Basic Accounting Lectures

What are stock Levels?
Every business has to maintain stocks of material/goods which are used during the production process. Following stock levels are self-explanatory.  Like reorder level suggests that at what level we should re order the stock. Similarly maximum or minim stock levels suggest the maximum or minimum stocks to be maintained [...]

What is Economic Order Quantity?
There are two costs attached to stock:

1) Ordering Cost : All cost which are incurred during the ordering of stock, like phone calls, transportation cost etc

2) Holding Cost : Storage costs, like rent of the building etc.

What is the Difference in Defective Goods and Spoiled Goods?

There is a fundamental difference between the two. A defective good is a good in which there is a manufacturing fault or defect, but this fault can be removed by applying additional cost called rectification cost.

Whereas in case of Spoiled goods, the goods have been spoiled [...]