Archive | Accounting

The Features of Profit and Loss Account are as follows:

The preparation of Trading account fulfills the following objectives:

According to William Pickles “Revenue expenditure can be described as such outlay as is necessary for maintenance of earning capacity

Capital receipts consist of additional payment made to business by proprietors, loans taken and receipts from sale of a fixed assets of business…

According to William Pickles “Outlay resulting in the increase or acquisition of an asset or increase in the earning capacity of the business are capital expenses.”

Final accounts are the means of conveying to the management, owners and interested outsiders a concise picture of profitability and financial position of the business.

The suspense account is a temporary account in which the difference in trial balance is placed and is wiped off when the error are located and corrected.

These errors can be sub-divided as follows:

Normally four types of errors are not revealed by trial balance. Such errors are:

The limitations of trial balance are:

The advantages of trial balance are:

A trial balance is prepared with the following objectives.

A trial balance may be prepared according to either of the following two methods:

Features of Trial Balance:

According to double entry system, after recording all the transactions into journal and posting them into ledger and ascertaining their balances, the statement prepared to ascertain the…

Following is the distinction between trade and accommodation bill: