Question: What is FIFO?
Answer:
FIFO stands for First In,
First Out (FIFO).It is the method of
accounting for inventory whereby, quite literally, the inventory is assumed to
be sold in the chronological order in which it was purchased .
Question: What
is LIFO?
Answer:
LIFO stands for Last In,
First Out. A method of inventory accounting in which the most recently acquired
items are assumed to have been the first sold.
Question: What
is HIPO?
Answer
HIPO stands for
Highest-in-First-Out. It is the method of inventory accounting in which the
inventory with the highest cost of purchase is the first to be used or taken
out of stock.
Question: What
is Economic Order Quantity?
Answer:
Economic order quantity is the level of inventory
that minimizes the total inventory holding costs and ordering costs. It is one
of the oldest classical production scheduling models. It is also known as Wilson
EOQ Model or Wilson Formula.
Question: What are the
underlying assumptions of Economic Order Quantity?
Answer:
1. The ordering cost is
constant.
2. The rate of demand is
constant
3. The lead time is fixed
4. The purchase price of the
item is constant i.e no discount is available.
5. The replenishment is made
instantaneously, the whole batch is delivered at once.
Question: What is Job
Costing?
Answer:
Job
costing is Order-specific costing technique, used in situations where each job
is different and is performed to the customer's specification.
Question: What is Batch
costing?
Answer:
A type of job costing where a batch of identical
products is treated as an individual job. Per unit cost is determined by
dividing the total batch cost by the number of units produced.
Question: What is Integrated
Accounting System?
Answer:
It is a
system in which the financial and cost Accounts are inter locked to ensure that
all relevant expenditure is absorbed into the cost Accounts.
Question: What is the
Difference between variable costing and Absorption costing?
Answer:
The
main difference between absorption and variable costing is their treatment with
fixed manufacturing overhead.
Ø Under absorption costing,
fixed manufacturing overhead is included in the product cost i.e Both
variable and fixed manufacturing costs are included in unit product cost
Ø Under variable costing,
fixed manufacturing overhead is expensed outright i.e only variable costs are
included in unit product cost.
Question: What is standard costing?
Answer:
Standard costing is the
preparation and use of standard costs, their comparisons with actual cost and
the analysis of variance to their causes and points of incidence.
Question: What is Shadow Accounting System?
Answer:
Shadow Accounting System is an independent
accounting system for recording accounting entries separate from the entries in
an organization's accounting system of official record.
Question: What is Sub-ledger?
Answer:
Sub-ledger is ledger in which
individual accounts of the same type are kept (e.g. customers' accounts), the
aggregate of these accounts being maintained in a reconciliation account in the
general ledger
Question:
What is GAAP (Generally Accepted Accounting Principles)?
Answer:
A widely accepted set of rules, conventions,
standards, and procedures for reporting financial information, as established
by the Financial Accounting Standards Board.
Question:
What is Accounting Equation?
Answer:
Assets
= Liabilities + Owners' Equity
(Resources)
(Claims on the Resources)
Question: What is the Difference between Accounting
& Book-keeping?
Answer:
Ø Bookkeeping is the maintenance of the
company's financial records.
Ø
Accounting is the analysis and interpretation of that data for management and
planning purposes.
Question: What is Difference between Public
Accounting & Private Accounting?
Answer:
Ø Public accounting includes any accounting
work that a company performs for another company. Examples would be audits, tax
compliance, consulting, etc.
Ø Private accounting is accounting work that is
done for your own company. Every company has some form of an internal
accounting department and those employees would be considered private
accountants
Question: What are the Underlying Assumptions of
Accounting?
Answer:
1. Separate Entity Assumption: Business is an entity that
is separate and distinct from its owners, so that the finances of the firm are
not mixed with the finances of the owners.
2. Going concern Assumption: The business is going to be operated for foreseeable future
3. Monetary unit Assumption: The transaction must be
reported in the form of monetary unit i.e.,
Taka, US Dollar etc
4. Periodicity Assumption: Information should be
prepared and reported periodically (quarterly, Half-yearly, annually).
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