Bad Debts And Provision For Doubtful Debts

BAD DEBTS AND PROVISION FOR DOUBTFUL DEBTS   Bad debts The amount of the debtors which cannot be recovered is known as bad debt. At the end the accounting year, the amount of bad debt is shown as an expense in the profit & loss account and deducted from the debtors. The double entry for recording the bad debt is:                                ...

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Company Accounts

COMPANY ACCOUNTS Introduction Company account is a fiinancial information that a company is required to produce at the end of every year, including details of its profits or losses.   The capital of a limited company is divided into shares. A person can become the   member of a company if he buys a share, then he is known as the shareholder. If the shareholder...

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Manufacturing Accounts

INTRODUCTION TO MANUFACTURING ACCOUNTS Manufacturing of goods is the transformation of raw materials into finished goods. A manufacturing organization will acquire raw materials, engage labour and other inputs necessary to change the raw materials into finished goods. Manufacturing accounts are prepared to ascertain the cost of goods manufactured during the financial...

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Concept Of Audit Program

Concept Of Audit Program After selecting senior and junior staffs, allocating the jobs to them, mentioning when to start, how to do the work etc., an auditor prepares a plan. This plan is called audit program. An auditor needs to include all the procedures in written form, objectives of each sector and all directions which are to be given to the staff members which...

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Partial Audit: Objectives, Advantages and Disadvantages

PARTIAL AUDIT Introduction A partial audit is an audit that is conducted considering the particular area of accounting. Under partial audit, audit of the whole account is not conducted. Only the audit of the particular area where the owner thinks it is essential to conduct an audit will be conducted. Normally, business transaction is concerned with cash, debtor,...

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Concept Of Single Entry System And Incomplete Records

SINGLE ENTRY AND INCOMPLETE RECORDS  Introduction Single entry system is an incomplete way of recording financial transactions. This system does not record two aspects (debit and credit) or accounts of all the financial transactions. Also, this system has no established or fixed set of rules in recording the financial transactions of the busines...

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Concept Of Delegation Of Authority

DELEGATION OF AUTHORITY Delegation is the process of assigning specific works to individuals within the organization and giving them the right to perform those works. Delegation of authority is, of course, one of the most significant concepts in management practices that affects managerial functions. Management is the art of getting things done through others and delegation means getting things done through the subordinate...

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Materials Control: Definition, Objectives, Needs and Essentials

Material Control The systematic control over the purchase, store and consumption of materials is what we refer to as Material control. It helps in maintaining a regular and very timely supply of materials by avoiding both over and under-stocking. It ensures that the right quantity and quality of materials is available to the organization at the right tim...

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Financial Statement Analysis: Its Objectives, Methods, Users and Limitations.

Concept Of Financial Statement Analysis Financial statement analysis is an analysis which highlights the essential relationship in the financial statements. Normally, financial statement analysis focuses on the evaluation of past performances of the business enterprise in terms of profitability, liquidity, operational efficiency and growth potentiality. Financial statements analysis, however, includes the methods used in assessing as well as interpreting...

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Hire Purchase Accounting, How It Differs From Installments system And Its Accounting Entries

Hire Purchase Accounting Introduction Buying and selling of goods as for the system of hire purchase is different from the cash sales and credit sales. As for cash sales, the buyer pays a sum to the seller and the ownership is immediately passed along with the goods while as for credit sale, the payment is made in future. In the two cases the ownership of goods pass on the buyer....

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Taxation Part 3

If you missed the first two parts, you can read them here by clicking Part 1 and Part 2. TYPES OF TAX There are two major types of tax. These are direct tax and indirect tax. DIRECT TAX Direct tax as the simply implies refers to the type of tax imposed directly on income of individuals or organizations by the government or its agencies. Such income would include wages, salaries, profits, rents and interests. The burden of direct tax is borne by...

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