Most Popular Accounting Topics
High-Low Method
High-Low method is one of the several techniques which are used to split a mixed cost into its fixed and variable components. It is very simple technique but relatively unreliable ...
Inventory Turnover Ratio
Inventory turnover is the ratio of cost of goods sold to average inventory. It is an activity / efficiency ratio and it measures how many times per period, a business sells and replaces its inventory again ...
Break-even Point by Equation Method
Break-even is the point of zero loss or profit. At break-even point, the revenues of the business are equal its total costs and its contribution margin equals its total fixed costs ...
Adjusted Trial Balance
An Adjusted Trial Balance is a list of the balances of ledger accounts which is created after the preparation of adjusting entries. Adjusted trial balance contains balances of revenues and expenses along with those of assets, liabilities and equities ...
Accrual Concept
Business transactions are recorded when they occur and not when the related payments are received or made. This concept is called accrual basis of accounting and it is fundamental to the usefulness of financial accounting information ...
Recent Accounting Topics
Bank Reconciliation
A company's cash balance at bank and its cash balance according to its accounting records usually do not match. This is due to the fact that, at any particular date, checks may be outstanding, deposits may be in transit to the bank, errors may have occurred ...
Lower of Cost or Market (LCM) Rule
Lower of cost or market (LCM) rule states that inventory should be measured at cost or market value whichever is lower. This rule overrides the cost principle in case of inventory ...
Gross Profit Method of Inventory Estimation
Gross profit method (also known as gross margin method) is a technique used to estimate the value of ending inventory and cost of goods sold of a period on the basis of the historical or projected gross profit ratio of the business ...
Retail Method of Inventory Estimation
Retail method is a technique used to estimate the value of ending inventory using the cost to retail price ratio ...
Average Cost (AVCO) Method
Average cost method (AVCO) calculates the cost of ending inventory and cost of goods sold for a period on the basis of weighted average cost per unit of inventory ...