A manufacturing account records the administrative expenses and the finance expenses of the business

It guides how the expenses should be matched with revenue for determining exact profit or loss for a particular period.

This concept assumes that, for accounting purposes, the business enterprise and its owners are two separate independent entities

If all the business transactions are expressed in monetary terms, it will be easy to understand the accounts prepared by the business enterprise.

Which side does Discount Allowed belong?

According to this convention the accounting practices should remain unchanged from one period to another.

The use of a transfer price enables a factory to make additional profit which is added into the profit for the year in the income statement

It encourages the accountant to post each entry in opposite sides of two affected accounts

Cost of materials consumed is calculated as opening inventory of raw materials + purchases - closing inventory of raw materials

This concept states that a business firm will continue to carry on its activities for an indefinite period of time.

In a manufacturing account, prime cost comprises three cost: direct materials, direct labour and factory overhead

Which side does Receipts from debtors belong ?