After reading this article you will learn about the capital and revenue expenditure of a farm business. Allocation and receipt under Capital and Revenue is important when property is improved there are distinction made between: 1. Permanent improvement. 2. Current improvement. Permanent improvement appears in B.S. Current expenditures appear in Profit and Loss Accounts Revenue means income but revenue account [...]
This article throws light upon the three financial test ratios used to find out the state of profitability in the farm business. The financial test ratios are: 1. Cost Ratios 2. Capital Ratios 3. Income Ratios. 1. Cost Ratios: These show the relationship between costs and returns. Cost ratios are averages and their magnitude reflecting physical production efficiency, selection of [...]
This article throws light upon the top seven concepts of accounting. The concepts are: 1. The Money Measurement Concept 2. The Business Entity Concept 3. The Ongoing Concern Concept 4. The Cost Concept 5. The Dual Aspect Concept 6. The Accrued Concept 7. The Realisation Concept. Concept # 1. The Money Measurement Concept: The record is important in terms of [...]