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In this method, approximation of various assets here excluding cash and including liabilities are made getting into consideration the transactions in the ensuring period. Afterward, a balance sheet is prepared that depends on these forecasts. Liabilities and Assets are termed as 'Projected balance sheet'. The dissimilarity between liabilities and assets of this balance sheet is termed as shortage or surplus cash of such period. If the net liability is more than net assets, this represents excess cash that is not needed by the firm. The management may plan for such investment. Conversely, if total assets are more than net liabilities, so it shows the deficiency of working capital that is to be arranged through the management either from bank overdraft or by the other sources.
Assigning Costs and Assets After identifying its value chain, a firm must assign operating activity and assets to value activities. Operating costs must be assigned to the act
Graphic method of break even analysis or break even chart The break even point can also be computed graphically. A break even chart is a graphical representation of marginal co
10 questions
what is the computation procedure of accounting rate of return?
a) Calculate and discuss the nature and role of accounting for business enterprise. b) Determine and discuss the desirable qualities expected from the prep
question:lease accounting implicit rate unknown,20%incremental rate leaseterm 4 years,find implicit rate using trial and error method.i know nothing about trial and error method in
What is Production cost It begins with the supplying of materials, labour and services and ends with the primary packing of the product. Therefore, it includes the cost of d
Disadvantages of ratio analysis 1) False results: ratios are based upon the financial statement. In case financial ratio is incorrect or the data upon which ratios are based
what is Long term budgets Long term budgets: The budgets are prepared to depict long term planning of the business. The period of long term begets various between five to ten
The firm's require holding cash may be attributed to the three motives specified below: The transaction motive The precautionary motive The speculative motive.
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