Archive about 'Bookkeeping to Trial Balance'

Types Of Discounts And Accounting Treatment For Discount Allowed and Discount Received

This article explains the difference between Trade and Cash discounts.
Cash discount, which are shown as Discount Allowed and Discount Received with its accounting treatment.

Trade Discount

A manufacturer or trade normally issue a price list of their products at which the customers usually have to pay.
The allowance given from the list price is called trade discount.
When a [...]

Accounting Treatment Of Revenues Received In Advance

Prepayments are expenses paid in advance and the unexpired up is accounted as current assets in the Balance Sheet.
Vice versa, revenues received in advance are payment received from customers for work not yet done or goods to be delivered at some future date.
So how do we treat revenues received in advance?

Revenues received in advance:

Are money [...]

Petty Cash And The Imprest Cash Float System

PETTY CASH AND THE IMPREST CASH FLOAT SYSTEM

Petty Cash
·     Many business normally keeps a small amount of money to meet some small cash disbursements like payment of postage, medical claims, staff traveling claims. As the disbursements are for petty item hence the name petty cash

Petty Cash Imprest System
Salient features:
·      Under this Imprest system, the amount [...]

Dual Aspect Concept/Double Entry Methodology

DUAL ASPECT CONCEPT

This dual aspect concept is also called Double Entry Methodology

 

The key points are All transactions have two(2) dimensions

                                and
this follows from the basic accounting equation which is:

ASSETS= LIABILITIES + OWNERS’ EQUITY

Assets are the resources owned by a business
Liabilities are the rights of the creditors, which represent debts of the business
Owners Equity represents the [...]