how-to-solve-difficult-adjustments-and-journal-entries-in-financial-accounts-1223309458147051-9

How-to-solve-difficult-adjustments-and-journal-entries-in-financial-accounts-1223309458147051-9

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How to solve difficult adjustments in Financial Accounts By Professors Augustin Amaladas and Shanthi Augustin M.Com(Loyola, Chennai)., AICWA These slides Are prepared Only to Clarify major Doubts To students And staff. Only Difficult Adjustments are explained Exclusively to CA ICWA,CS Students or others who wants to learn Accounts thoroughly CA CPT, ICWA entrance,ACS entrance students should read this Alternative work is rest
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Why does Equity shares and fixed assets appear first in the Balance sheet The balance sheet is prepared in order. Left hand side liabilities and right hand side Assets. If business comes to an end the liability which is paid last is share capital. The last asset which is sold out will be fixed asset. Among fixed assets goodwill(good name) is sold out last.No one wants to sell one’s name unless everything is lost.The order of arrangement is known as order of permanence. What is the Order of Liquidity?
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Order of Liquidity? The liability which is disposed off first comes first in the balance sheet. The asset which is used to pay liability first appears first in the assets side. Therefore cash appears first in the balance sheet asset side. And Creditors should appear in the liability side first. The above two orders are known as marshalling
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Income tax paid by sole proprietor and partnership business-Journal entry? Income tax does not recognise sole proprietor or firm as a unit but the individuals who run the organisation are recognised. Income tax is a direct tax. Direct taxes such as Income tax, wealth tax are to be paid by the individual who runs such organisation.It is a personal liability even such incomes from business. If business money is used for personal use of paying tax, then such payment to be treated as drawings. Journal entry: Debit drawings and credit Cash. Note: do not debit incometax account. If you debit income tax account it means that its treated as business expenditure. It is wrong in this case.
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If Income tax paid by company? Company is a separate legal entity.The payment of tax is the liability of the company. It is not the liability of Shareholders. SHARE HOLDERS ARE DIFFERENT FROM COMPANY. It is a business expenditure. Journal entry: Debit Income tax account and credit Cash account.
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How do you deal indirect taxes? Indirect taxes such as sales tax, excise duty, Octroi duty, import duty, export duty are actually imposed on the individual who buys such article. It is not the responsibility of the individuals who run the business but by the business itself. It is a business expenditure. Journal entry: Debit sales tax a/c Credit cash a/c
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5.Double entry / Single entry Is Accounting based on business concept or religious concept?
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It is based on religious concept Giving first and receiving later.
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