The error of omission refers to the error in which a transaction is not at all recorded in the books, either completely or partially. As against, the error of commission implies the error in which the transaction is incorrectly recorded in the books. While recording and posting the entries, the occurrence of errors is quite common. Errors are the mistakes committed by the accounts staff while recording and maintaining the books, which cannot be corrected by overwriting. Errors are divided … [Read more...]

We all encounter words like economics and the economy, in our day to day life. But there are only a few people who can actually define and differentiate these two. Basically, economics is the study of an economy, i.e. its structure, condition, working, performance, issues, remedies, etc. It includes the analysis of the different types of the economic system, economic decisions and its implementation by various economic units, such as individual, family, institutions, government, etc. On the … [Read more...]

Auditing is a great way of assessing the effectiveness of an organization's internal control system and compliance with statutory laws and rules applicable to the enterprise. Financial Audit is not a new term for business class and all the other people relating to it, as it is the legal requirement of the companies, government organizations and institutions. All the companies, whether profit-making or not, have to get their accounts audited every year by an auditor. Financial Audit is often … [Read more...]

Startup financing refers to the primary introduction of funds, through various sources of finance, to convert the idea into the product or service, by commencing the business. Angel Investor and Venture Capital are the two major alternatives to startup financing. Angel Investors are wealthy individuals who facilitate young entrepreneurs and startups with financial backing in the early stages. On the contrary, Venture capitalist is a firm, comprising of a team of financial experts or a … [Read more...]

An accountant needs to ascertain the cost of the cost object (i.e. product, service or activity) either by cost centre, cost unit or by both. Cost Center is nothing but just one portion of the entire organization, to which cost is charged. On the other hand, Cost unit refers to the unit in which cost is expressed. The choice of an appropriate cost centre or cost unit, for which cost is assessed is based on various factors like the organization of factory, size and structure of the concern, … [Read more...]

Cost refers to the actual or estimated amount of expenses incurred or to be incurred on a particular article, or activity. The concepts of costing and cost accounting are related to cost accountancy, which is commonly juxtaposed by the students. Costing is concerned with the method of assessing the cost of goods produced and services rendered, at different stages of the production process. On the contrary, cost accounting is associated with the recording of income and expenses, determination … [Read more...]

Tax refers to a mandatory contribution of a person towards the country's revenue, which is imposed by the government (central or state) on the income or wealth of the persons or included in the cost of goods, services or transactions. Every assessee wants the tax liability to be minimum and for this, he/she can take recourse to tax planning through which tax burden can be reduced to a minimum, by using legitimate ways and means. Tax planning is often misconstrued with tax management, which … [Read more...]

Fundamental Analysis studies all those factors which have an impact on the stock price of the company in future, such as financial statement, management process, industry, etc. It analyzes the intrinsic value of the firm to identify whether the stock is under-priced or over-priced. On the other hand, technical analysis uses past charts, patterns and trends to forecast the price movements of the entity in the coming time. Stock prices change every minute, and so every investor is keen to know … [Read more...]

Most of the people have no idea about the income on which tax is levied and due to which they face trouble in ascertaining their taxable income and filing their return. As per the Income Tax Act, a person can earn income from different sources and these sources, are categorised as heads of incomes. In the context of income tax, the terms gross total income and total income are often used, wherein gross total income is the aggregate of income calculated under the five heads. On the other hand, … [Read more...]

According to the Income Tax Act, income earned by a person in a financial year is taxable in the following financial year. So, the financial year in which the person has received income is called as the Previous Year. On the other hand, the financial year in which the tax liability on the income of the person is assessed is known as Assessment Year. We all know that the Calendar Year commences on the 1st of January and ends on 31st of December every year. But, the calendar year has no … [Read more...]