Indirect cost as the name suggests costs those are not directly linked to any product, project, facility etc. are called indirect costs. Examples are administration costs, operations costs, product cost etc. Indirect cost is of two types: fixed cost and variable cost.
Technology…Technology became an un-separable part of our life. It makes the way of doing things easy, effective and fulfilled our basic needs. We became obsessed with some specific technology like internet, cloud tech, television etc. When & how it became so important to us that we can’t live without these?
Marginal revenue can be defined as the extra revenue earned by selling one extra unit of product. It’s beneficial for a company as the profit margin increases with same marginal cost. It would be profitable, as long as the rate of marginal revenue remains higher.
The line of credit is a kind of loan agreement between a bank or any financial institution and a customer. A customer can be an individual person, a business entity, non-financial institute, Government etc.
The total amount of interest earned or paid in a year on any financial products, loans etc. is called as the effective annual interest rate. The effective annual interest rate is also known as an effective interest rate.
So, how to calculate effective interest rate? Here is the formula: r = (1+i/n) n -1
r= effective interest rate n = no. of periods i= annual interest rate
Effective annual interest rate calculates while considering compound rates instead of static interest rates.
Cash receipts journal is a special type of ledger which records details of only cash receipts. This ledger reflects in the journal under the category “Cash Sales”. Debit and credit both columns need to be recorded simultaneously. In debit side cash should be debited and in credit side sales need to be entered.
Break-even point is a point where a company faces a win-win situation; Means Company’s all debts are paid and gain no income. There is loss or profit at this point. Break-even point is a term used in financial analysis. A company can have a lower or higher break-even point.
Yesterday on 18th January 2018 25th GST council meet held at Vigyan Bhavan chaired by finance minister Arun Jaitley. This meeting conducted to discuss some major issues of GST. Here are the outcomes of this meeting:
Accounting rate of return also called as Average rate return. Accounting rate return calculates the amount of profit company/entity incurred from the money invested. Accounting rate of return never considers the time value of money.
The formula to calculate accounting rate of return is: Average return during period / Average investment
Average Investment = Book value at the beginning of 1st year + Book value at the end of useful life /2
Average return during period = Profit after tax/ Life of investment
Asset turnover ratio generally used to evaluate company’s performance in a financial year. Asset turnover ratio shows or indicates a company’s efficiency to generate revenues in the form of sales by using available assets.