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You have learned about the business and its proprietor is reacted as separate entities. It implies that separate accounts must be kept in the ledger for recording transactions among the proprietor and the business. Generally, two accounts that are: Capital Account and Drawings Account are kept for this purpose. Anything the proprietor brings in the business is termed as his capital and credited to his Capital Account. As the same, when he withdraws cash from the business for his personal utilize, he is to be debited along with the amount withdrawn through him. That debit is specified to his Drawings Account. Drawings Account is also debited while the proprietor acquires goods from business for domestic utilize. Note here the proprietor can be charged only through the cost of goods taken and not its selling price. In the cost of these goods are credited to the Purchases Account as this is which it was purchased for him and should therefore be excluded from the purchases for the business
journal entry and balance sheet for acquisition
Dear Sir, I am an accountant working in a company with limited liability (WLL), one of the partners (A) will withdraw from our company. One of the existing partner (B) of the comp
Inventory Within a trading firm, inventory is merchandise held for sale to customers into the ordinary course of business. In condition of manufacturing firms, inventory would
2. Now assume that you have been asked how to account for the destroyed drilling operation in the Gulf of Mexico in terms of the destroyed rig and lost natural resources. For the p
The main function of accounting is to accumulate accounting data so as to calculate the profit and loss made through the business firm throughout and also to KNOW the financial pos
Hi, I work at a non-profit that recently received a $250,000 stock donation which is payment for a $1M pledge. The donor has written in an e-mail that he would like to give us th
A company values its loose tools for inclusion in its balance sheet. The tools are not extremely valuable and the company uses estimating while valuing them. Which type of accou
Governing Documents - Official legal documents which dictate how an entity is operated. Governing documents of a CORPORATION include ARTICLES OF INCORPORATION and BYLAWS; a PARTNER
1. What is a bank? 2. What bank overdraft?
procedure followed in govt.system of accounting in india
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