Everything you wanted to Know about Basic Accounting but were afraid to ask
Reserves 1. It is created by debiting the profit and loss appropriation account. 2. It is created to meet an unknown liability, or to strengthen the financial position of the company or for equalization of dividends etc. 3. A reserve is created only when there is profit in the business. 4. It can be distributed [...]
How Secret reserve is created? A secret reserve is created by the following methods: 1. By under valuation of assets much below their cost or market value, such as investment, stock in trade, etc. 2. By not writing up the value of an asset, the price of which has permanently gone up. 3. By creating [...]
In this series of articles we will also discuss: 1. Balance Sheet Explained 2. Trading and Profit and Loss Account 3. Adjustments of Final Accounts Previously while discussing the basic accounting equation it was noted that A – L = P, where A represents assets (property and possession) owned by the business; L represents liabilities [...]
A balance sheet may be defined as “a statement prepared with a view to measure the exact financial position of a business on a certain date. “It is prepared from the trial balance after all the balances of nominal accounts are transferred to trading and profit and loss account and corresponding accounts in the ledger [...]
The usual subsidiary books maintained under the double entry system of book-keeping are also maintained under the single entry system, but the postings are made from these subsidiary books of those entries which affect personal accounts. Real and nominal accounts are not maintained under this system. Since only one aspect of every transaction is usually [...]
Explanation of Certain items of Profit and Loss Account 1. Salaries Salaries are paid for the services of employees and are debited to profit and loss ac- count being indirect expense. If any salary has been paid to proprietor or partners, it should be shown separately because it requires special treatment at the time of [...]
Many new businesses owners shun budgeting because they are unsure about what sort of cost to budget for. This article will shed some light on the type of cost a new daycare business owner is likely to incur. Youve drawn up your business plan, decided on your marketing plan and even detailed your operations plan. [...]
A commercial mortgage is similar to a normal house mortgage, except it is taken out by a business and used for a business. The business can be a Ltd company, plc or a sole trader. Buy to let also comes under commercial mortgages as do small corner shops and salons. The main difference of commercial [...]
Introduction. Accountants come in all shapes and sizes. Some work with businesses, some work with individuals. Some do taxes, while others never do taxes. Many are CPA’s, but you don’t have to be a CPA to be a good tax accountant. Some are bookkeepers with little or no formal training. Some are authorized to work [...]
With the advancement in the technology, one can notice that it has catered to many peoples business needs and lives in different ways. Link Building is one of the important aspects of an online business. Your business will work with a high speed if you adopt such techniques and methods that can make your business [...]