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The other source of spontaneous short-term financing is the accrued expenses which arise by the general conduct of business. An accrued expense is an expense which has been incurre
Absolute liquid ratio - Liquidity ratios Although receivables debtors and bills receivable are usually more liquid than inventories yet there may be doubts regarding their rea
When to order-Material control If deliveries from suppliers normally take two weeks to arrive, then replenishment orders should be placed with them when the level of stocks rep
What are the Limitation of performance budgeting 1) It dose not facilitate qualitative evaluation. 2) The success depends on the well organized departments, but this may not b
The case of variable quantity discounts In practice, suppliers may offer different discounts for different quantities purchased. For illustration: Segment Quantity
Innova uses 1,056 units of the component IMC2 every month to manufacture one of its products. The unit costs incurred to manufacture the component are as follows. Direct material
A local government authority owns and operates a leisure centre with numerous sporting facilities, residential accommodation, a cafeteria and a sports shop. The summer season lasts
FLEXIBLE BUDGETING Flexible budget may be used in one of two ways: Planning and Control. At the planning stage when budgets are set, to reduce the effect of uncertainty. For ex
Introduction of zero base budgeting Steps involved in the introduction of zero base budgeting 1) Corporate objectives should be established and laid down in detail 2) Dec
Illustration of Graphic Analysis The four steps of cost-volume-profit analysis can be employed to graph and study any cost-volume relationship. Suppose that you have been aske
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