Principal Account means the interest bearing account described as such in the name of the

Issuer with the Account Bank into which Principal Proceeds are to be paid.

What is a principal for own account?

The term principal order refers to an order in which a broker-dealer buys or sells for its
own account as opposed to carrying out trades for the brokerage's clients. Principal
orders are done at the broker-dealer's own risk. The broker-dealer must provide
notification to the exchange where the trade.
It’s essential for any business to have basic accounting principles in
mind to ensure the most accurate financial position. Your clients and
stakeholders maintain trust within your company, so recording reliable
and certified information is key. What are the 5 basic principles of
accounting? To better understand the principles, let’s take a look at
what they are.
1. Revenue Recognition Principle
When you are recording information about your business, you need to
consider the revenue recognition principle. This is the period of time
when revenues are recognized through the income statement of
your company. In order for your revenues to be recognized in the
period that the services were provided if you are on the accrual basis,
If you are on the cash basis, then the revenues need to be recognized
in the period the cash was received.
2. Cost Principle
Recording your assets when you purchase a product or service helps
keep your business’s expenses orderly. It’s important to record the
acquisition price of anything you spend money on and properly record
depreciation for those assets.
3. Matching Principle
Expenses should be matched to the revenues recognized in the same
accounting period and be recorded in the period the expense was
incurred. If there is a period of time where revenue was recognized on
sold products or services, then the cost of those things should also be
recognized.
4. Full Disclosure Principle
The information on financial statements should be complete so that
nothing is misleading. With this intention, important partners or clients
will be aware of relevant information concerning your company.
5. Objectivity Principle
The accounting data should consistently stay accurate and be free of
personal opinions. Make sure the data is also supported by evidence
that can include vouchers, receipts, and invoices. Having an objective
viewpoint, in this case, helps rely on financial results. For example,
your viewpoint may not be objective if you once worked for the same
company that you are now an auditor for because your relationship
with this client might skew your work.
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Characteristics of a Partnership
A partnership is an unincorporated association of two or more
individuals to carry on a business for profit. Many small businesses,
including retail, service, and professional practitioners, are organized
as partnerships.

A partnership agreement may be oral or written. However, to avoid

misunderstandings, the partnership agreement should be in writing.
The agreement should identify the partners; their respective business‐
related duties and responsibilities; how income will be shared; the
criteria for additional investments and withdrawals; and the guidelines
for adding partners, the withdrawal of a partner, and liquidation of the
partnership. For income tax purposes, the partnership files an
information return only. Each partner shares in the net income or loss
of the partnership and includes this amount on his/her own tax return.

Limited life

The life of a partnership may be established as a certain number of

years by the agreement. If no such agreement is made, the death,
inability to carry out specific responsibilities, bankruptcy, or the desire
of a partner to withdraw automatically terminates the partnership.
Every time a partner withdraws or is added, a new partnership
agreement is required if the business will continue to operate as a
partnership. With proper provisions, the partnership's business may
continue and the termination or withdrawal of the partnership will be a
documentation issue that does not impact ongoing operations of the
partnership.

Mutual agency

In a partnership, the partners are agents for the partnership. As such,

one partner may legally bind the partnership to a contract or
agreement that appears to be in line with the partnership's operations.
As most partnerships create unlimited liability for its partners, it is
important to know something about potential partners before
beginning a partnership. Although partners may limit a partner's ability
to enter into contracts on the company's behalf, this limit only applies
if the third party entering into the contract is aware of the limitation. It
is the partners' responsibility to notify third parties that a particular
partner is limited in his or her ability to enter into contracts.

Unlimited liability

Partners may be called on to use their personal assets to satisfy

partnership debts when the partnership cannot meet its obligations. If
one partner does not have sufficient assets to meet his/her share of
the partnership's debt, the other partners can be held individually
liable by the creditor requiring payment. A partnership in which all
partners are individually liable is called a general partnership.
A limited partnership has two classes of partners and is often used
when investors will not be actively involved in the business and do not
want to risk their personal assets. A limited partnership must include
at least one general partner who maintains unlimited liability. The
liability of other partners is limited to the amount of their investments.
Therefore, they are called limited partners. A limited partnership
usually has LLP in its name.

