QUEENS’ COLLEGE DISTANCE EDUCATION DIVISION

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ASSIGNMENT

ON

ADVANCE ACCOUNTING II

Date: - _____________

Total Weight: - 30 %

Name: - _____________________________________________ ID NO: - ________________

Department: -_______________ Study center: -_____________ Entry year: - __________

Program: DEGREE

This is the only assignment of this course.

This assignment is to be completed and submitted to the office of your center. Do not
attempt the assignment until you are certain that you have understood the units it covers and
have revised your self-test exercises and learning activities, and other necessary references.

If you have any question about the units and activities, state the item/s clearly on a
separate sheet of paper and attach to your assignment paper.

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 1. List and Explain about accounts that are used in relation to principal?

. 1. assets  are resources owned and used by the business

.  Resources are items of value needed by the business. No business can operate
without resources. The resources should be owned by the business. Personal assets of
the owners should not be included in the assets recorded by the business. The
resources should be used for business purposes only.

the second 2. liabilities  refer to debts of the business to others

 debts of the business pertain to the amount owed by the business only. Others may
refer to a bank, a supplier of products, or a supplier of service

3. owner's equity

 the owner's interest in the business  interest mean ownership ASSETS

2. Mention briefly about the characters tics of partnership?

The basic characteristics of partnership include and are discussed as follows:

Ease of Formation - only an oral agreement is necessary to create a legally binding partnership.
It may also be created by written contract between persons, or may be implied by their conduct. But
incorporation requires large cost and the filing of a formal application.
Limited Life - a partnership may be ended by the death, retirement, bankruptcy, or incapacity of
a partner. The admission of a new partner to the partnership legally ends the former partnership and
establishes a new one.
Mutual Agency - each partner has the authority to act for the partnership and to enter into
contract on its behalf. But, acts beyond the normal scope of business operations do not bind the
partnership unless specific authority has been given to the partner to enter into such transactions.
Unlimited Liability - the liability is not limited to the business. If the partnership is unable to
pay its liability, the partners are personally liable. Creditors having difficulty in collecting cash on
matured liability from the partnership will be likely to turn to those partners who have other
financial resources.
Co-ownership of partnership assets and Earnings - when individuals invest assets in a
partnership, they retain no claim to those specific assets but acquire an ownership equity in all

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assets of the partnership. That is, every member of a partnership has ownership equity in
partnership.
Participation in Earnings - participation in earnings and losses is one of the tests of the
existence of a partnership.
Better resources and skills - resources and skills contributed by two or more persons are better
that those contributed a single person
Single Taxation – a partnership is taxed only once

3. List down the process of partnership liquidation?

The procedures involved in terminating and liquidating a partnership are basically

mechanical. Partnership assets are converted into cash that is used to pay business
obligations as well as liquidation expenses. Any remaining assets are then distributed
to individual partners based on their final capital balances. As no further ledger
accounts exist, the partnership’s books are permanently closed. If each partner has a
large enough capital balance to absorb all liquidation losses, the accountant
experiences little difficulty in recording this series of transaction. Liquidation is
classified into two based on the timing of settlement of creditors and partners account
balances:
Final Stage Liquidation – payments are made to creditors and partners after all
non-cash assets are realized
Installment Liquidation – payments are made to creditors and partners in
accordance with some reasonable sequence as non-cash assets are realized.

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 4. What is the difference b/n net income and net loss?

Net Income Also referred to as “net profit,” “net earnings,” or simply “profit,” a
company’s net income measures the company’s profitability. Net income is the
opposite of a net loss, which is when a business loses money. Next to revenue, net
income is the most important number in accounting.

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.

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5. HUSSEN and HASSEN established a partnership named HH Limited Liability
Partnership. HUSSEN invested Br 320,000 on January 1, 2004 and an additional
investment of Br 100,000 on April 1, 2004. He also withdrew Br 70,000 on July 1, 2004.
HASSEN invested Br 480,000 on January 1, 2004 and withdrew 100,000 on July 1,
2004 and made an additional investment of Br 40,000 on October 1, 2004. Determine
the share of net income that must be allocated to the two partners assuming a total net
income of Br 200,000:
A. based on the original capital investment
B. Average capital account balances.