Management of fixed assets

DepreciationDepreciation is the allocation of the cost of an asset over its useful life as determined at the time of purchase. It is calculated yearly to enforce the matching principleInsuranceInsurance is the undertaking of one party to indemnify another, in exchange for a premium, against a certain eventuality.Uninsured risksBad debtChanges in fashionTime lapses between ordering and delivery New machinery or technology Different prices at different placesRequirements of an insurance contract    * Insurable interest          o The insured must derive a real financial gain from that which he is insuring, or stand to lose if it is              destroyed or lost.         ...

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STOCK

Purpose of stock control Ensures that enough stock is on hand to satisfy demand. Protects and monitors theft. Safeguards against having to stockpile. Allows for control over selling and cost price.StockpilingThis refers to the purchase of stock at the right time, at the right price and in the right quantities.There are several advantages to the stockpiling, the following are some of the examples: Losses due to price fluctuations and stock loss kept to a minimum Ensures that goods reach customers timeously; better service Saves space and storage cost Investment of working capital kept to minimum No loss in production due to delaysThere are several disadvantages to the stockpiling, the following are some of the examples: Obsolescence Danger of fire...

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Management of current assets

Credit policyCredit gives the consumer the opportunity to buy, purchase or acquire goods and services, and pay for them at a later date. This has its advantages and disadvantages as follows:Advantages of credit tradeUsually results in more customers than cash trade. Can charge more for goods to cover the risk of bad debt. Gain goodwill and loyalty of customers. People can buy goods and pay for them at a later date. Farmers can buy seeds and implements, and pay for them only after the harvest. Stimulates agricultural and industrial production and commerce. Can be used as a promotional tool.  Increase the sales.  Modest rates to be filled.  can be a marketing toolDisadvantages of credit trade  Risk of bad debt.  High administration expenses. ...

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