A receipt is a written acknowledgment that a person has received money or property in payment following a sale or other transfer of goods or provision of a service. Similarly, amounts may be deducted from amounts payable, as in the case of wage withholding taxes. On the other hand, tips or other gratuities given by a customer, for example in a restaurant, in some countries, it is obligatory for a business to provide a receipt to a customer confirming the details of a transaction. In most cases the recipient of money provides the receipt, but in cases the receipt is generated by the payer. A receipt is not the same as an invoice, there is usually no set form for a receipt, such as a requirement that it be machine generated. Many point-of-sale terminals or cash registers can automatically produce receipts, receipts may be generated by accounting systems, be manually produced or generated electronically, for example if there is not a face-to-face transaction. To reduce the cost of postage and processing, many businesses do not mail receipts to customers, unless specifically requested or required by law, others, to reduce time and paper, may endorse an invoice, account or statement as Paid.
The practice of presenting an invoice is most common in restaurants where a bill is presented after a meal, the salesperson would indicate to the customer the total amount payable, and the customer would indicate the proposed method of payment of the amount. Payment in cash or by payment is regarded as payment of the amount tendered, after processing the payment, the salesperson would generate in the one document an invoice and receipt. If payment was made by a payment card, a payment record would be generated. The invoice and receipt are the record of the transaction. A copy of these documents would normally be handed to the customer, the document may include messages from the retailer, warranty or return details, special offers, advertisements or coupons, but these are merely promotional and not part of the formal receipt. Receipts may be provided for operations such as banking transactions. If linked to a customer account, some retailers point-of-sale systems allow the salesperson to see a complete record of the customers buying history.
It can be required when company representatives buy goods, because tax deduction rules might require hand signed receipts, organizing receipts and similar financial documents is a multimillion-dollar industry in the United States. Consumers can use desktop and online software to organize electronic receipts, the growing trend of digital receipts has led to the launch of new businesses focused on digital receipt management. Cash register Depositary receipt Document automation in supply chain management & logistics Invoice List of finance topics Point of sales Proof of purchase Return receipt Electronic receipt
VATs raise about a fifth of total tax revenues both worldwide and among the members of the Organisation for Economic Co-operation and Development. As of 2014,160 of the worlds approximately 193 countries employ a VAT, there are two main methods of calculating VAT, the credit-invoice or invoice-based method and the subtraction or accounts-based method. The credit-invoice method is the most widely employed method, used by all national VATs except for Japan. The subtraction method VAT is currently used by Japan, although subtraction method VATs. With both methods, there are exceptions in the method for certain goods and transactions, created for either pragmatic collection reasons or to counter tax fraud. Initially directed at businesses, it was extended over time to include all business sectors. In France, it is the most important source of state finance, in this way, the total tax levied at each stage in the economic chain of supply is a constant fraction of the value added by a business. The standard way to implement a value-added tax involves assuming a business owes some fraction on the price of the product minus all taxes paid on the good.
By the method of collection, VAT can be accounts-based or invoice-based, under the invoice method of collection, each seller charges VAT rate on his output and passes the buyer a special invoice that indicates the amount of tax charged. Buyers who are subject to VAT on their own sales, consider the tax on the purchase invoices as input tax, the difference between output tax and input tax is paid to the government. Under the accounts based method, no such specific invoices are used, the tax is calculated on the value added, measured as a difference between revenues and allowable purchases. Most countries today use the method, the only exception being Japan. By the timing of collection, VAT can be either accrual or cash based, cash basis accounting is a very simple form of accounting. When a payment is received for the sale of goods or services, a deposit is made, cheques are written when funds are available to pay bills, and the expense is recorded as of the cheque date—regardless of when the expense had been incurred.
