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What is Backorder Cost

What is Backorder Cost

Backorder Cost is a Cost which is incurred by a business when it is unable to fill an order and must complete it later. It is a real and perceived cost of the inability to fulfill an order. The costs can include negative customer relations, interest expenses, etc. Backorder costs are usually computed and displayed on a per-unit basis. Sometimes it is also […]

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What is Escalation & De-Escalation Clause?

What is Escalation & De-Escalation Clause?

An Escalation clause (also known as Escalator Clause) is a clause in a contract that guarantees a change in the agreement price once a particular factor beyond control of either party affecting the value has been determined. Because of increasing prices, it has become common to insert an escalation clause in the contracts. If the prices of material, plant, labor & equipments […]

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What is Sunk Cost

What is Sunk Cost

Sunk Cost is also known as ‘Past or Retrospective, embedded cost, prior year cost, or sunk capital’. Sunk costs are costs which cannot be recovered once they have been incurred. Since they are costs that can’t be regained so they shouldn’t be taken into account any longer in rational decisions. This can be explained with the help of the following examples:- For example: If […]

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Paper Money or Tissue Paper

Paper Money or Tissue Paper

 This article on Paper Money or Tissue Paper has been compiled by CA Prashant Singh.  ———————————————————————————————————————————————————- What if the currency you hold is just a colored paper with numbers? Does magical words of Jerry Maguire excites you? SHOW ME THE MOOOONEY!! SHOW ME THE MOOOONEY!! What the F* is this M word? For an economist it is an accepted form […]

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Cash Flow Statement – Direct & Indirect Method

Cash Flow Statement – Direct & Indirect Method

Cash Flow Statement also known as Statement of Cash Flows is a statement which shows the Changes in the Cash Position of an organisation between 2 periods. Along with showing the changes in the Cash Position of an organisation, it also depicts the reasons for such change during the period. The main reason for the preparation of the Cash Flow […]

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Funds Flow Statement: Meaning & How to Prepare

Funds Flow Statement: Meaning & How to Prepare

Funds Flow Statement is a statement prepared to analyse the reasons for changes in the Financial Position of a Company between 2 Balance Sheets. It shows the inflow and outflow of funds i.e. Sources and Applications of funds for a particular period. In other words, a Funds Flow Statement is prepared to explain the changes in the Working Capital Position […]

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SOX – Sarbanes Oxley Act

SOX – Sarbanes Oxley Act

Sarbanes Oxley Act is also known as ‘Public Company Accounting Reform and Investor Protection Act’, ‘Corporate and Auditing Accountability and Responsibility Act’, SOX & SARBOX. The possible questions that strike our mind while studying any law are Why, Who, When, What and How. So let’s look into the affairs of the act and try to find out the answers which […]

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E-Filing Balance Sheets in XBRL Format with MCA

E-Filing Balance Sheets in XBRL Format with MCA

XBRL (Extensible Business Reporting Language) is another advanced reporting language of the XML family. XBRL ensures that the figures reported to government authorities and other organisation does not remain dormant piece of printed papers but these figures can be used in data analysis. ICAI took initiative in 2001 for implementation of XBRL as a first step towards Digital data reporting, […]

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MCA 21 – Services Available and Benefits

MCA 21 – Services Available and Benefits

With the opening of the economy towards globalisation, our corporate world requires world-class governance system. The essence of corporate world lies in promoting compliance of the law in letter and spirit, transparency, accountability and above all, fulfilling the fair expectations of all the stakeholders. The process of economic reform and liberalisation that started in 1991 has entered a crucial phase, […]

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Director Identification Number (DIN No.)

Director Identification Number (DIN No.)

The concept of a Director Identification Number (DIN) was introduced for the first time in India with the insertion of Section 266A to 266G of Companies Amendment Act, 2006. The DIN is a unique identifier for an existing or a future Director containing personal information about him. The need for introducing the unique identifier arose from The need to create […]

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