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Main Subject - Explanation Of Important Accounting Terms, Accounting Cycle And Responsibilities Of An Accountant
Assets
An asset may be defined as anything of use to future operations of the enterprise and belonging to the enterprise. For example, building, land, machinery, cash, debtors (amount due from customers) goodwill etc.
Equity
In broad sense the term equity refers to total claims against the enterprise. It is further divided into two categories:
(1) Owners claim-capital and (2) Outsiders' cla
An asset may be defined as anything of use to future operations of the enterprise and belonging to the enterprise. For example, building, land, machinery, cash, debtors (amount due from customers) goodwill etc.
Equity
In broad sense the term equity refers to total claims against the enterprise. It is further divided into two categories:
(1) Owners claim-capital and (2) Outsiders' cla
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
im-liability (3) Liability: Amounts owed by the enterprise to the outsiders i.e. to all others except the owner. For example, trade creditors, bank overdraft etc. (4) Capital: The excess of assets over liabilities of the enterprise. It is the difference between the total assets and the total liabilities of the enterprise. For example, if on a particular date the assets of the business amount to
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
$ 1,00,000 and liabilities to $ 30,000 then the capital on the date would be $ 70,000. It is also known as net worth.
Revenue
It is the monetary value of the products or services sold to the customers during the period. It results from sales, services and sources like interest, dividend and commission, etc.
Expenses/ Costs
Expenditure incurred by the enterprise to earn revenue is termed as
Revenue
It is the monetary value of the products or services sold to the customers during the period. It results from sales, services and sources like interest, dividend and commission, etc.
Expenses/ Costs
Expenditure incurred by the enterprise to earn revenue is termed as
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
xpenses or costs. Distinction between expense and asset is that the benefit of the former is consumed by the business in present whereas in latter case benefit will be available for future activities of the business. Examples of expenses are raw materials consumed, salaries etc. .
Loss
The term is used to convey, at least, two different meanings. First it refers to the result of the business
Loss
The term is used to convey, at least, two different meanings. First it refers to the result of the business
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
or a period when expense exceed the revenue. For example, if sales are $ 10,000 and expenses are $ 11,000 the loss will be $ 1,000. Second- It describes those efforts which fail to earn revenue. For example-un saleable stock, loss due to fire, theft, accident etc.
Proprietor/ Owner
The person who invests his money or money's worth and bears the risk of the business.
Drawings
Money or value
Proprietor/ Owner
The person who invests his money or money's worth and bears the risk of the business.
Drawings
Money or value
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
of goods belonging to business used by the proprietor for his personal use. Goods Includes all merchandise commodities which are purchased by the business for selling.
Trade Debtor
Person who owes money to the business. It happens when goods are sold on credit.
Trade Creditor
Person to whom the business owe money. It happens when goods or materials are purchased by the business on credit.
Trade Debtor
Person who owes money to the business. It happens when goods are sold on credit.
Trade Creditor
Person to whom the business owe money. It happens when goods or materials are purchased by the business on credit.
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
ransaction
Any exchange (dealing) of goods or services, for cash or on credit by the business with any other business.
Events
There are the occasions which cause changes in the value due to time element. Outsiders are not directly concerned. For example, interest accrued, depreciation in the value of assets etc.
Entry
The record of a transaction or event in the books of accounts is known a
Any exchange (dealing) of goods or services, for cash or on credit by the business with any other business.
Events
There are the occasions which cause changes in the value due to time element. Outsiders are not directly concerned. For example, interest accrued, depreciation in the value of assets etc.
Entry
The record of a transaction or event in the books of accounts is known a
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
entry.
Entity
All elements of financial statements are in relation to a particular entity which may be business enterprise, an educational or charitable organization, a government unit, a natural person or the like. An entity may comprise two or more affiliated entities and may not necessarily correspond, with 'legal entity'. Thus, the accounting information is recorded, compiled and present
Entity
All elements of financial statements are in relation to a particular entity which may be business enterprise, an educational or charitable organization, a government unit, a natural person or the like. An entity may comprise two or more affiliated entities and may not necessarily correspond, with 'legal entity'. Thus, the accounting information is recorded, compiled and present
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
d with reference to identifiable entity. The term 'other entity' refers to a subsidiary company that is a part of the same entity as its parent company in consolidated financial statements but is an 'other entity' in the separate financial statements of its parent.
Net worth
Is also known as "ownership equity" or "stockholders', equity" or "capital". It is the difference between total assets
Net worth
Is also known as "ownership equity" or "stockholders', equity" or "capital". It is the difference between total assets
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
minus outside liabilities. Alternatively net worth is the sum of capital plus retained earnings.
