Home Financial Management

Financial Management

What is Convention of Conservatism? It is also known as 'doctrine of prudence'. Convention of Conservatism states to anticipate all the future losses and ignore gains.The managers who are responsible for running the business successfully are also human beings. They always try to give a favorable report for the business...
What is Material Price Variance? Material Price Variance is the difference between the standard price and the actual price per unit of material input, multiply by actual quantity of material used.It is a direct material variance. All the direct material variances takes into consideration actual output quantity of a period....
What is Dual Aspect Concept? Dual Aspect Concept - This accounting concept states that there are two aspects of each and every transaction that is debit and credit of equal amount.The economic resources of an entity or organisation is known as assets. And the claims of various parties against these...
What is Money Measurement Concept? In Financial Accounting, accountants records transaction which are measurable in monetary terms. This is because, money provides a common denominator by which different kind of facts about an entity or organisation can be expressed in numerical term. This result in addition and subtraction easy. According to...
What is Debenture Redemption Reserve? Debenture Redemption Reserve (DRR) refers to as a reserve representing retention out of profits for redeeming the debentures. In other words, debenture redemption reserve is a reserve which is made out of the organisation's profits for the purpose of redemption of the debentures. Section 117C of...
What is Partner's Capital Accounts? Partner's Capital account is that account which records the transactions that takes place between partners and the firm. A separate capital account is maintained for each partner. For example, there are three partners in a firm say, A, B, C. There will be three capital...
What is Partnership in Accounting? According to Section 4 of Indian Partnership Act, 1932, Partnership in accounting is "the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all."Persons who have entered into a partnership with another...
What is Goodwill in Accounting? Goodwill in accounting is something which places an organisation at an advantageous position due to which enables the organisation to earn profit without putting extra efforts. These efforts are made in the past but the benefit is either reaped today or in the upcoming future....
What is Income and Expenditure Account? Income and Expenditure Account is a nominal account. It is just like the Profit and Loss Account of a firm. Since non profit organisations are not formed from the motive of earning profit, they do not prepare any profit and loss account. But they...
What is Receipts and Payments Account? Receipts and Payments Account is a classified summary of Cash book. It is prepared under appropriate heads alongwith cash and bank balances in the beginning and at the end of the accounting period. Receipts appears on the debit side whereas payments appears on credit...
What is Over subscription of shares? Over subscription of shares refers to the situation when the number of shares applied for is more than the number of shares offered for subscription. But it is also true that company cannot allot shares more than those offered for subscription. In case of...
What is Securities Premium? A share may be issued at an amount more than the face value. It is the case of issue of shares at premium. For Example - a share whose face value is Rs. 10 may be issued at Rs. 20. Here the premium is Rs. 10...