In any business, Gross income is the main statement for taxation but to know net income, you need to reduce expenses from it, with a perfect expense entry software you can reach net income easily. There are many software in Dubai markets and you can use them for journal entry of expenses. here we will […]READ ARTICLE
There many business owners in Dubai that they need an honest guides to know how to order software and automate their business accounts department. so that, a free consultation of accounting in Dubai, could be a advantage for you to know what you need really for your accounts department.
Without a true consultation maybe there are many hidden charges along buying more than one software but without real usage and again re-use paper system for accounting.
we have free consultation services to analyze and map your business into a routine of accounting software.
Before any purchase or order any accounting software, you can use our free consultation about accounting.
Steps of order a custom accounting software
- Our salesperson will talk to you about your business, he will check your financial transactions on papers and so that, he will adjust list of modules you need to enter your vouchers to get the best statements and reports.
- Our salesperson will calculate price of custom software and after agreement with you and your down payment, in one week, we will prepare a special version of iGreen accounting compatible with your business.
- It will be installed by our salesperson or we will send its download link (if you have anybody to install the software)
- We will be beside you to help and guide you for recording your vouchers and invoices and we will check frequently your suggestion to optimize iGreen accounting as the best as you want.
Updates of software
We also adjust yearly main updates for iGreen accounting to suport you keep your business accounting’s modules updates regard accounting standard of economic department of United Arab Emirates’ government
We will arrange a suitable time for you to have meeting with our salesperson in your office or company.
Note: Our consultation of accounting is free for Dubai location only. other location will be start with online meeting at the first and next meeting will arrange in Dubai by invite you.
Screenshots and images of accounting software could help you to select an accounting software for your accounts department. With looking at images, you don't need to waste your time for installation of accounting software one by one. You can quickly look at screenshots of any accounting software to see what it offers you.
It is important to check what types of vouchers and invoices, you want to have in an accounting software. some of accounting programs are strong in manufacturing department but some of them are strong in shopping accounting. so that, it is not true if an accounting software is strong in another field could be strong in your accounts department.
Images of Quickbooks Accounting Software
Quickbooks accounting has been used widely in United state of America. it is a software product of Intuit software company.
Images of Peachtree Accounting Software
Images of iGreen Accounting Software
The most important benefits of iGreen accounting are:
- A real free accounting software
- Unlimited levels in Chart of accounts
- Tree-veiw chart of accounts
- Tree-view list of items and goods
- Unlimited photo of products
The example demonstrated here illustrates opportunities for using e-business in construction processes. The example Node .4253 described is that of an innovative procurement process. Node 4253 incorporates the concept of using I-components for the door ordering process. The process of selecting a product supplier (in this case the door supplier) requires input from the client brief, door detail drawings […]READ ARTICLE
An account software usually will be used for double journal entry but accounting software will be used for sales and stock management. In an account software, the first and the most important section is chart of accounts. advanced account software will let you to manage chart of accounts of your business very professionally but in […]READ ARTICLE
By using discounted cash flow techniques and calculating present values, we can compare the return on an investment in capital projects with an alternative equal risk investment in securities traded in the financial market, Suppose a firm is considering four projects (all of which are risk-free) as shown in below photo. You can see that each of the projects […]READ ARTICLE
Our objective is to calculate and compare returns on an investment in a capital project with an alternative equal risk investment in securities traded in the financial markets. This comparison is made using a technique called discounted cash flow (DCF) analysis. Because a DCF analysis is the opposite of the concept of compounding interest, we shall initially […]READ ARTICLE
There are six institutions of professionally qualified accountants currently operating in the UK. All jealously guard their independence and the many attempts to merge over the past few years have all failed.
Chartered Professional Accountants
- institute of Chartered Accountants in England and Wales (ICAEW)
- Generally auditing, financial accounting, management consultancy, insolvency and tax advice. However, many work in industry.
- institute of Chartered Accountants in Ireland ( lCAl )
- Similar to ICAEW.
- institute of Chartered Accountants of Scotland (ICAS)
- Similar to ICAEW.
