BOOK KEEPING

7 key issues that should be covered in partnership agreement

7 key issues that should be covered in partnership agreement.

Key items that should be covered in partnership agreement when setting up partnership include the following:

  • Capital, a partnership agreement should state how much each partner is putting into and leaving in the partnership.
  • Profit sharing ratio; the partnership agreement should include how any profits are to be split between the various partners;
  • Goodwill; the partnership agreement should
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Accounting records - meaning

Accounting records – meaning

Accounting records are the records of initial accounting entries and supporting records, such as:

checks and records of electronic fund transfers;

invoices; 

contracts; 

the general and subsidiary ledgers,

Journal entries and other adjustments to the financial Statements that are not reflected in the formal Journal entries;

and the records such as work sheets and spreadsheets supporting cost allocations, computations, reconciliationsRead the rest

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What is sole proprietorship?

The sole proprietorship is the business owned and usually carried on by a single person known as proprietor. In sole proprietorship, business ownership and management is in control of the individual.  



The sole proprietorship has a number of advantages such as ease of starting, flexibility in decision-making and no bureaucracies in starting. On the … Read the rest

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Why substance over form is important in accounting?

Under IASB  conceptual framework for financial reporting, certain qualitative characteristics of useful financial information are identified. These are subdivided into characteristics considered  fundamental and those considered to be enhancing. The two fundamental characteristics identified by framework are relevance and faithful representation. In order for financial transaction to be represented  faithfully in the financial statements the principle of substance over form … Read the rest