Ease of formation

Other than registration of the business, a partnership has few

requirements to be formed.

Transfer of ownership

Although it is relatively easy to dissolve a partnership, the transfer of

ownership, whether to a new or existing partner, requires approval of
the remaining partners.

Management structure and operations

In most partnerships, the partners are involved in operating the

business. Their regular involvement makes critical decisions easier as
formal meetings are not required to get approval before action can be
taken. If the partners agree on a change in strategy or structure, or
approve a purchase of needed equipment, no additional approvals are
needed.

Relative Lack of regulation

Most governmental regulations and reporting requirements are written

for corporations. Although the number of sole proprietors and
partnerships exceeds the number of corporations, the level of sales
and profits generated by corporations are much greater.

Number of partners

The informality of decision making in a partnership tends to work well

with a small number of partners. Having a large number of partners,
particularly if all are involved in operating the business, can make
decisions much more difficult.

The process of liquidating a partnership involves four steps:

1. Adjust and close accounts and prepare a trial balance. When the
ordinary business activities are discontinued, the accounts should be adjusted
and closed in accordance with the customary procedures for summarizing
financial activity. A post-closing trial balance is then prepared, containing only
assets, liabilities, and owner's equity.
2. Sale of non-cash assets and allocation of gain/loss on realization.
Once the operation of the business is terminated, the non-cash assets must be
converted to cash through sale. This process, known as realization, can occur in a
single transaction or on a piecemeal basis. If the cash proceeds from the sale are
greater than the book value of the assets, the difference is a gain on realization.
This gain is then allocated among the partners according to their income-sharing
ratios.
3. Payment of partnership liabilities. After the non-cash assets are sold, the
available cash is used to pay the partnership's creditors before any cash is
distributed to the partners. The accounting entry for this process debits the
liability accounts and credits cash.
4. Distribution of remaining cash to partners. After all debt claims have
been settled, the remaining cash is distributed to the partners according to their
capital balances. Note that this distribution is not based on the partners' income-
sharing ratios.
4
Revenues and expenses are part of the income statement, and at the bottom line, you will find
the net income or net loss. When you subtract the expenses and costs from revenue, the result
will be either positive or negative. A positive result is called net income, and a negative result is
a net loss.

A net loss occurs when a company's expenses are higher than its total revenue. This can be a
sign of problems that need to be addressed. It can, however, also happen because a company
has a (relatively) short-term need for more income than it earns.

Net loss, or net operating loss, is when an organization's total

expenses exceed its total income or revenue for a specific period. Net
loss is the opposite of net income, in which income or revenue
exceeds expenses and results in a profit

Net income, sometimes called net earnings or the bottom

line, is the profit available to a company’s shareholders
after all business expenses, including taxes, have been
paid. You’ll find your net income in the last line of the
income statement (one of the three financial statements).

1. HUSSEN's capital balance:

- Initial investment on January 1, 2004: Br 320,000
- Additional investment on April 1, 2004: Br 100,000
- Withdrawal on July 1, 2004: Br 70,000
Starting with HUSSEN's initial investment:
320,000 - 70,000 = 250,000
2. HASSEN's capital balance:
- Initial investment on January 1, 2004: Br 480,000
- Withdrawal on July 1, 2004: Br 100,000
- Additional investment on October 1, 2004: Br 40,000
Starting with HASSEN's initial investment:
480,000 - 100,000 = 380,000
Adding the additional investment:
380,000 + 40,000 = 420,000
Now, we need to calculate the total capital of the partnership
by summing up the capital balances of both partners:
Total capital:
250,000 + 420,000 = 670,000
Next, we can determine the share of net income for each
partner based on their respective capital balances. This share
is calculated proportionally to the partner's capital investment:
HUSSEN's share of net income:
(250,000 / 670,000) * 200,000 = Br 74,626.87 (approximately)
HASSEN's share of net income:
(420,000 / 670,000) * 200,000 = Br 125,373.13 (approximately)
Therefore, HUSSEN's share of net income is approximately Br
74,626.87, and HASSEN's share of net income is approximately
Br 125,373.13, based on their original capital investment.