Daily Archives: November 8, 2019

Methods of Prepration of Trial Balance

There are three methods of preparation of trial balance: Total method Balance method Total and balance method Now we shall understand each method in detail with logic and illustration as follows: TOTAL METHOD Under this method, every ledger account is totalled and that total amount (both of debit side and …

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Systematic and Unsystematic Risks

The deviation from the anticipated return is caused by is explained by 2 levels of risk: systematic risks and unsystematic risks. The sum of these two main categories of risk is the total risk to which an investor is exposed to. Systematic risk is associated with overall movements in the general …

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Price Yield Relationship – Concept

price-yield-relationship

Price Yield Relationship A basic property of a bond is that its price varies inversely with yield. The reason is simple. As the required yield increases, the present value of the cash flow decreases; hence the price decreases. On the contrary, when the present value of the cash flow decreases, …

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Definition of Overhead

Cost pertaining to a cost centre or cost unit may be divided into two portions direct and indirect. The indirect portion of the total cost constitutes the overhead cost which is the aggregate of indirect material cost, indirect wages and indirect expenses.  CIMA defines indirect cost as expenditure on labour, …

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