Benefits-Drawbacks

What Is Debt Financing ? Debt financing is just opposite of equity financing.(in which capital is raised by selling equity instruments to the investors). It is a process of raising fund by selling debt instruments such as bond, credit cards, debentures etc. It is a borrowing of money and should be paid back with ...

What Is Equity Financing ? Equity financing (also called equity funding) is a process of raising capital by selling equity instruments like ordinary shares, preference shares etc. Companies issue share to investors to raise money for business. It is effective tool that helps to meet short-term or long-term obligation...

What Is Cost Audit ?Cost audit is conducted to ensure the correctness of the cost records maintained by the firm. It is a critical examination of costing system which helps to verify the arithmetical accuracy of cost accounts.  It provides correct cost data which helps the management to detect errors and loopholes...

What Is Hire Purchase System ?It is a method of acquiring expensive assets under which buyer get the right to use products without making the whole payment. He/she obtains the asset by making the partial payment and the remaining amount is paid periodically in installments (interest is added in installment amount)....

What Is Partial Audit ? Partial audit refers to the examination of certain suspicious parts of accounting. It does not check the entire books of accounts. It is conducted to clear the doubt of the owner or management. Generally, auditor conducts this audit to ensure the accuracy of cash record, stock level, debtors...

What Is Trade Credit ?Trade credit is a business practice where seller or supplier allows the buyer to purchase goods on credit without making immediate payment. It is a short term agreement (generally 15 to 90 days) and buyer should pay the bill amount before the due date. It is beneficial to new business firms and small...

What Is ABC Analysis Method Of Inventory ? ABC analysis of a technique of categorizing the inventory or materials according to their value and importance. Highly valued items are categorized in  class 'A' , least valued materials in class 'C' and less profitable items than 'A' and more profitable than 'C' fall...

What Is Responsibility Accounting ?Responsibility accounting means identifying different responsibility centers (branch, department, units etc.) in the organization and measuring their inputs and output in order to understand their performance. It is an internal accounting system that compares actual performance of...

Benefits Or Advantages Of LeasingThe main advantages of leasing can be described as follows:1. It Promotes Entrepreneurship While commencing a business it requires huge capital to purchase fixed assets such as land, building, machinery, plant etc. Leasing resolves this requirement by providing the right to use asset...

Merits Or Advantages Of Process Costing The main advantages of process costing can be highlighted as follows: 1. Simple Method Of Costing Process costing is very simple method of computing costs of each stage or process of production. Because of homogeneous products, average cost of product can be calculated easily...

Merits Or Advantages Of Test Check The main advantages of test check can be highlighted as follows: 1. Reduce Work Load It is a checking of partial records from books of accounts. It examines only certain financial transactions because it is difficult to check all financial transactions included in the books of accounts....