Transaction Error Rate

It is quite common to observe transaction error while conducting the financial transactions. The cost of correcting these errors is far greater than the cost of prohibiting these errors initially. One of the various metrics to avoid the occurrence of … Continue reading

Sales to working Capital Ratio

In order to generate and maintain sales a business needs to invest some of its working capital. This working capital is invested in accounts receivable and the inventory of the business. The accounts payable are offset against these investments. This … Continue reading

Return on Capital Employed

The return on the capital employed is a financial indicator that is used to measure the proportion of adjusted earnings of the business to the amount of capital and debt that is used for the general operations and functions of … Continue reading

Reorder Level

Reorder Level is a term related to refilling the inventory. It is the level where a business, company or firm should order for a new purchase or start manufacturing a new batch to replenish their inventory as it has reached … Continue reading

Accounts Receivable Collection Period

The accounts receivable collection period can be defined as a period that is required to collect the accounts receivables for a business. In order to calculate the accounts receivable collection period the receivables are compared with the total sales of … Continue reading

Accounts Payable Days

Accounts payable days is the measure of the number of days that a company needs to pay its suppliers. If the number of days required for the payment increase from one period to the other or number of days increase … Continue reading

Sales Backlog Ratio

The Sales Backlog Ratio is a financial measurement of the ability of a business to maintain the current level of the sales of the business. This ratio is recorded on the trend line to find out whether the business is … Continue reading

Classified Balance Sheet

A classified balance sheet is a kind of balance sheet in which the assets, liabilities and equity accounts are further categorized into sub accounts or sub categories. The classification of the accounts into sub categories is quite useful as it … Continue reading

Return on Operating Assets

The return on operating assets is a financial ratio that deals with the measurement of revenue that is generated only from those assets that are actively being used. The major advantage of this ratio is that management doesn’t have to … Continue reading

Computerized Accounting

A computerized accounting system is a automated accounting system where the use of computer technology is used to manage the accounting processes of a business. A computerized accounting system is a great help in increasing the productivity of a business … Continue reading

Accounting System

An accounting system is a type of computerized information system that helps a business in maintaining and managing its accounts and financial transactions. A business has a very complex accounting system that consists of sales, purchase, transactions and other kind … Continue reading

Difference between Bill of Exchange and Cheque

A cheque is a kind of bill of exchange that is drawn on a specific bank or bank and is payable only on demand. There is a considerable difference between a cheque and a bill of exchange that can be … Continue reading

Information Analysis

Information can be defined as the processed form of data. When data is collected, inspected, cleaned and filtered it is transformed into the information. Information can be used by the high level management for the process of calculating, forecasting and … Continue reading

Disadvantage of Cost Accounting

Cost Accounting is not a logical and scientific branch of accounting as compared to the other branches. Cost accounting lacks a uniform procedure that can be applied to the businesses of the all industries. There are a number of limitations … Continue reading

Consigned Stock

A consigned stock is a stock that is legally owned by one company but physically kept by another company. The profit, loss, risks and rewards associated with the consigned stock are owned by the first party that is legal owner … Continue reading

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