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PARTNERSHIP BUSINESS PARTNERSHIP BUSINESS is a business where two or more persons agree to carry on commercial activity to earn profits. From legal point of view, partnership firm is not a separate legal entity. In other words, it has no existence separate from its partners. It means that in case of bankruptcy of partnership firm,…
STATEMENT OF AFFAIRS AND BALANCE SHEET DIFFERENCE The Statement of Affairs and Balance Sheet are different names of records of assets and liabilities maintained by the different kinds of business organisation. It is necessary to know the Statement of Affairs and Balance Sheet difference to understand their meaning and adoption. BALANCE SHEET Balance Sheet is…
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SINGLE ENTRY SYSTEM IN ACCOUNTING Single Entry System in accounting is a system in which the proprietors or the firms do not follow specific rules of double entry system to maintain accounts. It is an Incomplete Record of Accounts. The accounts are maintain as per the convenience of the users. ACCORDING TO KOHLER “A system…
PROVISIONS MEANING Provisions meaning states the amount set aside by charging to the Profit and Loss Account, to provide for any known liability, the amount of which cannot be determined with accuracy. ACCORDING TO COMPANIES ACT 2013: “Provision usually means an amount written off or retained by the way of providing depreciation, renewals or dimunitions…
RESERVES ACCOUNTING It refers to the amount set aside out of profits of the business to strengthen its financial position or to meet future contingencies or losses. Reserves Accounting aims to provide the firm with sufficient finance to safeguard itself for upcoming adverse situations. Usually the firm does not distribute the whole amount of profits….
HIRE PURCHASE Hire Purchase system is a system in which the goods are delivered to the purchaser at the time of agreement before the payment of instalments. However, the title of the goods is transferred after the payment of all instalments as per the hire purchase agreement. It is a special system of purchase and…
DEPRECIATION ACCOUNTING Depreciation denotes the decrease in the book value of the fixed assets. It is the permanent and gradual decrease in the value of fixed assets. It is due to use, effluxion of time, obsolescence, expiration of legal rights or any other cause. Depreciation Accounting is done to provide the assets at true value…
Depreciation is the permanent and gradual decrease in the value of fixed asset due to use, effluxion of time, obsolescence, expiration of legal rights etc.
Valid Consideration means something in return i.e. Quid Pro Quo. It is a price that the promisor agrees to pay to the promisee to form a valid contract.
ACCEPTANCE The valid essentials of Acceptance are as follows: According to Section 2(b) of Indian Contract Act, 1872 “When the person to whom the proposal is made signifies his assent, it is an acceptance of the proposal and accepted proposal is called a promise or an agreement”. Thus, when the offeree to whom the proposal…
