Also called the books of original entry The place where entries are entered for the first time. First instance recording They are part of single entry system, have to be converted to dual entry system A transaction goes to source …
Advantages of operating as a limited company Limited liability: The liability of the shareholder is limited to the amount they have invested in the company. Personal assets are safe Separate Legal Identity: A company is incorporated which means it can …
Clubs and societies have two different types of revenue streams. First, the membership fee. It can be paid, prepaid or accrued. Secondly, it can make money from canteens and other side businesses as well. Receipts and Payments Account It can …
Comparability By using international accounting standards, we can compare the statements prepared in two different areas and times to each other. Relevance The accounting system should provide information that can help the end users of the information to make crucial …
Main Ratios Margin The word margin means that you are taking something as a percentage of net sales. Remember, it’s net sales, which means sales – sales returns. If we simply say margin, then we assume it to be gross …
Basically, it means that the proper books and records of accounting are not kept by the person. As a result, information is not properly set. We need to get this information sorted to ensure that proper books, records and statements …
Direct Expense A direct expense is one that is directly related to the making of the good. It can be identified individually for each unit produced Includes direct labor cost and direct material cost. Direct material is the actual raw …
A partnership is between 2 and 20 people coming together to form an organization It is usually unincorporated, but can become a limited liability partnership In a limited liability partnership, there is at least 1 partner with unlimited liability. Advantages …
Advantages of Operating as Sole Trader Complete control over the business Not answerable to anyone. You are your own boss Can determine your own work hours, work conditions and timing All profits are for you. The sole trader does not …
Matching Also called accrual principle Revenues that are generated in a period should be matched to the expenditure incurred during that period to generate revenue. Therefore, this principle considers that payment itself is not important: when payment for an expense …