Manufacturing Account

accountingexplained

So far, all previous posts deal with businesses that either sell goods (or products) to customers or services to customers. We have not been dealing with manufacturing company. A manufacturing company not only manufactures products but also sells them to other company. So, the existing preparation of accounts are not enough to record everything (the trading and profit and loss account and the balance sheet statement.) In this case, you will need to have another account drawn up; the manufacturing account.

In manufacturing account, you will need to be aware of new terms;

1) Direct costs – Costs that can be directly traced to making the products. Direct costs are categorised into direct materials, direct labour and direct expenses.

2) Indirect costs – Costs that cannot be directly traced to making the products.

3) Prime costs – All direct costs.

4) Factory overhead – Costs which occur in the factory…

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What’s so important and interesting about accounting

This is your brain on economics

In January, I took a very short intensive introductory course to financial accounting. When I first signed up for it, I cringed to think what my old Nietzsche-thesis advisor would think of such a practical and putatively boring endeavor. But I actually – I really mean this and I’m not just writing this to impress some future employer – found it very intrinsically interesting. So this will just be a brief post in which I’ll expend what I learned, by telling you what’s so interesting and important about accounting. After that, I want to give a brief intro to some of the basic ideas and concepts of accounting, partly because I had been frustrated, when I first started the course, that they are not usually explained well to people who are not already familiar with the field.

So first, what is financial accounting? I would define it as the set…

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Finding your Career path in the Accounting Profession

Think Numbers Trading Experiences

Finding your Career path in the Accounting Profession

Whether you chose to study accounting at University because you absolutely loved numbers or you somehow fell into this area, like a lot of people, wouldn’t you be interested to know where it can actually take you in the future.

I was in the second category of falling into accounting, after starting out with a business/computing degree at Uni.  After one semester of studying computing I realised this wasn’t for me and continued to complete a commerce (accounting) / business administration degree at Macquarie Unversity.  I’ll be honest that after studying accounting for 4 years and then finally working in this field, they were two completely different sides of the coin and it took me some time to adapt to working life and the real world challenges in the accounting profession.

It wasn’t until I studied the CA program through the Institute…

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Basic Accounting Concepts

Basic Accounting Concepts 2 – Debits and Credits

A tutorial to help you understand the bookkeeping/accounting concepts of Debits and Credits

Most people don’t find the math of Accounting as difficult as understanding the concepts of accounting, and for many there is no more difficult concept to grasp than that of Debits and Credits. Now the concept of Debits and Credits is actually more than 500 years old, being used extensively by the Venetian merchants of Italy in the 15th century Renaissance period. The concepts were first documented in Latin in the 1400’s and were later translated into English in the 16th century. Continue reading