Daily Archives: November 4, 2019

Meaning of Depreciation

meaning of depreciation

On the basis of the Fundamental Accounting Assumption of Going Concern, assets are classified as Fixed Assets and Current Assets. Fixed assets are used in the business to drive benefits for more than one accounting period. Periodic profit is measured by charging cost against periodic revenue. Since fixed assets are …

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What is Cost Tracing

cost tracing

Cost tracing refers to the assignment of accumulated costs that have a direct relationship to a particular cost object. It is worth noting that cost assignment is a general term for assigning costs, whether direct or indirect, to a cost object.  On the other hand, cost tracing is a specific …

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Coverage Ratios – Meaning and Formulas

The coverage ratio measures the firm’s ability to service (repay) the fixed liabilities. These ratios establish the relationship between fixed claims and what is normally available out of which these claims are to be paid. These fixed claims may consist of interest on loans, dividend on preference shares, amortisation of …

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