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CHAPTER 12 PARTNERSHIPS
Accounting for Partnerships
Advantages / Disadvantages
Accounting for Partnerships
Dividing Net Income or Net Loss
Admission or Withdrawal of a
There are three elements of cost:
- Material Cost: This is the cost of material or the commodity used by the organisation for its production
purpose. Material is the substance, from which a product is made. Thus, it may be in a raw or a
What do you mean by accounting concepts? List them.
Accounting concepts are those basis assumptions upon which basic process of accounting is
based. Following are the basic accounting concepts:
1) Business Entity Concept
2) Dual Aspect Concept
3) Going Co
xplain Normal and Abnormal Costs.
Normal Cost are the normal or regular costs which are incurred in the normal conditions during
the normal operations of the organization. They are the sum of actual direct materials cost, actual
labour cost and other dire
Explain a)Convention of Conservation b)Convention of
Materiality c) Convention of Consistency
a)Convention of Conservation
This accounting convention is generally expressed as to anticipate all the future losses and
expenses, without considering the futur
What are the various systems of Accounting? Explain them.
There are two systems of Accounting:
1) Cash System of Accounting: This system records only cash receipts and payments. This
system assumes that there are no credit transactions. In this system of
Explain Direct cost and Indirect cost.
Direct Cost are all the expenses which can be identified with the individual product, service or
job cost centre. In the manufacturing process of products, materials are purchased, labours are
hired and wages are pai
What are the types of errors which have an effect on Trial
Following are the types of errors which affect agreement of Trial Balance:
- Wrong totalling of subsidiary books
- Posting on the wrong side of the account
- Posting of the wrong amount
D. Double Entry Accounting System
The double entry accounting system recognizes a two-fold effect in every transaction. Thus,
business transactions are recorded in at least two accounts.
Under the double entry accounting system, transactions are recorded
E. The Accounting Cycle
The accounting cycle is a sequence of steps in the collection, processing, and presentation of
accounting information. It is made up of the following steps:
1. Identifying and analyzing business transactions and events
Rules of accounting that should be followed in preparation of all accounts and financial
statements. The four fundamental concepts are
(1) Accruals concept: revenue and expenses are recorded when they occur and not when the cash
is received or paid out;
C. Accounting Equation
The accounting equation shows the relationships between the accounting elements: assets,
liabilities and capital. The basic accounting equation is:
Assets = Liabilities + Capital
It shows that assets owned by a company are coupled w
B. Elements of Accounting
The elements of accounting pertain to assets, liabilities, and capital. Assets are resources owned
by a company; liabilities are obligations to creditors and lenders; and capital refers to the interest
of the owners in the busine
What measures would you take to rectify the errors?
If the trial balance does not agree, in such case to close the books of accounts the difference in
the trial balance is posted in a suspense account and then the trial balance is tallied. As the
What things would you take into consideration while
installing a costing system?
Following things should be taken into consideration while installing a costing system:
- Nature of the Product is a very important deciding factor in installing an effective
4 Market Structures
Perfect competition is defined as a situation where there:
-Are many small buyers and sellers (firms) each too small to affect the
the firms are "price-takers".
-Is a homogeneous
What is a PPC?
The description of the best possible
combinations of two goods to produce using all
of the available resources.
Shows the trade-off between more of one good
in terms of the other.
Assumes: input endowments given, technology
given, time give
Rational Economic Man
of human nature is based on the conjecture
generally follow their own self interests, as they see them, and that their self
interests are primarily economic.
This idea can be seen in the philosophy of
Basic Concepts Review
What is Economics All About?
Understanding how economies function is the basic purpose
behind studying economics
How is it organized?
How it behaves?
How successful is it in achieving its objectives?
Macro= performance of the econom
Don't worry if the textbook definition went
over your head. The key thing to
understand is that we use elasticity when
we want to see how one thing changes
when we change something else. How
does demand for a good change
Registration instructions available on e.centennial
Optional readings/practice with each chapter
All labs are due at the start of finals week
(April 21st 11:00 pm)
Course Key: 4GA9-WLST-4DB
Financial Statement Analysis
AS-1 ( 1 )
What is financial analysis?
analysis is the calculation and interpretation of financial ratios used to draw
on the financial state of the business.
The Statement of Cash Flow
AS-1 ( 1 )
Is the cash flow statement an optional statement? Explain.
cash flow statement is not optional. It is required by GAAP.
AS-2 ( 2 )
Identify the three ways a business can gener
What is cost accountancy? What are the objects of Cost
Cost accountancy is the application of costing and cost accounting principles, methods and
techniques to the science, art and practice of cost control and the ascertainment of profitabili
Liabilities can also be classified as current or non-current. A liability is considered current of
they are payable within 12 months from the end of the accounting period, or within the
company's normal operating cycle if the cycle exceeds 12
A. Basic Accounting Principles
Accounting assumptions and principles provide the bases in preparing, presenting and
interpreting general-purpose financial statements.
1. Accrual Income is recognized when earned regardless of when collected, and expenses
Math 180-Week 8
Exponential and Logarithmic Functions
13.4 Logarithms to the Base 10
Logarithms to the base 10 are called common logarithms.
log x=log 10 x
(i.e. when we write
log x without a base, it is implied that we a