Ayah Eca

Assets are anything which the firm owns or has title to (in other words ownership of). The term net then means all assets net of liabilities. Net assets are therefore:- NET ASSETS = Total Assets - Total Liabilities The total assets are made up of fixed assets (plant, machinery and equipment) and current assets which is the total of stock, debtors and cash. The total liabilities are made up in much the same way of long-term liabilities and current liabilities . The net assets figure therefore can be used as a measure of the value of the business. It is the value of everything the business owns after all the debts have been taken account of. For more detail of how this can be used as a measure of the value of a business try going to the theory section of the worksheet below. Source: http://www.bized.co.uk/

Each of the accounts is separated into two columns. The left hand column is used to show receipts and the right hand side is used to show payments. There is a simple rule to explain which side of the account you should list any particular transaction. Debit - the account that receives the goods, services or money. (The receiver) Credit - the account that gives goods, services or money. (The giver) A local business called Sharp Ltd has an account with Pepe. They often have long business meetings and have pizzas delivered. If we look at their account below we can see that on May 10 th they purchased pizzas from Pepe on credit. Sharp Ltd is the receiver of goods and the transaction is therefore entered on the debit side. On June 9 th (thirty days later) Sharp Ltd makes a payment for the goods. Sharp Ltd is the giver in this case and so his account is credited. Account of Sharp Ltd ...

The Creditors' Ledger The Debtors' Ledger The Cash Book The General Ledger All of the ledgers contain "accounts". These "accounts", just like bank accounts are either in credit or in debt. For Pepe's Pizza Parlour, when Pepe has money in his bank account then the bank owes Pepe money. In this case Pepe is the bank's creditor and the bank is his debtor. In fact Pepe is overdrawn and has an arranged overdraft. Pepe owes the bank money. In this case Pepe is the bank's debtor and the bank is Pepe's creditor. Every party with which Pepe's Pizza Parlour has a transaction has an "account" with the business i.e. people who Pepe buys goods from and people who Pepe sells goods to. In addition there are accounts to represent how much equipment the business owns, expense accounts to cover the day to day exp...

Let us assume that on a given date we have taken each of our ledgers and balanced all of the accounts within them. What do we do with them now? We put them together to form a " trial balance. " All the accounts should have been balanced off correctly and they will all be used. Those accounts which have their balances on the left hand side are our debtors and those balances will appear in the left hand column of the trial balance . Those accounts with their balances on the right hand side of the account are our creditors and those balances will appear on the right hand side of our trial balance . Remember that every transaction that a business carries out is recorded against two accounts (i.e. a double entry). Provided that the accounts were balanced correctly at the beginning of the accounting period then left column (Dr) and the right column (Cr) should total exactly the same . If they do not then a mistake has been made. The...

by Ken Delaney-Moore, Sheffield Hallam University Aims: This worksheet deals with: The need for objectivity and consistency within the accounting profession. The concepts of going concern, accruals, prudence, consistency, cost, materiality, business entity, money measurement, realisation and dual aspect. The main provisions of SSAP 2 After having completed the worksheet you should be able to explain these points. When you are done, please fill-in the on-line evaluation form in order for us to monitor the quality of the materials we provide for you. Tell us what we're doing right and wrong. It takes very little time, and your opinions are valued - thank you. Introduction Imagine that you are a business owner, and you take copies of your financial records ('books') to six different accountants. You ask each one to calculate your profit for the year. A fortnight later they each provide you wi...

by Ken Delaney-Moore, Sheffield Hallam University Aims: This worksheet deals with: The accounting equation. The accounting concepts of 'business entity' and 'dual aspect'. The effects of transactions on the balance sheet. After having completed the worksheet you should be better able to perform to syllabus specifications relating to these points. When you are done, please fill-in the on-line evaluation form in order for us to monitor the quality of the materials we provide for you. Tell us what we're doing right and wrong. It takes very little time, and your opinions are valued - thank you. A business start-up Imagine that 'Jim Sayers' puts £5,000 of his personal savings into a business bank accoun...

1. Which of the following is not a step in the accounting process? A. identification. B. verification. C. recording. D. communication. 2. Which of the following statements about users of accounting information is incorrect? A. Management is an internal user. B. Taxing authorities are external users. C. Present creditors are external users. D. Regulatory authorities are internal users. 3. Services provided by a public accountant include: A. auditing, taxation, and management consulting. B. auditing, budgeting, and management consulting. C. auditing, budgeting, and cost accounting. D. internal auditing, budgeting, and management consulting. 4. The cost principle states that: A. assets should be initially recorded at cost and adjusted when the market value changes. B. activities of an entity are to be kept separate and distinct from its owner. C. assets should be recorded at their cost. D. only transaction data capable of being expressed in t...