The Accounting Cycle
After taking decisions such as selecting a business, selecting the form of organization of business, making decision about the amount of capital to be invested, selecting suitable site, acquiring equipment, supplies etc., selecting staff, getting customers and
The Accounting Cycle
After taking decisions such as selecting a business, selecting the form of organization of business, making decision about the amount of capital to be invested, selecting suitable site, acquiring equipment, supplies etc., selecting staff, getting customers and
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
selling the goods etc., business man finally resorts to record keeping.
For all types of business organizations, transactions such as purchases, sales, manufacturing and selling expenses, collections from customers and payments to suppliers do take place. These business transactions are recorded in a set of ruled books, such as journal, ledger, cash book etc; In modern times all the records ar
For all types of business organizations, transactions such as purchases, sales, manufacturing and selling expenses, collections from customers and payments to suppliers do take place. These business transactions are recorded in a set of ruled books, such as journal, ledger, cash book etc; In modern times all the records ar
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
maintained on a computer using computer software; unless these transactions are recorded properly, he will not be in a position to know where exactly he stands. Therefore, for any business record keeping is of foremost importance.
Following is the complete cycle of accounting :-
(1) The balances of accounting; from opening balance sheet and day-to-day business transactions of the accounting
Following is the complete cycle of accounting :-
(1) The balances of accounting; from opening balance sheet and day-to-day business transactions of the accounting
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
ear are first recorded in a book known as Journal. (2) Periodically these transactions are transferred to concerned accounts, known as ledger accounts. (3) At the end of every accounting year these accounts are balanced and a trial balance is prepared. (4) Then the final accounts such as Trading and profit & loss accounts are prepared. (5) Finally a Balance Sheet is made which gives the financi
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
al position of the business at the end of the period.
Responsibilities of an accountant
In modem times traditionally, the accountant was expected to compile and present the financial information to the owners of the entity at the end of the accounting period. But with the advent of cost accounting, management accounting and financial management the responsibility and field of
Responsibilities of an accountant
In modem times traditionally, the accountant was expected to compile and present the financial information to the owners of the entity at the end of the accounting period. But with the advent of cost accounting, management accounting and financial management the responsibility and field of
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
accountant's functions have grown enormously.
The function of accounting beyond the traditionally accepted double entry routines can be grouped under:
(1) Finance function (2) Control function (3) Planning function
Finance function
Every business faces the problem of raising and using the funds.
The responsibility of accountant under finance function is to ensure that-
(1) funds are obtai
The function of accounting beyond the traditionally accepted double entry routines can be grouped under:
(1) Finance function (2) Control function (3) Planning function
Finance function
Every business faces the problem of raising and using the funds.
The responsibility of accountant under finance function is to ensure that-
(1) funds are obtai
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
ed at the lowest cost and
(2) funds are optimally used i.e. highest return is obtained.
The following types of problems are faced by the accountant while discharging finance function
What type of expenditure firms should commit? Amount of funds committed by the firm on various projects ? What sources should be used to raise the funds for a particular project? Ways and means of getting maximu
(2) funds are optimally used i.e. highest return is obtained.
The following types of problems are faced by the accountant while discharging finance function
What type of expenditure firms should commit? Amount of funds committed by the firm on various projects ? What sources should be used to raise the funds for a particular project? Ways and means of getting maximu
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
benefit out of the use of funds? Method and time of repayment of funds borrowed? Of course, the decision on the above-mentioned problems is taken in the light of management policy and objectives of the enterprise.
Control function
Accountant has to do the following to discharge his responsibility of being the controller To communicate the goals as approved by the management to individuals in
Control function
Accountant has to do the following to discharge his responsibility of being the controller To communicate the goals as approved by the management to individuals in
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
their respective fields. To make all the managers and various other persons leading their units, aware of their responsibility and assist them in achieving their goals as efficiently as possible. Look after the coordination of various activities of all the organizational units so as too optimize results.
Evaluate the performance and the degree of achievement of various responsibility centers
Evaluate the performance and the degree of achievement of various responsibility centers
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
s compared to the goals set for them and assets their efficiency. Identify areas of unsatisfactory performance and assist in the formulation of corrective measures at both ends.
Planning function
The process of planning involves long term decision as well as short term actions. In the short- term decision has to be taken regarding:
Selection of one alternative out of many e.g.. bicycle manuf
Planning function
The process of planning involves long term decision as well as short term actions. In the short- term decision has to be taken regarding:
Selection of one alternative out of many e.g.. bicycle manuf
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
cturer should decide whether to manufacture all the parts of the bicycle himself or purchase the parts and only to assemble. Profit maximization or loss minimization.
For problems involved in planning function accountant has to depend not only on accounting information but also on outside information. As regards long term planning, the task is to plan for continuity and development of the firm
For problems involved in planning function accountant has to depend not only on accounting information but also on outside information. As regards long term planning, the task is to plan for continuity and development of the firm
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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