The primary focus is on the amount of cash in the bank, little effort is made to match revenues to the time period in which they are earned, or to match expenses to the time period in which they are incurred. Accrual basis accounting matches revenues to the period in which they are earned. While it is more complex than cash basis accounting, it provides more information about your business. The accrual basis allows you to track receivables and payables, the accrual basis allows you to match revenues to the expenses incurred in earning them, giving you more meaningful financial reports
Financial statements is a formal record of the financial activities and position of a business, person, or other entity. Relevant financial information is presented in a manner and in a form easy to understand. A profit and loss statement provides information on the operation of the enterprise and these include sales and the various expenses incurred during the stated period. A Statement of changes in equity, known as equity statement or statement of retained earnings, a cash flow statement reports on a companys cash flow activities, particularly its operating and financing activities. For large corporations, these statements may be complex and may include a set of footnotes to the financial statements and management discussion. The notes typically describe each item on the sheet, income statement. Notes to financial statements are considered a part of the financial statements. Financial statements should be understandable, relevant and comparable, reported assets, equity and expenses are directly related to an organizations financial position.
Financial statements may be used by users for different purposes and managers require financial statements to make important business decisions that affect its continued operations, Financial analysis is performed on these statements to provide management with a more detailed understanding of the figures. These statements are used as part of managements annual report to the stockholders. Prospective investors make use of statements to assess the viability of investing in a business. Financial analyses are used by investors and are prepared by professionals. Financial institutions use them to decide whether to grant a company with fresh working capital or extend debt securities to finance expansion, the rules for the recording and presentation of government financial statements may be different from those required for business and even for non-profit organizations. They may use either of two accounting methods, accrual accounting, or cost accounting, or a combination of the two, a complete set of chart of accounts is used that is substantially different from the chart of a profit-oriented business.
Personal financial statements may be required from persons applying for a loan or financial aid. Typically, a financial statement consists of a single form for reporting personally held assets and liabilities, or personal sources of income and expenses. The form to be filled out is determined by the organization supplying the loan or aid, although laws differ from country to country, an audit of the financial statements of a public company is usually required for investment and tax purposes. These are usually performed by independent accountants or auditing firms, results of the audit are summarized in an audit report that either provide an unqualified opinion on the financial statements or qualifications as to its fairness and accuracy
Accounting or accountancy is the measurement and communication of financial information about economic entities such as businesses and corporations. The modern field was established by the Italian mathematician Luca Pacioli in 1494, practitioners of accounting are known as accountants. The terms accounting and financial reporting are often used as synonyms, Accounting can be divided into several fields including financial accounting, management accounting, external auditing, and tax accounting. Accounting information systems are designed to support accounting functions and related activities, Accounting is facilitated by accounting organizations such as standard-setters, accounting firms and professional bodies. Financial statements are audited by accounting firms, and are prepared in accordance with generally accepted accounting principles. GAAP is set by various standard-setting organizations such as the Financial Accounting Standards Board in the United States, as of 2012, all major economies have plans to converge towards or adopt the International Financial Reporting Standards.
The history of accounting is thousands of old and can be traced to ancient civilizations. By the time of the Emperor Augustus, the Roman government had access to detailed financial information, double-entry bookkeeping developed in medieval Europe, and accounting split into financial accounting and management accounting with the development of joint-stock companies. The first work on a double-entry bookkeeping system was published in Italy, both the words accounting and accountancy were in use in Great Britain by the mid-1800s, and are derived from the words accompting and accountantship used in the 18th century. In Middle English the verb to account had the form accounten, which was derived from the Old French word aconter, which is in turn related to the Vulgar Latin word computare, meaning to reckon. The base of computare is putare, which meant to prune, to purify, to correct an account, hence, to count or calculate. The word accountant is derived from the French word compter, which is derived from the Italian.
