Explain the terms assets and liabilities, Accounting Basics

Two friends, Joe and Bill, both have carpentry skills and decide to go into business as partners together ?tting kitchen cabinets. Joe's uncle has agreed to provide £20,000 of capital, in the form of a loan. They have come to you as a chartered accountant working in professional practice for advice.

(a) Explain the different types of partnership that Joe and Bill might form. Make a recommendation as to which type of partnership might be most appropriate for Joe and Bill to form.

(b) Drawing on your knowledge of stakeholder theory, what information would Joe's uncle need about the business affairs of Joe and Bill's partnership?

(c) Why would Joe and Bill come to you as an accountant for advice?

(d) After starting in business, Joe and Bill decide to engage a young of?ce manager/book-keeper, Luz, who has just started a book­ keeping course at the local college. Luz advises them that she will be applying the following accounting terms:

l the accruals concept

l substance over form

l the historical cost concept

However Luz's explanations are unclear. Joe has come to you for further help. Explain each concept in turn, and its importance in accounting.

(e) Joe has also asked you to explain the terms 'assets' and 'liabilities'. Explain each term, giving the characteristics and type of each. Give relevant examples to support your explanations.

(f) After the business has been running for a few months, Joe has decided to take a greater interest in the accounting system. He is confused as to why the books of account include a receivables ledger control account and a receivables ledger. Provide Joe with an explanation.

Posted Date: 3/8/2013 12:53:40 AM | Location : United States







Related Discussions:- Explain the terms assets and liabilities, Assignment Help, Ask Question on Explain the terms assets and liabilities, Get Answer, Expert's Help, Explain the terms assets and liabilities Discussions

Write discussion on Explain the terms assets and liabilities
Your posts are moderated
Related Questions
Exercise 5-3 Analyzing and recording merchandise transactions-both buyer and seller LO P1, P2 Santa Fe Company purchased merchandise for resale from Mesa Company with an invo

Assume in Balance sheet Furniture is given @ rs.1200000. and an adjustment tells that half of the building is used for residential purpose... then what is treatment in accounts?

How do you round up to one decimal point using percentages? Example 0.207 Thanks

Business is an activity performed with the only intention of earning profit. The activity may differ according to the scope and volume.

explain the separate set of books method for maintaining joint venture accounts

Q. Explain about Amortize? Amortize -- to charge a regular part of an expenditure over a fixed period of time. Forinstance if something cost $100 and is to be amortized over te

ACCOUNTING STANDARDS An Accounting Standard is a elected set of accounting policies or broad strategies concerning the principles and methods to be elected out of numerous subs

Q. Explain about Gross margin method? The steps in computing ending inventory under the gross margin method are - Estimate gross margin based on net sales using the similar

Q. Example of Periodic inventory procedure? Periodic inventory procedure Merchandising companies selling small unit value merchandise such like nuts and bolts Christmas cards n

What are the elements of accounting assets Assets are items with money value which are owned by a business. Some instance are: cash, accounts receivable (selling services or g