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You are currently browsing the Understanding Bookkeeping weblog archives for the day Saturday, November 3rd, 2007.
Along the way, when we keep the books of account, there is a certain bookkeeping term called Contra account. Do we know what is this? In simple term, contra account is actually an opposite account to another account.
The following are some of the examples of using a contra account: (more…)
In the Balance Sheet, one key category is the Share Capital. At times, we might get confuse with the various classification of share capital. (more…)
We alway think that as financial statements have recorded all the actual transaction of a business hence, this will be the most ideal/appropriate reports whether for external and internal users. (more…)
Let understand what’s reserves:-
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RESERVES |
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Reserves are appropriations of profit namely when profits have been ascertained after deducting all expenses which includes provision and others. Reserves are residual earnings after all expenses and taxation which belongs to the owners namely the shareholders. There are essentially two(2) types of Reserves:
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If you refer to below accounting equation, owner’s equity form one of the three key elements of a Balance Sheet.
Let understand &/define Owner’s Equity: (more…)
In this Part 3, let’s look at what are really long term liabilities in a typical Balance Sheet: (more…)
In this Part 2, let’s understand what are current liabilities: (more…)
This Part 1 explains what’s liabilities the component of the total liabilities side of a typical Balance Sheet: (more…)
This last part of the article deals with non-current assets of a Balance Sheet. They consists of the Fixed Assets and Long Term Investments.
Let understand the following: (more…)
This part 2 of the assets side of the Balance Sheet specifically looks what’s current assets and its components:
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WHAT ARE CURRENT ASSETS? |
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Current assets are assets:
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Current Assets |
Description |
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Cash |
Funds that are readily available for distribution. |
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Marketable Securities |
Investments that are both readily marketable and expected to be converted into cash within one year |
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Inventories |
Consists of raw materials, work-in-progress and finished goods. Aggregate of items either held for sale in the ordinary course of the business, in process of production for such sale, or soon to be consumed in production |
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Accounts Receivable |
Amounts owed to the entity by its customers |
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Prepaid expenses |
Assets paid in advance whose usefulness will expire in the near future |
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Deposits |
Deposits are assets which are monies paid to landlord, government authorities and others. These monies are paid in advance but are recoverable in the near future. |
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Other Debtors |
Amount owing by the entity’s non customers like staff advances, etc |
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