- Association of Chartered Certified Accountants (ACCA)
- Auditing, financial accounting, insolvency, management consultancy, and tax advice. Many train or work in industry.
- Chartered institute of Management Accountants (CIMA)
- Management accounting
- Chartered institute of Public Finance and Accounting (CIPFA)
- Accounting within the public sector and privatized industries.
ACCA: The ACCA's members are not so easy to pigeonhole as the other professionally qualified accountants. They work both in public practice as auditors and as financial accountants. They also have an enormous number of overseas students. Many certified accountants train for their qualification in industry and never work in public practice.
CIMA: This is an important body whose members generally train and work in industry. They are found in almost every industry, ranging, for example, from coal mining to computing. They mainly perform the management accounting function.
CIPFA: This institute is smaller than the ICAEW, ACCA or CIMA. It is also much more specialized with its members typically working in the public sector or the newly privatized industries, such as Railtrack. CIPFA members perform a wide range of financial activities within these organisations, such as budgeting in local government.
The main second-tier body in the UK is the Association of Accounting Technicians. This body was set up by the major professional accountancy bodies, Accounting technicians help professional accountants, often doing the more routine bookkeeping and costing activities.
Many accounting technicians go on to qualify as professional accountants. The different accountancy bodies, therefore, all perform different functions. Some work in companies, some in professional accountancy practices, some in the public sector.
The accountant working for a company
The professional accountant in a partnership
The banker, who, while not strictly an accountant, serves much the same ends in a separate and semi-isolated unit
The auditing accountant to whom everything is (officially) revealed, and who then grants absolution.
Limitations of Accounting
Accounting, therefore, measures business transactions in numerical terms. It thus provides useful information for
managers and other users of accounts. It is, however. important to appreciate certain limitations of accounting.
- Accounting tends to measure the cost of past expenditures rather than the current value of assets.
- Traditional accounting does not capture non-financial aspects of business. Thus, if an industry pollutes the air or the water, this is not recorded in the conventional accounts. Nor does traditional accounting measure the human resources of a business or its knowledge and skills base. The accounts can' thus' only give a partial picture of a business's activities.
Accounting Firms in UK
The merits of historical cost accounting and the advantages and disadvantages of the competing alternative measurement systems have been debated vigorously for at least 40 years. However, with some rare exceptions, most companies worldwide still use historical cost. for example This is not to say that experimentation has not occurred in the Netherlands, for a […]READ ARTICLE
Historical cost has always been the most widely used measurement system. Essentially, transactions are recorded in the books of account at the date the transaction occurred.
This original cost is maintained in the books of account and not updated for any future changes in value that might occur.
if we paid £5,000 for a building in 1980, this will be the cost that is shown in the balance sheet when we prepare our accounts in 2006. This is even when the building has increased in value to say £20,000 through inflation.
The depreciation will be based on the original value of the asset(i.e., f5,000 not t20,000)
The main strength of historical cost is that it is objective. In other words, you can objectively verify the original cost of the asset. You only need to refer to the original invoice. In addition, historical cost is very easy to use and to understand. Finally, historical cost enables businesses to keep track of their assets. There is, however, one crucial problem with historical cost. It uses a fixed monetary capital maintenance system, which does not take inflation into account. This failure to take into account changing prices can cause severe problems. In particular, as Soundbite 12.2 shows, it may not accurately value a company's worth Replacement
Historical Cost and Asset-Rich Companies
The balance sheets of asset-rich companies, such as banks, may not reflect their true asset values, if prepared under historical cost accounting. Why do you think this might be? f we take banks and building societies as examples of asset-rich companies, these businesses have substantial amounts of prime location fixed assets occupy properties in central locations. These properties were also often acquired many years indeed possibly centuries ago. ago, Using strict historical cost, these buildings would be recorded in the balance sheet at very low amounts. This is because over time money values have changed. If a prime site was purchased for £1,000 in 1700 that might have been worth a lot then. Today, it might be worth say £400 million. Thus, fixed assets will be radically understated, unless revalued.
