Accounting

Imprest System is a form of the financial accounting system. It is an accounting system designed to track and document how cash is being spent.…

Working Procedures of Activity-Based Costing System Activity-based costing (ABC) uses several cost pools, organized by activity, to allocate overhead costs. It is a costing method…

Concept of Cost-Volume-Profit Analysis (CVP Analysis) It is a method of cost accounting that looks at the impact that varying levels of costs and volume…

Goodwill is an intangible asset that arises when a buyer acquires an existing business. It is the established reputation of a business regarded as a…

Concept of Contribution Margin The contribution margin is the excess of sales revenue over variable costs. It is computed as the selling price per unit,…

Concept of Contribution Margin Ratio The contribution margin expressed as a percentage of sales revenue is known as the contribution ratio. The contribution margin ratio…

Approaches to Cost-Volume-Profit (CVP) Analysis Cost-volume-profit (CVP) analysis is used to determine how changes in costs and volume affect a company’s operating income and net…

Break-Even Ratio The break-even ratio for a property is the percentage of its gross operating income that the property needs to break even, i.e. for…

Break-Even Analysis Break-Even Analysis in economics, business, and cost accounting refers to the point in which total cost and total revenue are equal. It is…

Concept of the Margin of Safety The margin of safety (M/S) is the excess of budgeted (or actual) sales over the break-even sales. In accounting,…

Concept of CVP Analysis Under Changing Situations Cost-volume-profit analysis, or CVP, is something companies use to figure out how changes in costs and volume affect…

Common Assumptions in Cost-Volume-Profit (CVP) Analysis CVP analysis is used to determine how changes in costs and volume affect a company’s operating income and net…