Second, we have to determine a single theme like going green, the color of our company and many others. Start purchasing or ordering for logo floor mats and table cloth. Heavy linen table cloths are highly recommended and don’t forget to put our company logo on the table cloth. Third, in a piece of paper, we can start to determine the table and other accessories placement on our exhibit booths.

Fourth, we can prepare for banner and display boards to show the information of our company and product. Make sure that the trade show displays suits the booth theme. After that, we can prepare for small things like business cards, flyers, merchandises and many others. Make sure to set up the booth a day before the exhibition day, so we have a lot of time for preparation.

Online plan collaboration is going to aid you to study and clarify information and create meetings more creative for your collective or small business. Online propose collaboration, online text file collaboration and online software plan collaboration are big ways to accept your company one step forward of the competition. Nowadays business world involves decent and productive software application creatures for the work that is going to force teams collectively to acquire the work done.

Though the terms “mergers” and “acquisitions” are almost always used together in a business setting, they do not mean the same thing. There are similarities between the two business actions, and this results in a grouping of the words mergers & acquisitions more often than not. To grasp the meanings of the words, you should examine each separately before using them in your everyday language. Once you know what mergers & acquisitions are, you can confidently approach the situation.

Mergers often happen between two companies that are on relatively equal footing. This means they have similar size and strength so that when they are combined, one does not overshadow the other. The decision to pursue mergers is agreed upon by the companies involved, and a combined company name often results, as well. In the corporate world, mergers are the friendliest of business combinations and often leave both companies in an even stronger position when the deal is complete.

Acquisitions are an entirely different story. These often happen when a larger company purchases a smaller company. Also known as a buyout or a takeover, acquisitions are mostly friendly, but in some cases, they may be considered hostile. There is always the possibility of mass layoffs and terminations with an acquisition. Prior policies are sometimes rendered worthless as the larger company exerts its power over the smaller one. In most cases, the larger company retains the name, while the smaller company must acquiesce to a new titling.

Because mergers & acquisitions both refer to the act of two companies becoming one, they are often grouped together. Those that work in mergers & acquisitions understand the distinction and work hard to educate companies on the differences between the terms. The success of these business combinations always rests on the ability of employees and executives to understand the future roles of each company following the agreement. Even in a hostile takeover, there is always the distinct possibility that the employees of the smaller company will end up in a much better situation. Smaller companies that are acquired often experience more success under the power of the larger company, if for no other reason than the larger company has stronger financial resources and marketing.

Mergers & acquisitions can sometimes have a bad reputation, but the outcome doesn’t have to be bleak. For the economy to continue to grow and prosper, the combination of businesses often needs to occur. Only by understanding the true nature of mergers & acquisitions can we accept the growth and prosperity that can follow.

The purpose of the first contact (which should happen when the invoice is 3-5 days past due) is to initiate a dialog and find out why the payment is late. You are asking for information and not demanding a payment. You do not want to introduce an adversarial or confrontational tone to the discussion at this stage. In many cases, particularly for larger customers, an invoice with a problem of some kind will sit until you initiate contact to get the matter resolved.

First Phone Call

Ideally this first contact is made by phone. A two-way conversation with the right party can get to the point very quickly. However, not every business has the resources to call every past due customer in a timely manner and in many cases it is difficult to reach a knowledgeable person at your customer, especially if it is a very small business and you are trying to reach the owner. It is appropriate to send a written request for information for invoices less than a specific dollar amount eliminating the initial attempt to reach them by phone. A written request is also recommended if you have left two messages and have not been called back.

Written Communication

The written communication should be very brief and to the point: “Payment for invoice 1234 was due on March 15 but as of today we have not received payment. Can you please take a moment to complete the bottom portion of this letter and return it to me or, if it’s more convenient, give me a quick call to discuss the matter.” Provide a phone number, fax number, mailing address and email address on the letter. The letter will have the same content regardless of how it is sent.