Replacement cost attempts to place a realistic value on the assets of a company
It is concerned with maintaining the operating capacity of a business. Essentially, replacement cost asks the question:
what would it cost to replace the existing business assets with identical, equivalent assets at today's prices? Replacement cost is an alternative method of measuring the assets and profits of a business rather than principally a method of tackling inflation. In the Netherlands, replacement costing has been successfully used by many businesses, such as Heineken. As The Company Cam era 12.1 shows, Heineken values its tangible fixed assets at replacement cost based on expert valuation. the problem for the Dutch is not I convincing rest of the world that it so much the difficulties of using replacement cost, but of the is a worthwhile system.
Example of Replacement Cost
Replacement Cost in SmithX Tangible Fixed Assets(Property, Plant and Equipment)
Except for land, which is not depreciated, tangible fixed assets are stated at replacement cost less accumulated depreciation. The following average useful lives are used for depreciation purposes:
- Buildings 30-40 years
- Plant and equipment 10-30 years
- Other fixed assets 5-10 years
The replacement cost is based on appraisals by internal and external experts, taking into account technical and economic developments. Other factors taken into account include the experience gained in the construction of breweries throughout the world. Grants received respect of investments in tangible fixed assets are deducted from the amount of the investment. Projects under construction are included at cost.
Read more: Historical Cost Valuation in Real Life
Measurement systems underpin not only profit, but also asset valuation. Essentially, a measurement system is the way in which the elements in the accounts are valued. Traditionally, historical cost has been accepted measurement system. Incomes, Expenses, Assets and liabilities have been recorded in the accounting system at cost at the time that they were first recognized. […]READ ARTICLE
Fixed assets must be differentiated from current assets and investment assets. Current assets are assets with a value available to the business in the short term, which is usually taken to mean up to a year. These are cash and assets used in the course of business, such as stock and debtors(money owing by customers). […]READ ARTICLE
It is about how businesses use the flexibility inherent in accounting to manage their results. In itself, flexibility is good because it allows companies to choose accounting policies that present a ‘true and fair view’. However, by the judicious choice of accounting policies and by exercising judgement, accounts can serve the interests of the prepares […]READ ARTICLE
We are listening many times about cash and money in any business because cash is the base of any business as it is in bank or in hand. so a successful business should keep its cash transactions very clear in a cash book for decision times to get more profits.
What is Cash Book
All accounting transactions should keep in a suitable place in book therefore all money transactions will keep in cash book. so any cash payment and cash receipt will record in cash book. Cash book is a separate accounting book that includes columns as: Date, Accounts, Description, Debit, and credit.
Cash Book Format
Typically, we can find two format for a cash book 1- Official format 2-Shop format.
In official format there are columns Date, Description, Debit and Credit but in shop format there are columns: Date, Description, Income and Expense.
Debit and Credit are used in accounting concepts and professional format but these terms are hard to understand for normal user so in shop format term Income will used for Debit and Expense Will used for Credit.
Types of Cash Book
- Two Column Cash Book
- This type, has two columns as Debit (Income) and Credit(Expense) for Only Cash account so it mentions to All money in hand and bank
- Triple Column Cash Book
- This type, has three columns as Debit, Credit, and a column for cash type ( cash in hand or cash in bank). Benefit of this type of cash book is to recognize where is cash? in hand or in bank and we can have more clear reports and statement of cash flow
Petty Cash Book
Petty cash is one of big volume account in any business because of much quantity of charge payments for daily charges of offices or..
However, in the most company, petty cash transactions keep in separate book as name petty cash book.
How to Use Cash Book
As you know, cash transactions are too much and everyday too many voucher will be recorded. so it is recommended to enter cash payments and cash receipt at the end of day and before leaving the job. Don't leave them to do in the next day because you will get more delay vouchers day by day so that will grow to huge quantity of vouchers and it will make more mistakes in big time working.
