Tuesday, July 29, 2014

Free Accounting Essay Example

The classification of costs in CTC’s income statement is on the basis of the business’ operations. This means that the listing of expenditures covers aspects that affect its productivity. The expenses of the firm are on the basis of employees’ wages, costs of production, logistical costs and utility expenses. This classification is internal because it focuses on the company alone. However, there is the need to include other crucial expenditures such as interest expenses and taxes in order to get comprehensive information on the scope of the business.

The calculation of the estimated cost of goods manufactured considers the production expenses. In other words, there will be the factoring in of the wages, cost of purchases and utility costs of production. From the expenditure list, there will be the exception of the expenses that do not directly affect the production of finished goods. This total expense is $677,000 while the estimated cost of goods sold tops up the remaining amount in expenditures. Therefore, from a total expense outlay of $925,000, $248,000 is the Company’s total cost of sales.

                                  Revised Income Statement ($)

Sales                                                   980,000

        Factory wages                             365,000
        Utilities                                        102,000
        Council Rates                                  5,000
        Sales staff                                    110,000
        Advertising                                    18,000
                  Total Expenses                                                600,000
                  Net profit                                                        380,000

There are some changes between the above income statement and the original one. The first change involves a matter of bookkeeping because the cost of goods sold and the depreciation cost are not in the income statement. The cost of goods sold goes into the trading, profit and loss account and is in under the sales bracket. The inclusion of the cost of depreciation is on the balance sheet, where it reduces the value of the assets.

The balanced scorecard approach is an excellent recommendation for making a format that will analyze the company’s costs. It incorporates a variety of metrics that affect the overall progress of the business. These metrics, in turn, influence the business’ operations and have an effect on revenue. Therefore, using this approach to manage costs will split the operations of the organization into consumer metrics, financial metrics, employee evaluation and business performance measures. This precise approach to analyzing the costs within the operations of the organization will allow the business owner to account for cash flow.

There are several factors that influence the cost of a product and position it will take in the market. Thus, basing the costs of the organization’s products on the cost of direct materials and labor is risky. This is because there are other crucial market conditions that can easily cause the sales of the business to decline. Although the direct initial costs need factoring in into the financial future of the organization, an analysis of the progress of the competitors is crucial. It is also imperative to keep in mind that the prevalent market demand should be the additional bases for determining the prices of products.

The company should stop using incomplete records to put down its financial information. Incomplete records are a slow method of recording information and often leave room for errors. In addition, it would be beneficial for the company to adopt the International Accounting Standards to report each financial activity. These recommendations will increase the ability of the business to thrive in the current market conditions.

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Tuesday, July 1, 2014

Essay on Economic Justice

Justice is, in the first place, a basic concept of socio-political, moral and legal issues. As such, it is the concept of due parity. In general terms, it is the parity between the real value of different individuals (social groups) and their social position. In more concrete terms, the parity between their rights and obligations, crime and punishment, between the act and the reward, and remuneration, etc. The discrepancy in these relations is estimated as injustice.

Justice is also a basic concept of the economy. As an economic concept, justice refers to that section of the economy as welfare economics. Here it is understood as a lack of interest or impartiality (fairness). This understanding of justice was named after its author - justice by Rawls. In his book "A Theory of Justice," he argues that justice is a sign of the society, which individuals would choose if they were not influenced by purely personal interests. In this state they are disinterested as if to conclude an agreement on the nature of society and its economic system. "Ignorance" of their interests do not allow them to know the position (determined by ability, gender, race), which they will take in this society. In this case, the company will be chosen from four properties and these properties can be regarded as the property of justice.

The properties of justice as an economic concepts. The first is the equality of rights for the maximum liberty compatible with the freedom of other individuals. The second is inability to ensure economic equality through the first property. Third is the competitive nature of inequality, it may be the result of free competition. The fourth property is a utilitarian justification of inequality, i.e., it can be justified only insofar as it benefits all members of society. The last two properties are focused in a constitutive principle of justice.

Constitutive principle of the modern understanding of justice as an economic concept is "a differential principle." It requires that the inequality guaranteed the greatest possible welfare to the poorest members of society.

The etymology of English words equity and fairness are very “economical." Fairness of Fair means market; Fair exhibition. But the term “equity” has most wide range of economic meanings. Already on the surface analysis, we see that along with the word justice, it means at least five basic financial concepts associated with the share. Among them are the ordinary shares, the share capital of the shareholder in the company, equity, capital, margin (the difference between the market value of the shares and the state of the client's margin account with a broker, i.e., the size of the loan obtained under them). This range of the equity meanings can be explained by the fact that the share is the greatest "democratizer," i.e., an equalizer of the bursts of economic life, for the rights that it presents do not depend on the status of their holder.

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