Accountancy refers to the occupation or profession of an accountant, particularly in British English, Accounting has several subfields or subject areas, including financial accounting, management accounting, auditing and accounting information systems. Financial accounting focuses on the reporting of a financial information to external users of the information, such as investors. It calculates and records business transactions and prepares financial statements for the users in accordance with generally accepted accounting principles. GAAP, in turn, arises from the agreement between accounting theory and practice, and change over time to meet the needs of decision-makers. This branch of accounting is studied as part of the exams for qualifying as an actuary. It is interesting to note that two professionals and actuaries, have created a culture of being archrivals
An income statement or profit and loss account is one of the financial statements of a company and shows the company’s revenues and expenses during a particular period. It indicates how the revenues are transformed into the net income and it displays the revenues recognized for a specific period, and the cost and expenses charged against these revenues, including write-offs and taxes. The purpose of the statement is to show managers and investors whether the company made or lost money during the period being reported. One important thing to remember about a statement is that it represents a period of time like the cash flow statement. This contrasts with the sheet, which represents a single moment in time. Charitable organizations that are required to publish financial statements do not produce an income statement, they produce a similar statement that reflects funding sources compared against program expenses, administrative costs, and other operating commitments. This statement is referred to as the statement of activities.
Revenues and expenses are further categorized in the statement of activities by the restrictions on the funds received and expended. The income statement can be prepared in one of two methods, the Single Step income statement takes the simpler approach, totaling revenues and subtracting expenses to find the bottom line. The more complex Multi-Step income statement takes several steps to find the bottom line and it calculates operating expenses and, when deducted from the gross profit, yields income from operations. Adding to income from operations is the difference of other revenues, when combined with income from operations, this yields income before taxes. The final step is to deduct taxes, which produces the net income for the period measured. However, information of a statement has several limitations, Items that might be relevant. Some numbers depend on accounting methods used, some numbers depend on judgments and estimates. S. Names and usage of different accounts in the income statement depend on the type of organization, industry practices and it is usually presented as sales minus sales discounts and allowances.
Every time a business sells a product or performs a service and this often is referred to as gross revenue or sales revenue. Cost of Goods Sold / Cost of Sales - represents the direct costs attributable to goods produced and it includes material costs, direct labour, and overhead costs, and excludes operating costs such as selling, advertising or R&D, etc. Selling and Administrative expenses - consist of the combined payroll costs, SGA is usually understood as a major portion of non-production related costs, in contrast to production costs such as direct labour
Liability (financial accounting)
Liabilities in financial accounting need not be legally enforceable, but can be based on equitable obligations or constructive obligations. An equitable obligation is a duty based on ethical or moral considerations, a constructive obligation is an obligation that is implied by a set of circumstances in a particular situation, as opposed to a contractually based obligation. The accounting equation relates assets and owners equity, probably the most accepted accounting definition of liability is the one used by the International Accounting Standards Board. The following is a quotation from IFRS Framework, Regulations as to the recognition of liabilities are different all over the world, examples of types of liabilities include, money owing on a loan, money owing on a mortgage, or an IOU. Liabilities are debts and obligations of the business they represent as creditors claim on business assets and they usually include payables such as wages, accounts and accounts payable, unearned revenue when adjusting entries, portions of long-term bonds to be paid this year, short-term obligations.
Long-term liabilities — these liabilities are reasonably expected not to be liquidated within a year and they usually include issued long-term bonds, notes payables, long-term leases, pension obligations, and long-term product warranties. Liabilities of uncertain value or timing are called provisions, when a company deposits cash with a bank, the bank records a liability on its balance sheet, representing the obligation to repay the depositor, usually on demand. Simultaneously, in accordance with the principle, the bank records the cash, itself. The company, on the hand, upon depositing the cash with the bank, records a decrease in its cash. A debit either increases an asset or decreases a liability, a credit either decreases an asset or increases a liability, according to the principle of double-entry, every financial transaction corresponds to both a debit and a credit. When cash is deposited in a bank, the bank is said to debit its cash account, on the asset side, in this case, the bank is debiting an asset and crediting a liability, which means that both increase.
