Notes

Government Budgeting Procedure Meaning of a Budget Define a budget : A budget is a set of interlinked plans that quantitatively describe an entity’s projected future operations. A budget is used as a yardstick against which to measure actual operating results,…

Accounting of Non-Profit Making Organizations Preparation of Statement of Affairs Prepare statements of affairs Certainly, proper accounting is essential for non-trading institutions. These concerns maintain, generally, a cash book and later they prepare a summary of cash transactions appearing in…

Incomplete Records Statements Showing Profit or Loss From Incomplete Records Draw up statements to show profit or loss from incomplete records Some times, businesses, especially small businesses do not maintain a full set of double entry records. Consequently, no trial…

Control Account Control Account from Subsidiary Records Construct control account from subsidiary records Definition: A control account is a summary-level account in the general ledger. This account contains aggregated totals for transactions that are individually stored in subsidiary-level ledger accounts. Control…

Manufacturing Account Difference in Accounting for Stocks between Manufacturing Companies and Merchandising Companies Explain the difference in accounting for stocks between manufacturing companies and merchandising companies The businesses which produce and sell the items prepare the following accounts at the…

Balance Sheet (Classified) Meaning of Each Asset and Liability Classification Appearing on a Balance Sheet Define each asset and liability classification appearing on a balance sheet A classified balance sheet presents information about an entity’s assets, liabilities, and shareholders’ equity…

Financial Statements General Purpose Financial Statements Describe general purpose financial statements Financial Statements Definition: Financial statements are a collection of reports about an organization’s financial results, financial condition, and cash flows. They are useful for the following reasons: The standard contents…

Bad Debts The Bad Debts Account Show the bad debts account What are bad debts? The term bad debts usually refers to accounts receivable (or trade accounts receivable) that will not be collected. However, bad debts can also refer to notes receivable…

Depreciation Cost of a Fixed Asset Determine the cost of a fixed asset Depreciation is the systematic reduction in the recorded cost of a fixed asset. Examples of fixed assets that can be depreciated are buildings, furniture, leasehold improvements, and office…

Capital Expenditure and Revenue Expenditure Meaning of Capital Expenditure and Revenue Expenditure Give the meaning of capital expenditure and revenue expenditure Capital Expenditure Payments made in cash or cash equivalents over a period of more than one year. Capital expenditures…