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

WHERE DO I START? I have two questions QUESTION1 On March 31, 2010, our company, Harry Yolo, purchased a 100,000. 8% 10-year bond for 102 from Fish Gimp, due in 6 years & 8 months

Why is a provision for depreciation made in the financial statements? A to charge the cost of non-current assets against profits B to make a provision for repairs C to mak

A company pays rates annually/yearly in advance on 1 April every year. $4000 is paid by them on 1 April 2009 and $4800 on 1 April year 2010. The company's accounting year end is 31

Q. Comparability in accounting information? When comparability exists reported similarities and differences in financial information are real and not the result of differing ac

what are the stages of operational research


Q. Example of retail inventory method? In Exhibit we display the retail inventory method. In the exhibit the costs (USD 22000) as well as retail (USD 40000) amounts for beginni

Q. How to determine inventory cost? To place the proper evaluation on inventory a business must answer the question: Which costs must be included in inventory cost? After that

#question.prepare the required adjusting entry for September 30, 2009