Professional Documents
Culture Documents
Theory For Accounts
Theory For Accounts
It maintains personal accounts and cash book, while real and nominal accounts are not maintained.
It depends on original documents, e., receipts/vouchers, together necessary data.
There is no uniformity as the system which differs from firm to firm.
There are no fixed norms to follow.
It is a partnership term where the capitals of partners are fluctuating, all adjustments with
regards to the interest on capitals, interest on drawings, partners salaries etc. are passed
through the capital accounts of the partners.
3) Write the journal entry for transferring profit on revaluation account at the time of
admission of a partner.
Realization account is prepared at the time of dissolution of a firm to know the profit/loss at the time of
dissolution of the firm. All the assets except cash/bank are transferred to the debit side of realization
account.
Forfeiture of share means cancellation of the rights of the shareholder on the shares held by him for
the non – payment of allotment money or call money or both, on such shares.
6) Under which headings will you show the following items in company’s Balance Sheet.
a) 6% Debentures – It is shown as Long – Term borrowings under the Liabilities side of the Balance
sheet.
b) Goodwill - It is shown as Intangible Asset under the Assets side of the Balance sheet.
7) Write the formula for calculating the amount of depreciation under the original cost method if
percentage is not given.
If the percentage of depreciation is not given, the annual depreciation amount can be calculated by
using the following formula.
Expenditure incurred in the ordinary conduct and administration of business, i.e. rent, , carriage on
saleable goods, salaries, wages manufacturing expenses, commission, legal expenses, insurance,
advertisement, free samples, postage, printing charges etc.
Payroll Accounting is the function of calculating and distributing wages, salaries, and withholdings
to employees and certain agencies. It is generally done through different documents such as time
sheets, paychecks, and a payroll ledger. Payroll Accounting also involves the process of issuing reports to
upper management, so that they are able to make informed decisions about the company’s labor-cost
data.