To read more about Cash Book Entry
Companies can encounter situations where they have temporary un-utilized capacity and are faced with the opportunity of bidding for a one-time special order in competition with other suppliers. In this situation only the incremental costs of undertaking the order should be taken into account. It is likely that most of the resources required to fill the order will have […]READ ARTICLE
Instead of using the cost-plus pricing approach described in above example (Case A) whereby cost is used as the starting point to determine the selling price, target costing is the reverse of this process. With target costing the starting point is the determination of the target selling price. Next a standard or desired profit margin is deducted to […]READ ARTICLE
Customized products or services relate to situations where products or services tend to be unique so that no comparable market prices exist for them. Since sales revenues must cover costs for a firm to make a profit, many companies use product costs as an input to establish selling prices. Product costs are calculated and a desired prof it […]READ ARTICLE
Pricing decision for customized products or services is easy, it is a single customer with the pricing decision being based on direct negotiations with the customer for a known quantity, But for non-customized products, it needs full detailed plan of pricing decision, for example pricing of a shoe in show factory, is a non-customized product.
Customized Products: Sales of a single quantity (Or low quantity) to A single customer
Non-Customized Products: Sales of a thousands quantity (Or high quantity) to A unknown quantity of customers
A market leader must make a pricing decision, normally for large and unknown volumes, of a single product that is sold to thousands of different customers. To apply cost-plus pricing in this situation an estimate is required of sales volume to determine a unit cost, which will determine the cost-plus selling price.
This circular process occurs because we are now faced with two unknowns that have a cause-and-effect relationship, namely selling price and sales volume. in this situation it is recommended that cost-plus selling prices are estimated for a range of potential sales volumes. Consider the information presented in Example as below ( case ): (Please click on photo to zoom)
You will see that the Auckland Company has produced estimates of total costs for a range of activity levels instead of adding a percentage profit margin the Auckland Company has added a fixed lump sum target profit contribution of t2 million. The information presented indicates to management the sales volumes, and their accompanying selling prices, that are required to generate the required profit contribution.
The unit cost calculation indicates the break-even selling price at each sales volume that is required to cover the cost of the resources committed at that particular volume.
Management must assess the likelihood of selling the specified volumes at the designated prices and choose the price that they consider has the highest probability of generating at least the specified sales volume. if none of the sales volumes are likely to be achieved at the designated selling prices management must consider how demand can be stimulated and or costs reduced to make the product viable. if neither of these, or other strategies, are successful the product should not be launched. The final decision must be based on management judgement and knowledge of the market The situation presented in Example 5.1 represents the most extreme example of the lack of market data for making a pricing decision. if we reconsider the pricing decision faced by the company it is likely that similar products are already marketed and information may be available relating to their market shares and sales volumes Assuming
that Auckland's product is differentiated from other similar products, a relative comparison should be possible of its strengths and weaknesses and whether customers would be prepared to pay a price in excess of the prices of similar products. it is therefore possible that Auckland may be able to undertake market research to obtain rough approximations of demand levels at a range of potential selling prices. Let us assume that Auckland adopts this approach, and apart from this, the facts are the same as those given in above Example (Case A).
Now look at Case B in above example, The demand estimates are given for a range of selling prices. in addition the projected costs, sales revenues and profit contribution are shown. You can see that profits are maximized at a selling price of £80. The information also shows the effect of pursuing other pricing policies. For example, a lower selling price of 170 might be selected to discourage competition and ensure that a larger share of the market is obtained in the future.
Instead of using the cost-plus pricing approach described in above example (Case A) whereby cost is used as the starting point to determine the selling price, target costing is the reverse of this process. With target costing the starting point is the determination of the target selling price. Next a standard or desired profit margin is deducted to get a target cost for the product. The aim is to ensure that the future cost will not be higher than the target cost.
The stages involved in target costing can be summarized as follows:
Stage 1: determine the target price that customers will be prepared to pay for the product
Stage 2: deduct a target profit margin from the target price to determine the target cost
Stage 3: estimate the actual cost of the product;
Stage 4: if estimated actual cost exceeds the target cost investigate ways of driving down the actual cost to the target cost.
The first stage requires market research to determine the customers' perceived value of the product, its differentiation value relative to competing products and the price of competing products, The target prof it margin depends on the planned return on investment for the organization as a whole and profit as a percentage of sales. This is then decomposed into a target profit for each product that is then deducted from the target price to give the target cost. The target cost is compared with the predicted actual cost. if the predicted actual cost is above the target cost intensive efforts are made to close the gap.
