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DISTRUST OF STATISTICS Distrust of statistics means lack of confidence in the statistical methods and statements. As statistics suffers from various limitations, that is the reason statistics become a thing of distrust. ACCORDING TO YULE AND KENDALL “Statistical methods are most dangerous tools in the hands of an inexpert.” The following are the points that…
LIMITATIONS OF STATISTICS Undoubtedly, statistics has universal applicability, but there are also some facts which prove as limitations of statistics. ACCORDING TO NEWSHOLME “Statistics must be regarded as an instrument of research of great value but having severe limitations which are not possible to overcome and as such need our careful attention.” The limitations…
MEANING Divisible Profits are the profits that are legally available for distribution among the shareholders by way of dividend. These are the profits which the directors consider should be distributed after making provision for past losses and reserves. LEGAL RESTRICTIONS UNDER SECTION 123 (1): As per this section, the payment of dividends can be made…
BALANCE SHEET AS PER COMPANIES ACT 2013 Balance sheet is a statement of financial position of a company at a specified moment of time. It shows the company’s assets on one side and company’s liabilities on the other side. It tells about the solvency, profitability and liquidity position of the firm. Section 129 of the…
The difference between Departmental and Branch Accounting is as follows: DEPARTMENTAL ACCOUNTING Departmental Accounting refers to maintaining accounts for one or more departments of the company. Revenues and expenses of the department are recorded and reported separately. The departments are then consolidated into the accounts of the head office to prepare the financial statements of…
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INCORPORATION OF BRANCH TRIAL BALANCE Branch and Head office belongs to the same owner. It is must to prepare the consolidated accounts of both. To prepare the consolidated accounts of the head office, the branch trial balance is incorporated in the books of the Head Office. The Incorporation of Trial Balance means the recording or…
METHODS OF BRANCH ACCOUNTING Branch Accounting means recording of business transactions of a branch for the purpose of calculating its profit or loss for an accounting period. OBJECTIVES OF BRANCH ACCOUNTING TO ASCERTAIN PROFIT OR LOSS AT BRANCH: Every business house wants to measure the performance of its branches separately. Hence, separate records for each…
DIFFERENT TYPES OF BRANCHES Branches are the various divisions of business located in different places either in the same town or in different towns. Main business house can be called Head Office which controls the affairs of the branches. Branches may be opened for the purchase of raw materials, production of goods, purchase of goods,…
INTER-DEPARTMENTAL TRANSFERS The goods transferred by one department to another department is called inter-departmental transfers. The rule applies to inter-departmental transfers is: Debit the Receiver Credit the Giver The department sending the goods is debited and the account of receiving department is credited. Inter-departmental transfers is made on the following basis: INTER-DEPARTMENTAL TRANSFER AT COST…
Allocation of expenses in departmental accounting Departmental Accounting refers to maintaining accounts for one or more departments of the company. Revenues and expenses of the department are recorded and reported separately. The departments are then consolidated into the accounts of the head office to prepare the financial statements of the company. The Allocation of expenses…
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