Classification of Assets and Liabilities

What are Assets and Liabilities? A balance sheet is a statement that outlines the financial position of an enterprise. It is necessary for the balance sheet to show the enterprise’s assets and liabilities based on their characteristic features. If assets are the property and possessions of the business, liabilities are its legal obligations (i.e., the … Read more

Accounts Payable Ledger

What Is Accounts Payable Ledger? Accounts Payable Ledger is a subsidiary ledger that lists the individual accounts of creditors; also referred to as the creditors’ ledger. What Is a Subsidiary Ledger? A subsidiary ledger is a ledger that contains only one type of account, such as the accounts payable ledger. Explanation When a business has … Read more

Company Final Acounts Practical Problems and Solutions

We have prepared Company Final Accounts Practical Problems and Solution paper for the ease of students to understand the concept of Final Accounts more clearly. Problem No. 1 For the year ended 31st December 2019 the profit of Krebs Ltd. before changing depreciation on fixed assets and Managerial commission amounted to $300,000. Depreciation for the … Read more

Accounts Payable

Accounts Payable Definition The Accounts Payable is a liability account that represents debts owed to the creditors of a business. Most purchases take place on credit, and under the accrual basis of accounting, the liability must be recorded at the time title passes for the assets purchased or when the services are received, proper internal … Read more

Provision for discount on debtors

At the end of the trading period, there is always number of outstanding debtors or accounts receivable. In order to motivate his debtors to pay their debts, the trader sometimes offers attraction in the form of ca ash discount. As he knows from experience that customers are always anxious to enjoy the benefits of cash discount. … Read more

Difference between Trial balance and balance Sheet

The following are the main points of difference between Trial Balance and Balance Sheet. Trial balance Balance Sheet It is prepared to check the arithmetical accuracy of the ledger accounts. It is prepared to show the financial position of the business on a particular date. It includes the balances of all the accounts appearing in the … Read more

Marshalling of Balance Sheet

Definition The arrangement of assets and liabilities in balance Sheet is called “Marshalling“. Explanation The main purpose of Balance Sheet is to show the financial position of the business. Therefore, assets and liabilities in Balance Sheet should be shown in such an order which help to understand the financial position easily. To serve this purpose assets … Read more