Rules regarding preparation of final accounts

While preparing the final accounts following rules should be followed:

If the amount of debit balance account is recoverable to the business, it is an asset but if the amount can not be recovered in any way in that case it represents either expenditure or loss: Building, furniture, machinery have debit balances and money can be received by realizing them. Salary, rent, wages etc. also have debit balance but these cannot be realized in cash because money has already been paid to the third parties against them. Thus building, machinery, furniture etc. are recorded on the asset side of balance sheet and salary, rent and wages etc. appear on the debit side of trading or profit and loss account.

fucked up rules of foster care… anyone? | I Was A Foster Kid

Image Source:

If the amount is payable to outsiders a credit balance account, it is a liability and is shown in the balance sheet. If the amount is not payable to any one against a credit balance account in that case it is an income of business and is to be recorded in trading and profit and loss account: Bank overdraft, creditors and loans etc. all have credit balances and business is to pay them out. Discount, dividend, rent etc. if they have credit balances are not payable by business to balances are not payable by business to outsiders because the amount received are not to be paid back. Thus overdraft etc. is a liability and discount and rent etc. are incomes.

Kata Mutiara Kata Kata Mutiara Kata Kata Lucu Kata Mutiara Makanan Sehat Resep Masakan Kata Motivasi obat perangsang wanita