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O Levels Accounting Notes :: www.O-Alevel.com

O Levels Accounting Notes :: www.O-Alevel.com

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Published by oalevels
Download Here: www.o-alevel.com
Download Here: www.o-alevel.com

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Published by: oalevels on Mar 21, 2011
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10/26/2013

 
[PRINCIPLES OF AWWW.O-ALEV.CO.CCCCOUNTING]
 [Pick the date]
 
Principles of Accounting
A complete comprehensive guide for o-level accounting.
 
Edition
NAVEED AKRAM
Ex Institutes:
Aitchison College & NGS
Recent Institutes:
LACAS & LGS
201
2
 
 
 
(www.o-alevel.co.cc) Page 2
Title: “
Principles of Accounting O’ Levels Notes”
Author:
Sir Naveed Akram
Published by:Distributed by
: 
All Rights Reserved
No part of this book can be reproduced, stored in a retrievalsystem or transmitted, in any form or by any means, electronic,mechanical, photocopying, recording or otherwise without the
prior permission of the publisher 
 
 
(www.o-alevel.co.cc) Page 4
Basic Definitions
Capital:
Initial and subsequent investment with which the business is started and expanded respectively
Example:
Mr. A started a business with $50,000 and after two years a further amount of $80,000 was injected into the business for expansion. So $50,000 is the initial investment and $80,000 subsequent investment, both are capitalso capital for Mr. A would be $130,000.
Separate Entity Concept:
Its states that the affairs of the business are to be treated as being quite separate from the non business activitiesof the owner. In short owner starts the business, works for the business but still cannot use businessmoney/goods for his/her personal purposes, if he/she does it, these are said to be drawings. The benefit of theowner is the profit that he/she earns from the business and the amount of salary that he/she takes for working for the business.
Drawings:
Amounts or goods taken by the owner/proprietor for his/her personal use
Assets:
 Things owned by a business are known as assetsThere are two types of assets1.
 
 Non Current Assets / Fixed Assets2.
 
Current Assets
Non Current Assets / Fixed Assets:
 Non Current Assets have a life of more than one year.
Examples
 
Premises
 
Land & Building
 
Motor Vehicles
 
Fixtures & Fittings
 
Office Equipment
 
Plant & Machinery etc etc,
Current Assets
Current Assets have a life of less than a year 
Examples:
 
Stock / Inventories (Unsold Goods are known as Inventories)
 
Trade Receivables (Who owe money to the business)
 
Other Receivables / Prepaid Expenses
 
Cash at Bank 
 
Cash in hand 
Liabilities
Amounts payable by the businessThere are two types of liabilities1.
 
Current Liabilities2.
 
Long term Liabilities / Non Current Liabilities

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