F3(Double entry practice quetions).xls - Accounting equation and double entry system Rendering of services Trading of goods*Hospitals\/health centre

F3(Double entry practice quetions).xls - Accounting...

This preview shows page 1 - 4 out of 28 pages.

Accounting equation and double entry system Rendering of services Trading of goods Trading of finished goods Manufactures Stock/Inventory:- Stock/Inventory:- *Finished goods *Raw material e.g. grocery in *Work in process a departmental store *Finished goods (Types according to the output of the business) TYPES OF BUSINESS (Types according to who is owner and form of capital) Sole trader Partnership Limited Liability Company *Single owner *More than one owner(Partners) Private Limited Public Limited Company *Capital is of single owner *Capital belongs to those partners Company (Pvt. Ltd.) Listed Non-Listed *Owners are called shareholders *They own shares in the company *Capital is called share capital *Profit given to shareholders is called dividend Types of accounting Financial accounting Management accounting Objective:- Objective:- *Hospitals/health centre provide health services *Transportation companies provide transportation services *Hence profit/loss belongs to single owner *They share profit/loss according to the agreement To know the FINANCIAL PERFORMANCE and FINANCIAL POSITION at the end of a specific period e.g. after one year. To accumulate the costs related to each unit of product sold/manufactured and also to accumulate costs for a service rendered by rendering of services business, hence business may add an appropriate profit to the units to get the selling price. Management accounting uses information from both costing and financial records for decision making purposes.
Image of page 1
Terminology Assets Something owned or controlled by the business that will result in future economic benefits Examples Land and building Plants and machinery Stocks Accounts receivables (those who owe money to us) Cash in hand Cash at bank Capital Owner's investment in business from his personal resources e.g. cash or any other asset given to the business Liabilities An amount owed by the business to third parties. Examples Long term loans Accounts payable (those to whom we owe money) Bank overdraft Other payables trade receivables/trade debtors Accounts Receivables Other receivables/other debtors trade payables/trade creditors Accounts Payables Other payables/other creditors People to whom we sell goods or render services on credit ( directly relating to our trade activity) People who owe to us for the reason other than that of sale of goods or rendering of services (not directly relating to our trade activity) e.g. rent receivable People from whom we bought goods or receive services on credit ( directly relating to our trade activity) People to whom we owe for the reason other than that of purchase of goods or receiving of services (not directly relating to our trade activity) e.g. rent payable, telephone bills payable
Image of page 2
Accounting equation ASSETS = CAPITAL + LIABILITIES 1 You are to complete the gaps in the following table:- Assets Liabilities Capital £ £ £ a) 12,500 1,800 ?
Image of page 3
Image of page 4

You've reached the end of your free preview.

Want to read all 28 pages?

  • Fall '18
  • 1966, 1979, 1977, Days of the year

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes