An analysis of the definition of the term accounting

Financial Analysis

In investment finance, an outside financial analyst conducts a financial analysis for investment purposes. Operations costing — A combination of a process cost and a job order cost system, in which products are manufactured primarily by standardized methods, with some customization.


This formula for evaluation is typically done by either investors and internal company management since both need to understand how well a company is doing in order to make decisions. This ratio could be calculated for several similar companies and compared as part of a larger analysis.

A bottom-up approach, on the other hand, looks at a specific company and conducts similar ratio analysis to corporate financial analysis, looking at past performance and expected future performance as investment indicators. Labor quantity variance — The difference between actual hours times the standard rate and standard hours times the standard rate for labor.

Total units costs to be accounted for — The sum of the units costs started or transferred into production during the period plus the units costs in process at the beginning of the period. Methodologies in academic accounting research can be classified into archival research, which examines "objective data collected from repositories "; experimental research, which examines data "the researcher gathered by administering treatments to subjects "; and analytical research, which is "based on the act of formally modeling theories or substantiating ideas in mathematical terms".

Summary entry — A journal entry that summarizes the totals from multiple transactions. Target net income — The income objective set by management. Direct materials price standard — The cost per unit of direct materials that should be incurred.

It encompasses a broad range of research areas including financial accountingmanagement accountingauditing and taxation.

Hence this method essentially gives a short term profitability report for the company to analyse the profitability of their values. Process cost systems — An accounting system used to apply costs to similar products that are mass-produced in a continuous fashion.

Accounting research Accounting research is research in the effects of economic events on the process of accounting, and the effects of reported information on economic events. For example, return on assets ROA is a common ratio used to determine how efficient a company is at using its assets and as a measure of profitability.

Profitability analysis mainly helps in analysing this available information to evaluate and improve the profits in an organization. For example, an investor can use the horizontal analysis of the balance sheet to track the earnings per share ratio on a company he is thinking about investing in.

After a series of revelations involving irregular accounting procedures conducted throughout the s, Enron filed for Chapter 11 bankruptcy protection in December Further large mergers in the late twentieth century led to the dominance of the auditing market by the "Big Five" accounting firms: Activity-based costing — A cost accounting system that focuses on the activities performed in manufacturing a specific product.

Terms and definitions related to standard cost specifically and variance, are also included. These problems highlighted the need to review the effectiveness of accounting standardsauditing regulations and corporate governance principles.

This is done through the synthesis of financial numbers and data. In others, tax and regulatory incentives encouraged over-leveraging of companies and decisions to bear extraordinary and unjustified risk.

Accounting standards and Convergence of accounting standards Generally accepted accounting principles GAAP are accounting standards issued by national regulatory bodies. Predetermined overhead rate — A rate based on the relationship between estimated annual overhead costs and expected annual operating activity, expressed in terms of a common activity base.

It is calculated by dividing debt by equity. This accounting method plots the revenues against expenses that have been incurred during a certain given period of time. The act significantly raises criminal penalties for securities fraudfor destroying, altering or fabricating records in federal investigations or any scheme or attempt to defraud shareholders.

The cost and revenue elements involved give a broader analysis of the elements of profits. Read Next Profitability Market segments are classified into products, orders or the receivers customers or into a combination of any of these and SBUs include sales organizations or any other business areas.

In corporate finance, the analysis is conducted internally, using such ratios as net present value NPV and internal rate of return IRR to find projects worth executing. Each of these ratios requires the most recent data in order to be relevant.

The Management Dictionary covers over business concepts from 6 categories. Hence, this gives a long term profitability report which can be used with financial accounting. Advertisements Browse the definition and meaning of more terms similar to Profitability Analysis.

Cost accounting — An area of accounting that involves measuring, recording, and reporting product costs. Hence, this concludes the definition of Profitability Analysis along with its overview. Time ticket — A document that indicates the employee, the hours worked, the account and job to be charged, and the total labor cost.Over 4, accounting terms.

Largest online accounting dictionary. The go-to accounting glossary. Plain language definitions with sample applications. DEFINITION of 'Financial Analysis' Financial analysis is the process of evaluating businesses, projects, budgets and other finance-related entities to determine their performance and suitability.

Typically, financial analysis is used to analyze whether an entity is stable, solvent, liquid or profitable enough to warrant a monetary investment. Change in (1) an accounting principle; (2) an accounting estimate; or (3) the reporting entity that necessitates DISCLOSURE and explanation in published financial reports.

Accounting Cycle The sequence of steps followed in the accounting process to measure business transactions and transform the measurements into FINANCIAL STATEMENTS for a specific period. Those accounting terms are then also added to the VentureLine Accounting Dictionary.

So, the architecture and terms contained herein were developed by you our users. The result is an accounting dictionary or glossary that is relevant to today’s environment.

In my world of accounting for equity compensation, very simply, it is an analysis of the changes to equity compensation expense from period to period. For accountants, flux analysis is a powerful tool in forecasting, budgeting, and maintaining corporate integrity.

Accounting has variously been defined as the keeping or preparation of the financial records of an entity, the analysis, verification and reporting of such records and "the principles and procedures of accounting"; it also refers to the job of being an accountant.

An analysis of the definition of the term accounting
Rated 3/5 based on 57 review