When cash is withdrawn from a bank, the opposite happens, in this case, the bank is crediting an asset and debiting a liability, which means that both decrease
Jacopo de' Barbari
He moved from Venice to Germany in 1500, thus becoming the first Italian Renaissance artist of stature to work in Northern Europe. His few surviving paintings include the first known example of trompe loeil since antiquity and his twenty-nine engravings and three very large woodcuts were highly influential. Since the earlier part of the range would have him achieve sudden prominence at the age of nearly fifty, there have been suggestions he was of German extraction, but it now seems clear he was Italian, there are surviving documents of his in Italian addressed to Germans. He signed most of his engravings with a caduceus, the sign of Mercury, and he was probably not of the important Venetian Barbaro family as he was never listed in that familys genealogy. Nothing is known about his first decades, although Alvise Vivarini has been suggested as his master and he left Venice for Germany in 1500, and thereafter is better documented. In Germany he was known as Jacop Walch, probably from Wälsch meaning foreigner.
He may have returned to Venice with Philip the Handsome of Burgundy, by March 1510 he was working for Philips successor Archduchess Margaret in Brussels and Mechelen. In January 1511 he fell ill and made a will, and in March the Archduchess gave him a pension for life, on account of his age and weakness. His earliest documented work is his huge and impressive aerial view Map of Venice, for which a privilege was granted to its publisher in 1500. This clearly drew on the work of many surveyors, but was a spectacular feat nonetheless and it was updated by others to reflect major new building projects in a second state of the print. These may have produced before 1500, they are clearly strongly influenced by Mantegna. He showed me a man and a woman which he had according to measure. Jacobus did not want to show his principles to me clearly, de Barberi spent a year in Nuremberg, where Dürer lived, in 1500–1, and influences flowed in both directions between him and Dürer for a number of years. None of his engravings are dated, so much of the dating of them depends on resemblances to dated prints by Dürer, five of his engravings were in an album of Hartmann Schedels, which was bound up in December 1504, which gives further evidence as to dating.
De Barberi had probably made some engravings before leaving Italy, some of his paintings are dated as,1500,1503,1504,1508. Documents relating to his employment by Maximilian suggest his work was to include illuminating manuscripts and his only generally accepted drawing is a Cleopatra in the British Museum, apparently done as a study for an engraving which has not survived. His style is related to his master, Alvise Vivarini and to Giovanni Bellini. Apart from Dürer, the influence of Mantegnas technique appears in what are probably the earlier engravings, done around the turn of the century and his engravings are mostly small, showing just a few figures
In many jurisdictions, professional accounting bodies maintain standards of practice and evaluations for professionals. Such professionals are granted certain responsibilities by statute, such as the ability to certify an organizations financial statements, non-qualified accountants may be employed by a qualified accountant, or may work independently without statutory privileges and obligations. The Big Four auditors are the largest employers of accountants worldwide, most accountants are employed in commerce and the public sector. The Institute of Chartered Accountants of Scotland received its Royal Charter in 1854 and is the worlds first professional body of accountants, a Chartered Management Accountant must be a member of the Chartered Institute of Management Accountants. A Chartered Public Finance Accountant must be a member of the Chartered Institute of Public Finance, an International Accountant is a member of the Association of International Accountants. An Incorporated Financial Accountant is a member of the Institute of Financial Accountants, a Public Accountant may be a member of the Institute of Public Accountants.
Registered Qualified Accountant is a member of Accountants Institute, excepting the Association of Certified Public Accountants, each of the above bodies admits members only after passing examinations and undergoing a period of relevant work experience. Once admitted, members are expected to comply with ethical guidelines, the ICAEW, ICAS, ICAI, ACCA and AAPA are five Recognised Supervisory Bodies RSB in the UK. It is illegal for any individual or firm that is not a Statutory Auditor to perform a company audit, the ICAEW, ICAS, ICAI, ACCA, AIA and CIPFA are six Recognised qualifying bodies statutory RQB in the UK. A member of one them may become a Statutory Auditor in accordance with the Companies Act. All six RQBs are listed under EU mutual recognition directives to practise in 27 EU member states, further restrictions apply to accountants who carry out insolvency work. In addition to the bodies above, technical qualifications are offered by the Association of Accounting Technicians, ACCA and AIA, other international bodies such as ACCA and Institute of Chartered Accountants in England and Wales enjoy recognition for the purposes of supporting their members in their careers.