Product designers focus on modifying the design of the product so that it becomes cheaper to produce. Manufacturing engineers also concentrate on methods of improving production processes and efficiency.
The aim is to drive the predicted actual cost down to the target cost but if the target cost cannot be achieved at the pre-production stage the product may still be launched if management are confident that the process of continuous improvement will enable the target cost to be achieved early in the product's life if this is not possible the product will
not be launched. The major attraction of target costing is that marketing factors and customer research provide the basis for determining selling price whereas cost tends to be the dominant factor with cost-plus pricing A further attraction is that the approach requires the collaboration of product designers, production engineers, marketing and finance staff whose focus is on managing costs at the product design stage. At this stage costs can be most effectively managed because a decision committing the firm to incur costs will not have been made. Target costing is most suited for setting prices for non-customized and high sales volume products, lt is also an important mechanism for managing the cost of future products.
The two principal systems for determining the inventory quantities on hand are the periodic system and the perpetual system. Both systems may be used simultaneously by companies with different classes of inventory.
The Periodic System
This system requires a physical count of goods on hand at the end of the period. A cost basis (i.e., FIFO, LIFO, etc.) is then applied to derive an inventory value. This system is widely used because it is simple and requires records and computations primarily only at the end of the period. It is not as useful as the perpetual system, however, in the planning and control of inventories.
The Perpetual System
This system calls for a continuous record of receipt and disbursement for every item of inventory. Physical counts of the quantities on hand are usually made at least once a year and reconciled to the perpetual records. Most large manufacturing and merchandising companies use the perpetual system to provide continuous control over the quantities and the investment in inventory.
Adequate supplies are assured for production or sale and costly machine shut-downs and customer complaints are minimized.
Inventory cost includes all expenditures relating to inventory acquisition, preparation and readiness for sale. Any purchase discounts are treated as reductions in the cost of inventory. Accounting for inventory costs for goods in process and finished
goods can be best accomplished by means of a good cost accounting system, a topic which will be treated in depth in later volumes of this series. In a manufacturing company, the two primary methods for accumulating costs are (1) by job order and (2) by process or operation.
Job Order Cost System
This system is generally used by companies which manufacture a number of different products in limited quantities. The costs for each job are accumulated separately on a job order cost record and are included in goods in process until the job is completed. The completed job and its associated costs are considered finished goods until the job is sold. Examples of companies using job order cost systems are printing shops and construction companies.
Process Cost System
This system is used where large amounts of similar units are produced on an assembly-line basis. The controlling factor is the cost center or department. Costs of raw material, direct labor, and manufacturing overhead are accumulated by cost center rather than by individual job. The unit cost is obtained by dividing total costs by the quantity produced for the week, month, etc. Examples of companies using process cost systems are steel mills, paper companies, and other
Heart of any accounting system is Chart of accounts and sometimes it will be summarized to term: "C.O.A" , whatever it is on paper or a computerized system. any voucher should show debit amount and credit amount on mentioned accounts. Actually, Accounts are like humans in a society of financial area. each accounts has its unique identity and behaviors. As your accounts are more clear and sorted then your income statement will be more useful.
At a glance C.O.A is list of all accounts but categorized in standard format to be understandable for any accountant. they are categorized in groups and each group has sub groups as term: "Subsidiary".
General Groups in Chart of Accounts
Typically 6 main groups will be find in coa as:
Some accountants as they need then they will add more groups and it is vary from company to company and accountant to accountant.
This group covers any things that shows a ownership of company at current time or will be occurs in future time like money will be received from trade debtors. subsidiaries in this groups are : Cash, Bank Accounts, Accounts Receivable, Paid loans to employees, ...
This groups will increase volume of capital
Any money should be pay to anybody or company out of company will be categorized in this group. for example, accounts payable (Trade creditors), bank loans, ...
This groups will decrease volume of capital
When you are doing journal entry, in double entry you should take care of accounting equation for any voucher. equity between assets and liabilities is so important that quantity of digits are important.
