits

Definition, Explanation and Formula: Every business make plan to earn a specific amount of profit for a specific fiscal year, this profit is known as…
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Break Even Point

Definition: Break even point shows the output level (units produced or services rendered) at which total revenues just equals to total costs or point at…
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Break Even Analysis

Introduction to Break Even Analysis: Definition, Use and Components of Break-even Analysis: Break-even indicates a situation where; there is no profit or loss for a…
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Marginal Costing

Definition and Explanation of Marginal Costing (Direct or Variable Costing): Marginal costing is simply a technique to analyze cost information for decision making process. Different terms…
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Marginal Cost

Definition and Explanation: Marginal means Extra. Marginal cost is defined by CIMA as “the cost of one unit of a product or service which would…
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Explains financial and managerial accounting. Exercises, problems, calculators and more.

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