For instance, ACCA has achieved recognition by the Tax Practitioner Board, as Tax and BAS agents, Chartered accountancy is governed in Bangladesh by the Institute of Chartered Accountants of Bangladesh. And The Institute of Cost and Management Accountants of Bangladesh offers management accountant studies in Bangladesh, up to 2013, there were three nationally recognized accounting designations in Canada, Chartered Accountant, Certified General Accountant, and Certified Management Accountants. The national CA and CGA bodies were created by Acts of Parliament in 1902 and 1913 respectively, cGA-Canada integrated with CPA Canada on October 1,2014, completing the unification of Canada’s accounting profession at the national level. All recognized national and provincial accounting bodies in Canada have now unified under the CPA banner, the Canadian CPA designation is held by more than 200,000 members in Canada and around the world. Chartered accountancy is offered in India by the Institute of Chartered Accountants of India and this Institute was established in 1949 under the Chartered Accountants Act,1949 for the regulation of the profession of Chartered Accountants in India.
The ICAI set up the Accountancy Museum of India in 2009 and it is currently located at ICAIs office in Noida
Fra Luca Bartolomeo de Pacioli was an Italian mathematician, Franciscan friar, collaborator with Leonardo da Vinci, and a seminal contributor to the field now known as accounting. He is referred to as The Father of Accounting and Bookkeeping in Europe and he was called Luca di Borgo after his birthplace, Borgo Sansepolcro, Tuscany. Luca Pacioli was born between 1446 and 1448 in Sansepolcro where he received an abbaco education and this was education in the vernacular rather than Latin and focused on the knowledge required of merchants. His father was Bartolomeo Pacioli, however Luca Pacioli was said to have lived with the Befolci family as a child in his birth town Sansepolcro. He moved to Venice around 1464, where he continued his own education while working as a tutor to the three sons of a merchant and it was during this period that he wrote his first book, a treatise on arithmetic for the boys he was tutoring. Between 1472 and 1475, he became a Franciscan friar, in 1475, he started teaching in Perugia, first as a private teacher, from 1477 holding the first chair in mathematics.
He wrote a textbook in the vernacular for his students. He continued to work as a tutor of mathematics and was, in fact. In 1494, his first book to be printed, Summa de arithmetica, proportioni et proportionalita, was published in Venice. In 1497, he accepted an invitation from Duke Ludovico Sforza to work in Milan, there he met, taught mathematics to, collaborated and lived with Leonardo da Vinci. In 1499, Pacioli and Leonardo were forced to flee Milan when Louis XII of France seized the city and their paths appear to have finally separated around 1506. Pacioli died at about the age of 70 in 1517, most likely in Sansepolcro where it is thought that he had spent much of his final years, the manuscript was written between December 1477 and 29 April 1478. It contains 16 sections on merchant arithmetic, such as barter, profit, mixing metals, one part of 25 pages is missing from the chapter on algebra. A modern transcription has been published by Calzoni and Cavazzoni along with a translation of the chapter on partitioning problems.
Proportioni et proportionalita, a textbook for use in the schools of Northern Italy and it was a synthesis of the mathematical knowledge of his time and contained the first printed work on algebra written in the vernacular. It is notable for including the first published description of the method that Venetian merchants used during the Italian Renaissance. The system he published included most of the cycle as we know it today. He described the use of journals and ledgers, and warned that a person should not go to sleep at night until the debits equaled the credits
Inventory or stock means to the goods and materials that a business holds for the ultimate goals to have a purpose of resale. Inventory management is a discipline and primarily about specifying the shape and it is required at different locations within a facility or within many locations of a supply network to precede the regular and planned course of production and stock of materials. In the context of services, inventory refers to all work done prior to sale, balancing these competing requirements leads to optimal inventory levels, which is an ongoing process as the business needs shift and react to the wider environment. Inventory management involves a retailer seeking to acquire and maintain a proper merchandise assortment while ordering, shipping and this would include the monitoring of material moved into and out of stockroom locations and the reconciling of the inventory balances. It may include ABC analysis, lot tracking, cycle counting support, however, in practice, inventory is to be maintained for consumption during variations in lead time.
