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Financial accounting is mainly focused on the external users of the financial information. Its main purpose is to communicate the financial position of the company. Preparing the financial statements is m...

It improves business processes, it allocates indirect costs based on a product’s cost driver, or the factor that creates the cost. As costs are allocated per product, a picture starts to emerge of which b...

Depreciation is a periodic year end accounting adjustment (not an actual cash change), which represents the physical wearing out of Non-Current Assets (NCAs) such as vehicles and buil...

Ratio analysis is a numerical technique of re-expressing financial statements. It aids decision making by summarising and interpreting financial statements more easily. There are different sets of ratios,...

The reducing balance method takes off a percentage of the value of a Non Current Asset each year. For example a an asset that is valued at £50,000 and depreciated at a rate of 10% per year will be depreci...