Goods in Consignment that the company have been sent to dealer or seller, so such goods in consignment still are belonged by sender till a lot of its goods sold. One of targeted sales with applying goods in consignment method are for increasing total sales with giving a complete service for their customers.
Goods in consignment will be reported as cost plus a handling cost and delivery cost at time of delivery goods form the seller place to buyer place.
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Jun 6, 2009
Goods in Consignment
Common Stock and Preferred Stock
Common Stock and Preferred Stock
Common Stock and Preferred Stock are not different each other, but it’s not mean that it’s the same. Common Stock is a kind of stock that be issued without having a privilege right for stockholders, but Preferred Stock is the other kind of stock that be issued with having many of privilege for their stockholders.
In the meaning that more correct, common stock can be explained as stock that do not give a privilege right anything, because their stockholders still have other right like speech right in the board committee.
But for stockholders of preferred stock, they obtain a privilege right as stockholders like receiving a part of net income of company certainly for each year. Even they still receive dividend although the company is suffering operating loss. Dividend can be paid as cumulatively for years before. As consequently, stockholder of preferred stock have not speech right in board.
Treasury Stock
Treasury stock is defined as sum of own stock that have issued with many reasons have been bou ght back. The kind of these stocks are names as treasury stock.
Note of treasury stock problems :
Note of treasury stock problems :
* Treasury stock may not regard as assets, even must be reported as substaction of equity.
* No profit or loss from activity of treasury stock
* Retained earning can decrease from transactions of treasury stock, but retained earning never increase from all transactions like this.
Two method for recording transaction of treasury stock :
* Cost method
* Par value method
Cost versus Expense
In all of discussions, between cost and expense always are different. Cost and expense usually have been explained separately, but in the applying cost and expense sometime are forgotten their differences.
Cost have the meaning that we have company resources in limited. In their limitation, we must do all of activities. Cost is defined as total expending of resources are sacrificied for obtaining assets or usefulness. For example : prepaid expense, fixed assets or inventory. In shorty, cost is sum of asset that is not expired yet. In the financial statement, cost is put in balance sheet.
Expense is part of cost that have became expense. Expense is cost that is expired. Total usage of utilities also are classified as expense, and bills of utilities are their expenses. For example : depreciation, insurance expense, supplies expense and utilities expense (water, gas, electric, items of postage etc). In the financial statement, expense is put income statement.
Premium versus Discount
Premium versus Discount
Premium appears when bond’s price in issuing time higher than par value. The Excess value between market value and par value is named as premium. The premium value appears if stated rate of interest bigger than market rate. For example : a bond of Bebek, Co was sold with 104%.
Discount appears when bond’s price in issuing time lower than par value. The variance value between market value and par value is named as discount. The discount value appears if stated rate of interest more little market rate. For example : a bond of Bajing, Co was sold with 96%.
For premium and discount must be done by amortization with straight line method and effective interest method.
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