Goodwill in Partnership Accounts From the accountants’ viewpoint, goodwill, in the sense of attracting custom, has little significance unless it has a saleable value. To the accountant, therefore, goodwill may be said to be that elements arising from the reputation, connection or other advantages possessed by a business which enables it to earn grater profits than the return normally to be expected...
Saturday, July 31, 2010
Wednesday, July 28, 2010
(202)-PARTNERS' ACCOUNTS AND ALLOCATION OF PROFITS
Partners’ Accounts and Allocation of Profits Capital and current accounts The partnership agreement provides for a fixed amount of capital to be contributed by each partner, it is preferable for the amounts therefore to be credited to the respective partners’ capital accounts, and for partners’ drawings, salaries, interests on capital and shares of profits to be dealt with the current account. This...
Monday, July 26, 2010
(201)-PARTNERSHIP ACCOUNTS
Partnership Accounts Introduction Partnership is defined by the partnership act as “the relation which subsists between persons carrying on a business in common with a view of profit”. The participation in profits is not, however, of itself alone conclusive evidence of the existence of a partnership, since the relationship rests upon mutual intention. As the essence of partnership is mutual agreement,...
Saturday, July 24, 2010
(200)-INCOME AND EXPENDITURE ACCOUNTS
Income and Expenditure Accounts An income and expenditure account is the profit and loss account of a non-trading concern. It contains only revenue items, being debited with all expenditure, and credited with all income of a period, weather or not it has actually being paid or received within that period. The final balance of and income and expenditure account represents the excess of income over...
(199)-INCOMPLETE RECORDS
Incomplete Records Incomplete records are intended to signify any accounting records which fall short of complete double entry. There are varying degrees of incompleteness and the procedure to be adopted in order to prepare final accounts must depend upon the nature of the records and data available.Approach to be adopted In order to prepare a profit and loss account and a balance sheet, the following...
Friday, July 23, 2010
(198)-FIXED ASSETS AND DATABASES
Fixed Assets and Databases An organization, especially a large one, may possess a large quantity of fixed assets. Before computerization these would have been kept in a manual fixed asset register. A database enables this fixed asset register to be stored in an electronic form. A database file for fixed assets might contain most or all of the following categories of information. Code number to give...
Monday, July 19, 2010
(197)-DATABASES
Databases A database may be described as a “pool” of data, which can be used by any number of applications. Its use is not restricting to the accounts department. A stricter definition is provided in the computer terminology of the CIMA. “Frequently a much abused term, in its strict sense a database...
Friday, July 16, 2010
(196)-NOMINAL LEDGER IN COMPUTERIZED SYSTEM
Nominal Ledger in Computerized System The nominal ledger or general ledger is an accounting record which summarizes the financial affairs of a business. It is the nucleus of an accounting system. It contains details of asset, liabilities and capital, income and expenditure and so profit or loss. It consists of a large number of different accounts, each account having its own purpose or “name” and...
Tuesday, July 13, 2010
(195)-PURCHASED LEDGER IN COMPUTERIZED SYSTEM
Purchase Ledger in Computerized System A computerized purchase ledger will certainly be expected to keep the purchase ledger up-to-date, and also it should be able to output various reports requested by the user. In fact, a computerized purchase ledger is much the same as a computerized sales ledger; expect that it is a sort of mirror image as it deals with purchases rather than sales.Input to a purchase...
Saturday, July 3, 2010
(194)-OUTPUTS FROM A SALES LEDGER SYSTEM
Outputs from a Sales Ledger System Typical outputs in a computerized sales ledger are as follows. Day book listing. A list of all transactions posted each day. This provides an audit trail i.e. it is information which the auditors of the business can use when carrying out their work. Batch and control totals will be included in the listing. Invoices. (if the package is one which is expected to produce...
Thursday, July 1, 2010
(193)-PROCESS IN A SALES LEDGER SYSTEM
Process in a Sales Ledger SystemThe primary action involved in updating the sales ledger is modifying the amount outstanding on the customer’s account. How the amount is modified depends on what data is being input.When processing starts, the balance on an account is called the brought forward balance....
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