Lead time itself can be addressed by ordering that many days in advance, seasonal Demand, demands varies periodically, but producers capacity is fixed. This can lead to stock accumulation, consider for example how goods consumed only in holidays can lead to accumulation of large stocks on the anticipation of future consumption, uncertainty - Inventories are maintained as buffers to meet uncertainties in demand and movements of goods. Economies of scale - Ideal condition of one unit at a time at a place where a user needs it, so bulk buying and storing brings in economies of scale, thus inventory. Appreciation in Value - In some situations, some stock gains the value when it is kept for some time to allow it reach the desired standard for consumption. Capital Investment Space Usage Complicated Inventory Control Systems, higher number of inventory items complicates the control, stock Keeping Unit SKUs are clear, internal identification numbers assigned to each of the products and their variants.
SKUs can be any combination of letters and numbers chosen, just as long as the system is consistent, stockout means running out of the inventory of an SKU. New old stock is a used in business to refer to merchandise being offered for sale that was manufactured long ago. Such merchandise may not be produced anymore, and the new old stock may represent the only source of a particular item at the present time. Manufacturers and wholesalers inventory tends to cluster in warehouses, retailers inventory may exist in a warehouse or in a shop or store accessible to customers. Inventories not intended for sale to customers or to clients may be held in any premises an organization uses, stock ties up cash and, if uncontrolled, it will be impossible to know the actual level of stocks and therefore impossible to control them. Work in process, WIP - materials and components that have begun their transformation to finished goods, finished goods - goods ready for sale to customers. Goods for resale - returned goods that are salable, the firms work in process includes those materials from the time of release to the work floor until they become complete and ready for sale to wholesale or retail customers.
This may be vats of prepared food, filled cans not yet labeled or sub-assemblies of food components and it may include finished cans that are not yet packaged into cartons or pallets
A business is an organizational entity involved in the provision of goods and services to consumers. Businesses may be social non-profit enterprises or state-owned public enterprises operated by governments with specific social, a business owned by multiple private individuals may form as an incorporated company or jointly organise as a partnership. Countries have different laws that may ascribe different rights to the business entities. The word business can refer to an organization or to an entire market sector or to the sum of all economic activity. Compound forms such as agribusiness represent subsets of the broader meaning. Businesses aim to maximize sales to have their income exceed their expenditures, resulting in a profit, the owner operates the business alone and may hire employees. A sole proprietor has unlimited liability for all obligations incurred by the business, partnership, A partnership is a business owned by two or more people. In most forms of partnerships, each partner has unlimited liability for the debts incurred by the business, the three most prevalent types of for-profit partnerships are, general partnerships, limited partnerships, and limited liability partnerships.
Corporation, The owners of a corporation have limited liability and the business has a legal personality from its owners. Corporations can be either government-owned or privately owned and they can organize either for profit or as nonprofit organizations. A privately owned, for-profit corporation is owned by its shareholders, a privately owned, for-profit corporation can be either privately held by a small group of individuals, or publicly held, with publicly traded shares listed on a stock exchange. Cooperative, Often referred to as a co-op, a cooperative is a limited-liability business that can organize as for-profit or not-for-profit, a cooperative differs from a corporation in that it has members, not shareholders, and they share decision-making authority. Cooperatives are typically classified as either consumer cooperatives or worker cooperatives, cooperatives are fundamental to the ideology of economic democracy. In contrast, unincorporated businesses or persons working on their own are not as protected.
Franchises, A franchise is a system in which entrepreneurs purchase the rights to open, franchising in the United States is widespread and is a major economic powerhouse. One out of retail businesses in the United States are franchised and 8 million people are employed in a franchised business. Real estate businesses sell, invest and develop properties – including land, residential homes, retailers and distributors act as middlemen and get goods produced by manufacturers to the intended consumers, they make their profits by marking up their prices. Most stores and catalog companies are distributors or retailers, transportation businesses such as railways, shipping companies that deliver goods and individuals to their destinations for a fee