Sales Mix and Quantity Variances

The sales volume variance has two components, the sales mix variance and the sales quantity variance. The sales mix variance shows the effect of the difference between the actual and budgeted sales mix. The sales quantity variance shows the effect of the difference between the actual volume sold at the budgeted mix and the budgeted volume.

Sales Mix and Quantity Variances July 18th, 2018Team
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Sales Variance Analysis in Accounting

The total sales variance sometimes referred to as the sales value variance is the difference between the actual sales and budgeted sales and can be split and analysed into the sales volume variance and the sales price variance.

Sales Variance Analysis in Accounting July 16th, 2018Team
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Partnership Appropriation Account

The net income from the profit and loss account is transferred to the partnership appropriation account in order that it can be adjusted for partner salaries, commissions, and interest. Any residual net income after adjustment is distributed to the partners.

Partnership Appropriation Account July 12th, 2018Team
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Departmental Accounting System

Departmental accounting is used by a business to assess the profitability of each of its departments using either the gross profit, contribution, or net profit method.

Departmental Accounting System July 4th, 2018Team
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Manufacturing Account Format

The manufacturing account is a general ledger account used by a manufacturer to accumulate production costs such as direct materials, direct labor and manufacturing overheads. The account is used to calculate the manufacturing cost of goods completed during an accounting period.

Manufacturing Account Format July 11th, 2018Team
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Trading Profit and Loss Account

The trading and profit and loss accounts are temporary accounts in the general ledger. The trading account shows the gross profit and is particularly useful for a trading business which buys and sells finished products as it allows the gross profit and gross profit percentage to be calculated.

Trading Profit and Loss Account July 2nd, 2018Team
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Sales Return Day Book

The sales return day book is used to record goods returned by customers. The sales return book is not part of the double entry posting and is simply a chronological list of credit notes issued to customers and used to post the accounts receivable and general ledgers.

Sales Return Day Book June 23rd, 2018Team
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Purchases Returns Day Book

The purchase return day book is used to record goods returned to suppliers. The purchase return book is not part of the double entry posting and is simply a chronological list of supplier credit notes used to post the accounts payable and general ledgers.

Purchases Returns Day Book June 5th, 2018Team
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Retirement of a Partner

When a partner retires the existing partnership is dissolved. To calculate the amount due to the retiring partner net assets are adjusted to fair value. Depending on the method of partnership accounting used bonus or goodwill journal entries may be necessary if the amount paid to the retiring partner differs from their adjusted net asset value.

Retirement of a Partner June 27th, 2018Team
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Equity Method of Accounting for Investments

The equity method of accounting reflects the economic reality of an investment transaction. By recording changes in the value of the investee business in an investment account the investor recognizes the significant influence it has over the operations of the investee.

Equity Method of Accounting for Investments June 5th, 2018Team
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Cash Flow Funding

The net cash flow in or out for a business for an accounting period must be matched by changes in cash flow funding.

If we use the example cash flow statement below, the top half of the cash flow statement shows the cash flows in and out due to operating. financing and investing activities the final figure (highlighted in green) represents the net cash flow out of the business, in this case £57,000. In order for this to happen, the business must match this cash flow out with additional funding.

Cash Flow Funding March 12th, 2018Team
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