Create A Checklist

A critical element of the letter is a checklist you provide to define reasons for non-payment. Providing an easy form for your customer to complete will accelerate resolution times. The specifics can be tailored to your industry and your specific types of customer but might include some of the following options:

o Payment was mailed on _____________ by check number ____________
o Payment is scheduled for ______________
o Invoice not received. Please provide a copy.
o Need Proof of Delivery in order to process for payment.
o Need approved time sheets in order to process for payment.
o Need Purchase Order number (or copy of PO) in order to process for payment.
o Other reason: ____________________________________

Mail, Fax, or Email

The next question is whether to send this letter by postal mail, fax or email. There are advantages and disadvantages to each.
• Mail is more expensive because of materials cost and postage and takes longer to get there. However, a professional looking envelope sent to the Accounts Payable Department of any business will be opened and read. Further, you will be notified if the mail is undeliverable – potentially a serious problem – and can request “Address Service” to be informed by the Postal Service (for a small fee) that mail is being forwarded, allowing you to update your records.
• Fax requires that you have a working fax number for the business that goes to the right department. Some small businesses do not have fax lines and large corporations can have many. Ideally you would have requested a fax number on your credit application or order form but that does not always happen. Depending on your office equipment, sending a fax can take significant effort and may be just as costly as mail.
• Email is easy, fast and inexpensive but does not always get to the right person. Email can be easily ignored, blocked by spam filters or sent to a generic address (info@somecompany.com) and wind up nowhere. Also, the email address on file is often the purchaser and not the Accounts Payable department.

Email is the preferred method of communication only if you have the personal email address of a responsible individual that you have reason to believe will receive and read your emails. You might want to test that by sending a “welcome” email to new customers and asking for a response of some kind to verify that it was read. Send a fax if it’s easy to do so and the customer has provided a fax number for their accounting or accounts payable department. Mail works in every other case.

Consistent Follow-Up

Follow up on communications. Give the customer no more than five business days to respond to a letter or three days to respond to an email or fax. If they do not respond within this time then move to the next step in your collection process, which could be a phone call or, for smaller transactions, an initial demand letter. A second written communication should be sent by mail and not by fax or email.

Document Communications

It is important to document communications you have with your customers so that you can reference discussions, dates, and review how many attempts it takes to resolve a past due invoice. Collections software is useful for documenting phone conversations, automating outbound email communications, storing inbound email responses, or for creating mail merge letters that you mail to your customers.

I had set aside a specific amount of money to invest in my business and to pay bills while the business was getting up and running. What I’ve found is that whatever amount that is for you, you could always use more. Unless you maximize your investment along the way.

Before I quit my job in corporate, I had hired a Virtual Assistant to develop and set up my website, and to get things accomplished more quickly. This worked well for me, since although I had these expenses with no income for a period of time, I knew it would bring me to an income more quickly once I quit my job. I highly recommend starting your business before quitting your job, since it allows you to make decisions without the added pressure of having no income.

You can’t do it all on your own.

Instead, you need to leverage your time and your resources. By doing it this way, it also almost forces you to delegate, systematize and automate as much as possible. This is a good thing, since it frees up your time once you do move more fully into the business, allowing you to focus only on your brilliance work: working with clients and attracting more clients.

Outsourcing allows the person you delegate to do their brilliance work. I found that although I could do a lot of things, and do them quite well, it wasn’t the best use of my time to be doing them. My time was better used to meet with people to attract more clients and more work, and to work with clients who are thrilled to work with me.

Let me give you an example. I hired an onsite/virtual Business Manager. This means that she is someone who is local, who works both at her home and comes in to my home office periodically. She has a marketing & human resources background, which is similar to parts of my background. I could let my ego get in the way, wondering if she’ll do a better job than I would do, thinking that she might market in ways that I don’t want her to.

Instead, I’m thrilled to have someone of this high caliber on my team, to train her in my way of doing things, to depend on her to organize, systematize and implement the plans we’ve created together. This can only be a good thing! It allows us to get more done, make more money, and enjoy your time off! She is doing what she loves to do, which allows me to do only the things I love to do.

I learn from her just as much as she learns from me.

And yet, she’s not me. So clients who connect with me wouldn’t necessarily connect with her. They are attracted to me because of ALL of my experiences and background, along with my natural abilities and the inner magnetism that each one of us automatically has. There is no one who is exactly like me.

My team currently consists of:

• Online Web Virtual Assistant – 10 hours/mo
• Onsite/virtual Business Manager – 16 hours/mo
• Social Media VA – 10 hours/mo
• Social Media Manager – 5 hours/mo
• Public Relations/Speaking VA – 40 hours/mo
• Travel Agent – 2 hours/mo
• SEO on an as-needed basis
• Accountant
• Graphic Designer on an as-needed basis

Total hours saved monthly: 83+ hours each MONTH!

Soon I’ll be adding:

• Bookkeeper

What do I use my time saved for? Taking care of me, creating products & services, learning and brainstorming, time with my family, flexibility to schedule my time. I LOVE being self-employed!

How did I get to be “OK” with outsourcing? As my income grew, the amount I outsourced grew. Could I do this all by myself? Maybe. Would I be healthy and sane? Probably not. Could I get all of the things accomplished in the same amount of time? Definitely NO. For example, I write my ezine content each week, then send it to my VA. Could I put it into the ezine format, and send it to my list? Sure. I used autoresponders a few years back when I was Affiliate Manager for two online real estate companies. But it would take me longer and it would definitely be more heartache and frustration. I’m HAPPY to pay my VA to do it for me. I think of the time it would take me to do this, and instead I focus on attracting a new client or doing client work. THIS is a better use of my time. Focus instead on your brilliance work.

Depending on your rates, usually you can pay someone else to do certain tasks for much less than you could do it yourself. If your rates don’t support you being able to outsource, take a look at your hourly rate and figure out what rate you would need to charge to support outsourcing. Next look at what value you would need to add to be able to charge a higher fee. Can you add this value, or do you need extra training to be able to do this? Sometimes its our own limiting beliefs that hold us back from charging what we deserve.

Personal development is becoming more and more popular, and for good reason. It shows you how what you think to be true may not necessarily be true, it could be a view to life that has been learned. I recommend you start reading some of the personal development books available, a great one to start is The NEW Psycho-Cybernetics co-authored by Dan Kennedy.

My team and I have a weekly team call every Monday. On the call, each person has 10 minutes to update what they are working on, what questions or clarification they need, and ideas they want to share. This has become a very valuable time, since it helps everyone to understand areas they can support others in growing the business.G

Here is a great quote from Melanie Benson Strick,

“Surround yourself with powerful implementers. When you leverage your time and build a team of good people, then your dreams become real 100 times faster. Most entrepreneurs are really great with ideas but lose traction when it comes to details and managing projects.”

I’ve been fortunate to have worked the past 8 years as Manager of Operations, Marketing & Human Resources, so as an entrepreneur I’ve had practice with the details and managing projects. But I still surround myself with high-quality people. My dreams ARE becoming real 100 times faster.

Have you ever thought of buying a small business? If you had the means to buy a small business, will you do it or rather build one from scratch?

“I was vehemently against acquisitions. Now let’s buy everything in sight. Well, that’s a slight exaggeration. We are a little more strategic than that. But everything was on sale.” – Larry Ellison

Acquisition is the new strategy on board. Many successful entrepreneurs have expanded their business using the acquisition model and the upcoming entrepreneurs are now following the same path. Most entrepreneurs now would rather resort to buying an already established small business than building one from scratch.

Many smart entrepreneurs are now including acquisitions as part of their company’s growth and expansion strategy because acquisition is an effective way to enter a new market terrain without starting from scratch.

Does buying a small business catch your fancy? Do you have access to funds and you have your eyes on some small businesses in your vicinity? Then sit back as I unleash three intelligent steps to follow to avoid getting your fingers burnt.

How to buy a Small Business Successfully: The Larry Ellison’s Strategy

When it comes to building a business successfully, I have several business mentors and company models I look up to for advice and inspiration. I will suggest you read the article below to get a better understanding of the point I am trying to stress.

Each of the mentors I chose has a specific impact and value in my life. When it comes to no nonsense business growth and expansion strategy via acquisition; then Larry Ellison is the entrepreneur to listen to because of his wealth of experience with respect to acquisitions.

Why am I using Larry Ellison as a role model? A little dig into some of Larry Ellison’s successful Acquisition feats

“In order to grow at this pace, there’ll have to be a couple of acquisitions along the way. The tricky thing is to grow at this rate and maintain a 40 percent operating margin.” – Larry Ellison

Beginning in 2004, Larry Ellison set out to increase Oracle’s market share through a series of strategic acquisitions. Oracle spent more than $25 billion in only three years to buy a flock of companies both large and small, makers of software for managing data, identity, retail inventory and logistics.

The first major acquisition was PeopleSoft, purchased at the end of 2004 for $10.3 billion. No sooner was the ink dry on the PeopleSoft deal than Ellison trumped rival SAP to acquire retail software developer, Retek. Within the following year, Oracle also acquired competitor; Siebel Systems. Larry Ellison capped his buying spree with the acquisition of business intelligence software provider Hyperion Solutions in 2007.

BEA Systems was bought for $6.5billion, Sun Microsystems was bought in January 2010 for $7.4billion and Oracle owns a 52% stake in Net Suite worth $480million. As at March 2010, Oracle was reported to have acquired 57 companies between 2004 and 2010.

At this point, the question running through your mind might be: why spend so much money buying businesses?

Now using this article as a medium, I will be sharing with you the step by step approach to replicating the successful acquisitions strategy of Larry Ellison. Without wasting much of your time, below is the Larry Ellison’s strategy to buying a small business successfully:

Buying a Small Business Successfully: The Larry Ellison’s Strategy

“Everyone thought the acquisition strategy was extremely risky because no one had ever done it successfully. In other words, it was innovative.” – Larry Ellison

1. Prepare yourself to go through the acquisition process

Before you think of buying a small business, let me warn you ahead of time that the process associated with acquisitions; which is similar to the entrepreneurial process can be very stressful. It takes a lot of calculations, strategizing, commitment and discipline to successfully buy a business. Be it a small business or a big one.

Another important issue to deal is your skills as an entrepreneur. How smart are you when it comes to dealing with business affairs? Before ever engaging in an acquisition, especially if you are on the buying side; you need to hone your entrepreneurial skills and one of such skills is the art of negotiation.

“If you cannot negotiate, you will end up getting good deals at exorbitant prices or worse still, you will get nothing.” – Ajaero Tony Martins

Mastering the art of negotiation is very important to your success as a business owner. I can’t go into the details of how to hone your entrepreneurial skills and preparing yourself but I think the resources below will be of great help.

2. Assemble a strategic team

The first advisable step to buying a small business is to assemble your own strategic team. This team should not necessarily be those at the helm of affairs of your business. The process of buying a business is quite tedious so it’s advisable you leave out some members of your business team. They will see to the smooth continuous running of your existing business.

The team you are about to assemble should be charged with the responsibility of bringing your acquisition plan into reality. As an entrepreneur, it’s your responsibility to assemble an excellent internal working team, as well as an external team of advisors.

Your internal team will be made up of representatives from your finance, marketing, strategic planning and operations department. The internal team members should be creative and aggressive. They should focus on the core fundamentals that drive the acquisition strategy such as distribution, integration and expansion of the customer base.

As for your external acquisition team; it’s going to include experienced external advisors such as attorneys, accountants, investment bankers, valuation experts, insurance experts and employee benefit experts. Most importantly, your external team should include your business coach or mentor, who should also be well experienced in the acquisition game.

3. Carry out feasibility on small businesses of your interest

After assembling a strategic business team, the next step to take is to carry out a feasibility study on the proposed businesses of your choice. Please note that your team should also be involved in this process.

A rule of thumb in the acquisition process is this: do not select a company and hope you can acquire it for nothing; it’s the same as saying “don’t carry all your eggs in one basket.

“If it’s your goal to buy a company, then you have to select at least five businesses and begin work on them. Only this way will you be able to buy a business at an excellent price. Below are some great reads that will make carrying out feasibility quite easy.

4. Work out a compensation plan for your external advisory team

As the entrepreneur leading the entire acquisition team, it is your duty to plot a compensation plan for your external team. You can work out the compensation modalities with your internal team. Compensations for external advisors are usually based on an agreed percentage of the total price of the business acquired.

5. Develop a strong acquisition plan

“It is better to buy a wonderful company at a fair price than to buy a fair company at a wonderful price.” – Warren Buffett

This is where all the acquisition strategies and plan is plotted. Different industries require different approach and strategy. This is the point where the following questions needs to be answered:

Is your team considering a hostile takeover?

What is going to be the long term impact of the acquisition on your company?

How does your team intend to finance the acquisition?

Have you developed a contingency plan just in case things go the other way?

These are few of the questions you are suppose to answer in the process of developing your acquisition plan. Below is additional information that will be of relevance to you.

6. Make your offers known to the proposed sellers

Before making an offer to the proposed sellers, make sure the above five steps have been thoroughly settled. If you recall, I said earlier that if you intend buying a company, you should pick at least five businesses of your interest and this is my reason for making such statement. When you send out acquisition proposal to the company you intend buying, there is every possibility that your proposal will be thrown back at you. This is always expected except the company to be acquired is already on sale.

When making your offer known to the seller, make sure you do so professionally and if eventually a meeting is scheduled between you and the proposed seller, make sure you know your objectives before entering the meeting venue.

If you are not a good negotiator, then let a capable member of your team do the talking while you observe the prevailing atmosphere logically.

7. Strike the deal

Just as I stated somewhere above, you should have a contingency plan just in case things don’t go your way. But if the reverse is the case, then you will definitely end up striking the deal. Acquisition is really a boring process with loads of paper work and series of meetings. If things go your way, then strike the deal and move on but if not, fall back to your contingency plan and focus on the next company at hand.

“I think you might see us growing much deeper into banking. You might see us acquiring companies in the banking area. You might see us acquiring companies in the retail area. I think you might see us acquiring companies in the telecommunications. I think you will see us getting stronger in business intelligence.” – Larry Ellison

As a final note, I know most entrepreneurs reading this will say they have no intention of buying a small business because they either lack the guts or the capital to do it. Anyway; for those who desire to go through the acquisition process, I wish you all the best.

Consolidating personal debt into your mortgage is a popular means of lowering the interest rate on your personal debt and combining several different outgoing payments into one…saving you time and money!

As with anything in life, we tend to appreciate things that are easier for us…

How do you debt consolidate?

This is done by refinancing your mortgage to another lender, and also requesting the new lender to pay out your personal debt in the process…

But is debt consolidation really saving you money?

The answer is NO

Well, not all the time anyway…it depends on how you manage your payments!

You see, personal debt has higher interest rates, so consolidating into a mortgage means you have a lower rate overall…right?

yes…BUT

The term of your personal debt is now much much longer. As interest is calculated daily, this means that your personal debt in the long run will cost you MORE in interest if you consolidate it!

This is the case for eg. personal loans or hire purchase loans, but not the case for credit cards as these are ongoing until the card is canceled…

Don’t believe me?

Let’s look at a personal loan balance of $25,000 at 12% over a 10 year term.

Total cost is $18,050 (if rates remain constant).

Let’s take the same loan balance of $25,000 at 7% (consolidated into your mortgage) over a 30 year term.

Total cost of that $25k personal loan is now $34,877 (rates constant)

So what can you do to make debt consolidation worth your while?

if we keep using the above example, what we can do is work out what the repayments would be over a 10 year term but using your interest rate on your mortgage…so in this case 7% and $290pm…

now subtract this from what the original payment would be if you hadn’t consolidated this debt, as above 12% over 10 yrs…$358pm.

The difference (approx $70pm) is what you need to keep paying extra into your mortgage to effectively have paid off the personal loan in the original time-frame but at a lower interest rate…

If you can do this, then debt consolidation is a good way to lower your payments…

With credit cards, consolidation has a greater benefit purely due to the much lower interest rate alone. As credit cards don’t have any ‘end term’ (such as 10 years for a personal loan), then the savings are much more significant!

Whether if you live in Los Angeles or Philadelphia, the chance is that you can always count on the VeritasPrep for best possible academic help you can get it locally. Yes, VeritasPrep courses are available at these two cities along with many others such as New York, Miami, Denver, and even London. Now you better to check on the VeritasPrep official website for more information about Santa Monica gmat classes you can attend to.

If you want to, it is also quite possible for anyone to apply their classes via online, which surely that would save you much of time and frustration to get qualified MBA preparation you wanted. Many had tried their services and mostly get satisfied with the learning method and result they achieved in overall.

The Convention stresses the relevance of that information is only provided by the accounting treatment is as relevant and useful to achieve their goals. For example, the business is to know what interested the total cost of the work? He is not to know how many people a lot and save what interests them.

(2) objectivity

The convention of objectivity emphasizes that accounting information must be measured and expressed by the standards that are generally acceptable. For example, should the stock of unsold homes at the end of the year is as a cost and not valued at a higher price, even if it will be probably sold at a higher price in the future. The reason for this is that no one be that the rates that prevail in the future.

(3) Feasibility

The Convention stresses, including the feasibility of time, effort and cost analysis of accounting information should be compared vis-à-vis the benefits. For example, the cost of “oil-and fat-free” The machine is so small that its breaking per unit of production is meaningless and amount to a waste of time and work of the accounting staff.

Accounting Concepts

(1) The importance

It refers to the relative importance of an object or event. Those who take the accounts constantly with the need to face judgments about materiality. Is it important enough for the user of the information, which are influenced by him? The essence of the materiality concept is: the omission or misstatement of an element is important when considering the circumstances, the extent of the problem is such that it is likely that the decision of a reasonable person relying on the report have been changed or be influenced by the inclusion or correction of the problem.

(2) Exercise

Although accounting believes in the pursuit of life to know the unity concept of the company is eternal, but he is responsible for “results of the activity during the period (usually one year) carried out. This attempt to accounting gains or losses do realized or carried . by the company during the period it is usually the calendar year (January 1 – December 31), but may in other cases it is the year (April 1 – March 31) or a different period depending on the convenience of the company or its business practices after the country.

With this concept it is necessary to take into account during the billing period, all revenues and expenditures, which take place from the time of the year. The problem is that this approach would have equitable distribution between capital expenditure and revenue will be made. Otherwise, the results of the financial statements are shown to be affected.

(3) Implementation

This concept emphasizes that profit must be considered only if it is done. The question is, should benefit at what stage are accrued as? Whether at the time of receipt of the order, or if the command is executed or when receiving money. To answer this question the accounts with the law (Act on the sale of goods) and recognizes the principle of the law or the turnover is achieved only when the goods are transferred. It means that the income is deemed to have acquired in the case, transfer of “ownership to the buyer know. Are involved in sales.

(4) the

Although the company is a company uses its artificial continuity in different reporting periods for the determination of the preliminary results divided. This gain is the measure of economic performance is a concern and as such increases the equity holders. Since winning a surplus of revenue over expenditure, it is necessary to collect all revenue and expenditure for the reporting period. The concepts of realization and exercise are derived mainly purchased by the necessity of adjustment costs with revenues in the period. Results and outputs in a profit and loss account should be transferred both to the same goods or services rendered during the reference period. The concept of reconciliation should match the revenue expenditure of the relevant accounting period. So we must determine the income during an accounting period and the costs to earn income that arise.