How can we use this Equity in Real Works
For first of all, let us have a look at real business in our daily life. When we buy an accessories for our office we will pay for it so we have a new asset but we don't have any liability. now when we buy an accessories and vendor will accept to receive its money later on our credit basis account then we will create a liability.
However on credit basis system, we will record a liability equal to any assets that we receive from outside of company
How can we use this Equity in Real Works
Please have a look at this photo for example:
Trade receivable are generally recognized at the time goods are sold and title passes, or when the service provided is actually performed. The valuation placed on the receivables depends on the amount due, the time of collection, and the probability of collection. Determining the amount due: The amount actually paid by the customer often includes a variety of charges […]READ ARTICLE
For accounting purposes, the term notes receivable refers to promissory notes, bills of exchange or trade acceptances. Notes receivable are distinguished by the fact that they are written contractual arrangements for the payment of a specific amount of money, generally plus interest, at a stated time. They are usually negotiable or transferable instruments which enable the holder to use them for cash generation in much the same way as is done with accounts receivable.
( A note is generally recorded at its face value.)
However, when no interest rate is specified, the face amount of a note is assumed to include some provision for interest. Such non-bearing notes are recorded at face value less an interest charge based on a percentage that is assumed to be reasonable.
The Discount on Notes Receivable is taken into income over the life of the note.
Discounting Notes Receivable
Notes receivable may be sold or discounted. When a note is sold to a bank or finance company without recourse, the seller assumes no future liability should the maker of the note default. Discounting, on the other hand, is usually done on a recourse basis (i.e., money is borrowed using the note as collateral and the borrower, who endorses the note, becomes contingently liable should the maker default).
The proceeds or cash received when a note is discounted may be computed in one of two ways:
- The interest or discount charged by the lender is deducted from the face value of the note
- The discount rate may be applied to the maturity value of the note.
The First question is: "what is Cash". before to answer it, we should have a define of word "Cash". Cash in public area as shops and stores will be mentioned to money but in finance cash term covers any capital in hand, cashier and bank account that you could have to spend same day of request. Cash is king. It is the essential part of business so cash book is a strong matter in financial reports and without it, a business cannot pay its employees' wages or pay for goods or services. Cash book entry is recording cash in the bank account from the bank. Small businesses may sometimes prepare a cash flow statement directly for auditing. More usually, however, the cash flow statement is by deducing the figures from the profit and loss account and balance sheet.
Cash flow Statement
At its simplest, records the cash inflows and cash outflows classified under certain headings such as cash flows from operating(i.e., trading) activities. All companies(except small ones) must prepare cash elements in line with financial reporting regulations.
Importance of Cash Book
However some sole traders, partnerships and smaller companies also provide them, often at the request of their bank. As Real-Life shows, banks aware of the importance of cash As well as preparing cash flow statements on the basis of past cash flows, businesses will continually monitor their day-to-day cash inflows and outflows. at the end of financial period, for information of shareholders, capital of company will be reported in a cash book, so it is very important to have clear copy of it every time!.
Managers also prepare cash budgets which look to the future. These are generally used within the business and are not pub- listed externally. Cash management, therefore, concerns the past, present and future activities of a business.
Next Page >> How to Cash Transactions Entry
For proper budgeting and cost control it is necessary to make a distinction between fixed and variable total costs. Most costs fit easily into one category or the other; however, various items of factory overhead can be classified as semi variable costs and must be carefully examined to determine their relationship to changes in the volume of production. Fixed […]READ ARTICLE
The broad definition of cost accounting and nature of cost is the process of identifying, summarizing, and interpreting information needed for: Planning and Control Management Decisions Product Costing Note that product costing is number 3, since in most companies, the more important activities relate to planning and control and special decisions rather than to the more mechanical aspects […]READ ARTICLE
Cost Systems The cost classifications do not provide all required cost data. Most cost planning and control data can only be provided by an adequate cost system, designed so that individual supervisors, department heads, and executives can be held accountable for all costs which are their responsibility. The concepts of authority and responsibility are closely related to accountability […]READ ARTICLE