Management -accounting ppt

4. Classification of Accounts (Contd.) Type Rules for Debit Rules for Credit Personal Accounts Debit the Receiver Credit the Giver Real Accounts Debit what comes in Credit what goes out Nominal Accounts Debit all expenses and losses Credit all incomes and gains

9. Distinction between Capital and Revenue Expenditure Purpose It is incurred for acquisition of fixed assets for use in business It is incurred for running of business Capacity It increases the earning capacity of the business It is incurred for earning profits Period Its benefit is extended to more than one year Its benefit extends to only one accounting year Depiction It is shown in the balance sheet It is part of trading or Profit or Loss account

17. Management Accounting Framework

127. Inventory Cost Methods Date Units Cost per unit Total cost Jan 15 10000 5.10 51000 Mar 20 20000 5.20 104000 May 10 50000 5.00 250000 June 8 30000 5.40 162000 Oct 12 5000 5.30 26500 Dec 21 5000 5.50 27500 Total 120000 621000 Op.inv 10000 5.00 50000 Cl. inv 14000