ACCOUNT ANALYSIS Definition

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ACCOUNT ANALYSIS is a way to measure cost behavior. It selects a volume-related cost driver and classifies each account from the accounting records as a fixed or variable cost. The cost accountant then looks at each cost account balance and estimates either the variable cost per unit of cost driver activity or the periodic fixed cost.

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SCOPE PARAGRAPH, in accounting, is the paragraph in the audit report that explains the scope of the engagement.

GROSS SURPLUS RATIO measures the margin on each dollar of operating revenue for the entity in question. The operating results before interest and depreciation, or gross surplus, are calculated as a percentage of total operating revenue. The gross surplus ratio shows the gross surplus as a percentage of the entitys turnover. If the percentage is high this could be interpreted as a sign that the entity is operating efficiently.

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