Classification of Costs Costs can be classified in various ways, including by function, behavior, and traceability. Below are some common types of cost classifications: Elements of Cost Costs can also be classified by type, function, variability, and more. Broadly, there are three primary categories in this classification: Understanding these classifications and elements is crucial for…
Meaning of Cost Accounting:Cost accounting is the process of recording, analyzing, and interpreting a business’s costs. It helps management teams make informed decisions about pricing, budgeting, and resource allocation. Objectives of Cost Accounting: Scope of Cost Accounting:The scope of cost accounting involves collecting, evaluating, and summarizing data related to the costs of services, products, or…
Cost accounting, as the name suggests, involves the accounting and management of costs within a business. It encompasses the recording, classification, analysis, and allocation of costs related to production and other business operations. Understanding cost accounting is crucial not only for academic purposes but also for its practical applications in business decision-making. Key Concepts in…
The origin and evolution of cost accounting can be traced back to the Industrial Revolution. Before this period, cost accounting methods were basic and focused primarily on direct costs. Businesses were generally small, and costs were mainly composed of direct variable expenses such as labor and materials. During the Industrial Revolution, cost accounting evolved to…
The Goods and Services Tax (GST) was introduced to streamline the indirect tax system in India by subsuming multiple taxes levied by the Central and State Governments into a single tax. This initiative aimed to reduce tax cascading and create a unified national market for goods and services. What is GST? GST is an indirect…
Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) has decided to cut the repo rate for the first time in two years, reducing it by 25 basis points to 6.25 per cent from 6.5 per cent, Governor Sanjay Malhotra announced on Friday. During the meeting, which took place between February 5 and 7, MPC…
Every year in its annual budget (also known as Annual Financial Statement) the Government provides details of how much money it expects to reap from various sources and how it intends to spend the funds. As of now, the Government of India earns about 80% of its total revenue through taxes and the remaining 20%…
Income Tax Refund An income tax refund is issued by the Income Tax Department when the taxes paid by an individual (through TDS, TCS, Advance Tax, or Self-Assessment Tax) exceed the actual tax liability. The tax liability is determined after accounting for all eligible deductions and exemptions during the assessment process. Steps to Claim an…
Income Tax Return (ITR) is a form used to declare a taxpayer’s gross taxable income for a given fiscal year. Filing an ITR is crucial not only for nation-building but also offers several personal financial benefits. It enables you to claim tax refunds, simplifies loan applications, and allows the carry-forward of losses. Additionally, it provides…
TDS (Tax Deducted at Source) refers to the tax collected by the payer on specified types of income while making payments to the payee and subsequently depositing it with the government on behalf of the payee. This system was introduced to reduce tax evasion.This is mandatorily deductible and payable from a wide range of incomes…