(5) Entity

Under this approach the task of measuring income and wealth accounting is provided to identify the identification or other entity, unit or institution and different and treated separately from its owner or contributors. In law, the distinction between owners and the company is established in the case of companies, is in the books of this distinction in the case of sole proprietorships and partnerships made as well. For example, property in the balance of society is used for commercial purposes as a business expense, but of similar goods by the owner or owners for their personal use are used as treats his drawings. Such a distinction between the owner and the business unit’s accounting earnings reports helped more objectively and fairly. It was also on the development of “responsibility accounting” out that lets us know that the profitability of the different subunits of the major companies.

(6) Currency stability

Accounting requires that the purchasing power of the monetary unit, such as rupee remains the same everywhere. For example, the intrinsic value of rupee is the same and equal to the year 1800 and 2000, excluding the effect of increasing or decreasing the purchasing power of the currency through inflation or deflation. Despite the fact that the assumption is unrealistic and practice is to ignore changes in the value of money now widely questioned, always means to integrate the proposed solutions to the changing value of money in the account., Method of current purchasing power (CPP) and the current method of cost accounting (CCA) evolutionary phase. Therefore, for the moment we have to be satisfied with the concept of “stable currency.

(7) Costs

This concept is linked to the concept of continuity of operations are. According to this study an asset, as a rule in the books is bought at the price, was recorded saying to his cost. This “cost” is the basis for the recognition of the asset over the next period. These “costs” should not be confused with the “value”.

It must be remembered that the real value of assets changes from time to time, this does not mean that the value of such assets are recorded incorrectly in the books. The book value of assets does not cover their true value. They do not signify that the values ​​that are reported the values ​​for which they are sold. While the assets are accounted for in the books at cost, over time they will decrease in value due to depreciation. In some cases, only assets as “goodwill” paid when appearing on the books at a price and that nothing is paid, it does not appear, even if that asset created the name and fame a concern.

Therefore, the values ​​attached to the balance sheet and profit in the profit and loss account shown not to say that the true measure reflect the company’s financial position because they do not compare with the market value of the assets or their replacement value. This idea that the transactions recorded at cost and is not an arbitrary or subjective value is known as cost concept. Over time, the market value of fixed assets such as land and buildings vary greatly in their costs.

These changes or variations in value are usually ignored by auditors and they know continue to appreciate in the balance sheet at cost. The principle of valuing assets at cost rather than market value is the principle of the concept of cost. In their view the current values ​​are set but rather the cost of the unit.

The cost is based on the principle of objectivity. Proponents of this method argue that as long as the users of financial statements have confidence in the statements, it is not necessary to change this procedure.

(8) Conservatism

This concept emphasizes that profit should never be expected or exaggerated. Traditionally follows accounting rule “does not win and give to all kinds of losses. For example, the closing stock is valued at cost or market value, whichever is less. The effect of the above is that, if market prices fell then the” expected loss “But if the market price increased, so you ignore the” expected benefits. ”

Critics point out that conservation is at a higher level result in the creation of hidden reserves. This is quite contrary to the doctrine of revelation. However, a reasonable degree of conservatism can not be criticized.

Accounting Equation

the concept of the two can be said that “gives every debit there is a credit” to be. Each transaction must have two effects, since the size and quantity. This concept has been in the accounting equation, that any time a company’s assets must be conducted in the same countries (monetary) and total assets outsider. This can be expressed as the equation:

An L-= P

where

A is for the assets of the company;

L stands for the debt (claims underdog) of the company;

P is entitled Holder (capital) on the unit.

(The form of the equation P = AL is the financial situation with the legal interpretation. He stressed that the claim itself the owner of the account, by providing for the demands of the disadvantages that the company total assets of the company).