Sometimes, a bad debt which has already been written off might be unexpectedly paid by the delinquent debtor. If the bad debt is written off as bad in one accounting period and is subsequently paid in a later accounting period: The amount paid should be recorded as ADDITIONAL INCOME in the Income statement of the … Read more
Bonus shares are:- Shares issued to existing shareholders by means of capitalizing reserves ie using reserves to increase the number of issued shares. In No money or cash passes at all but the shareholders do receive share certificates Often the arrangement is known as paper or scrip issue Provided all legal requirements are complied with … Read more
Many consider the disadvantages of having single entry system of accounting, below are some practical points on the merits/benefits of having such “incomplete” system:- Simple to maintain even without any bookkeeping/accounting knowledge Flexible as it can be maintain based on the individual needs or requirements of the owner of the business Economical as it involves … Read more
The Single Entry System is NOT a separate system of bookkeeping but an INCOMPLETE form of double entry system. Also alternatively called accounting of transactions from incomplete records. Under this system, either one aspect of the transaction may be recorded or both aspects may be recorded or no record may be made of a transaction.
Outstanding creditors including government dues Sundry creditors Bills payable Loan Capital
Earlier article deals with individual classification of assets in a balance sheet. Below assets are classified in accordance to urgency of liquidity: Cash in hand Cash at bank Government securities Bills receivables Sundry debtors Prepaid expenses Stock of finished goods Work –in-progress Raw materials Machinery Furniture Building Patents Goodwill
Very often in a manufacturing concern, there are goods which are in partly manufactured state at the end of the accounting period. Such goods which are known as work-in-progress are usually valued according to the amount of materials, labour and expenses which have so far been incurred. To find or compute the cost of production … Read more
Cash Sales: If the sale is for cash, it occurs when the goods or services are given in exchange for an immediate payment whether in term of notes, coins, cheque or credit card Credit Sales: If the sale is on credit, the business will issue sales invoices for the goods or services supplied showing details … Read more
The dual purpose of a physical stock take is to ensure:- the physical existence and the value of the stocks owned by the firm at the Balance Sheet Date. Note that stocks or inventories comprise raw material, work-in-progress or completed product. Any discrepancies between the book stocks and physical count must be investigated and reconciled … Read more
Earlier article on discount allowed and discount received refers. Accounting Double Entry for Discount Allowed: Debit : Discount Allowed Account Credit: Debtor’s Account Subsequently, discount allowed will be credited and charged to the Profit & Loss Account/Income statement. Discount Received: Debit: Creditor’s Account Credit: Discount Received Account Subsequently, discount received will be debited and the … Read more