We will discuss these accounting principles and concepts in simple language, making them easily understandable for everyone, whether you’re a student, a small business owner, or just someone looking to gain a better grasp of financial matters.
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The accounting cycle comprises a sequence of well-defined and interconnected steps that accountants and financial professionals follow to record, process, and report financial transactions.
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In this article, we’ll explore the managerial accounting vs. financial accounting. Both play crucial roles in the business world, but they serve different purposes. So, let
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Managerial accounting is the process of analyzing financial data and generating relevant information to support internal decision-making within an organization.
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Working capital is the difference between a company’s current assets and its current liabilities. In other words, it represents the amount of money a company has available to cover its short-term obligations and expense.
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Managerial Economics can be defined as the branch of economics which deals with the application of various concepts, theories, and methodologies of economics to solve practical problems in business management.
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Human resource accounting is a type of accounting that focuses on measuring the value of a company’s human resources, such as its employees, in financial terms. The basic idea behind human resource accounting is that a company’s workforce is a valuable asset, just like its physical assets, and should be accounted for in a similar manner.
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Pricing is a process of setting the value that a manufacturer will receive in the exchange of services and goods. If manufacturers set prices too high, they miss out on valuable sales. Set them too low, and they miss out on valuable revenue.
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Sales are the delivery of products from the manufacturer to consumers in exchange for money and marketing is basically understanding the customer’s need and introducing products accordingly.
Sales basically follow a fragmented and product-oriented approach, whereas marketing follows an integrated and customer-oriented approach.
Sales focus on maximizing the seller’s profit but marketing focuses on generating profit through customer satisfaction.
Sales follow the push strategy and marketing follows the pull strategy.
The target audience of sales is both individuals and organizations, moreover, the target audience for marketing is the public.
The primary objective of sales is to influence the target audience to become a buyer, and the primary objective of marketing is to identify customers’ needs and make products accordingly.
The law of supply and demand is possibly one of the most essential concepts and it is the backbone of an economy. According to the law of demand and supply, when there is a higher demand for a product or service, there is a rise in the supply of such product or service and vice versa. The law of demand and supply describes the interaction between the desire for a product and the supply of that product. For example, if the supply of a product is low and the demand is high, it signifies such product is lacking for the number of people that desires it, therefore, it will lead to an increase in the price of the product.
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