E Learnings

  A static budget is  a budget that uses predicted amounts for a given period prior to the period beginning . The unique aspect of a static budget is that it does not change regardless of deviations in revenue and expenses.

 VAT is a tax that is levied on services and goods and is paid to the government by producers although the actual tax is levied from the end-user or consumers who purchase the services and goods. This is important for GDP.

 An indirect tax (such as sales tax, per unit tax, value added tax (VAT), or goods and services tax (GST), excise, consumption tax, tariff) is a tax that is levied upon goods and services before they reach the customer who ultimately pays the indirect tax as a part of market price of the good or service purchased. Alternatively, if the entity who pays taxes to the tax collecting authority does not suffer a corresponding reduction in income, i.e., impact and tax incidence are not on the same entity meaning that tax can be shifted or passed on, then the tax is indirect.

 Goods and Services Tax (GST) is an indirect tax (or consumption tax) used in India on the supply of goods and services. It is a comprehensive, multistage, destination-based tax: comprehensive because it has subsumed almost all the indirect taxes except a few state taxes. Multi-staged as it is, the GST is imposed at every step in the production process, but is meant to be refunded to all parties in the various stages of production other than the final consumer and as a destination-based tax, it is collected from point of consumption and not point of origin like previous taxes.

  A sales discount is  a reduced price offered by a business on a product or service . Learn how to include discounts on invoices. A sales discount, also commonly known as just a 'discount' provides customers of a business with a reduced rate on one or more of the products or services being offered.

  A cost reconciliation statement is  a statement reconciling the profits or losses shown by cost accounts and financial accounts . It is a statement wherein the causes responsible for the difference in net profit or loss between cost and financial accounts are established and suitable adjustments are made to remove them.

  To calculate cost per equivalent unit by  taking the total costs (both beginning work in process and costs added this period) and divide by the total equivalent units . In this example, beginning work in process is zero.

  Marginal revenue is  the increase in revenue that results from the sale of one additional unit of output . While marginal revenue can remain constant over a certain level of output, it follows from the law of diminishing returns and will eventually slow down as the output level increases.

  An activity variance is  the difference .  between a revenue or cost item in the flexible budget and the same item in the static planning budget . An activity variance is due solely to the difference in the actual level of activity used in the flexible budget and the level of activity assumed in the planning budget.

  Revenue and spending variances (sometimes called flexible budget variances) are  the differences between the flexible budget and the actual results  and are caused by differences in the revenue per unit, cost per unit and/or the amount of cost incurred.

 Amortization is an accounting technique used to periodically lower the book value of a loan or an intangible asset over a set period of time. Concerning a loan, amortization focuses on spreading out loan payments over time. When applied to an asset, amortization is similar to depreciation.

  The effective interest rate (EIR) is the rate that provides a level yield on a financial instrument to its maturity date or next market-based repricing date equal to the rate that exactly discounts the cash flows to its carrying amount , from its initial recognition to its maturity .

 

 

 The statement of shareholders' equity is a financial document a company issues as part of its balance sheet. It highlights the changes in value to stockholders' or shareholders' equity, or ownership interest in a company, from the beginning of a given accounting period to the end of that period.

Taxable income is the base income upon which tax is levied. It includes some or all items of income and is reduced by expenses and other deductions.

 A deferred tax liability is a listing on a company's balance sheet that records taxes that are owed but are not due to be paid until a future date. The liability is deferred due to a difference in timing between when the tax was accrued and when it is due to be paid.

 A deferred tax asset is an item on a company's balance sheet that reduces its taxable income in the future. Such a line item asset can be found when a business overpays its taxes. This money will eventually be returned to the business in the form of tax relief.

  A double-declining balance method is  a form of an accelerated depreciation method in which the asset value is depreciated at twice the rate it is done in the straight-line method . Since the depreciation is done at a faster rate (twice, to be precise) than the straight-line method, it is called accelerated depreciation.

  Suppose you take out a $108,000, 20-year mortgage loan to buy a condo. The interest rate on the loan is 5%. To keep things simple, we will assume you make payments on the loan annually at the end of each year. a. What is your annual payment on the loan? b. Construct a mortgage amortization. c. What fraction of your initial loan payment is interest? d. What fraction of your initial loan payment is amortization? e. What is the total of the loan amount paid off after 10 years (halfway through the life of the loan)? f. If the inflation rate is 3%, what is the real value of the first (year-end) payment? g. If the inflation rate is 3%, what is the real value of the last (year-end) payment? h. Now assume the inflation rate is 6% and the real interest rate on the loan is unchanged. What must be the new nominal interest rate? i-1. Recompute the amortization table. i-2. What is the real value of the first (year-end) payment in this high-inflation scenario? j. What is the real value of the ...

 The budgeted income statement contains all of the line items found in a normal income statement, except that it is a projection of what the income statement will look like during future budget periods.

  A  journal entry  is used to record a business transaction in the accounting records of a business. A Journal is a book in which all the transactions of a business are recorded for the first time.

LexCorp, an accrual basis corporation, has taxable income of $150,000 in the current year. Included in its determination of taxable income are the following transactions. ∙ It incurred a $65,000 capital loss from the sale of stock. It had no capital gains. It received $30,000 in dividends from Metallo, Inc. It owns 65%. ∙ It paid Federal income tax of $40,000. ∙ It incurred $18,000 in meal and entertainment expenses. ∙ LexCorp uses the LIFO method when accounting for inventory. This year, the company’s LIFO recapture amount increased by $4,000. ∙ It paid $5,000 in key man insurance premiums; cash surrender value increased by $1,500 . ​ What is LexCorp's’s current E & P for the year?