Talking About Provisions
Defines a provision as: ‘Any amount written off or retained by way of providing for depreciation, renewals or diminution in value of assets or retained by way of providing for any known liability of which the amount cannot be determined with substantialaccuracy.’ It will be noted that a provision is a charge against profits, but...
Prepayments
Prepayments cover payments received from debtors or payments made to creditors before due date. Thus, if rent is paid for three months in advance on 31st December, the date to which accounts were made up, it is necessary to
About Accruals
Now about accruals, below description about accruals! a. Accrued expenditure Invoices received from suppliers represent accrued expenditure in one sense of the term, but the expression is more strictly used to cover expenditure accrued but not yet evidenced by a formal invoice or bill from the creditor. If accounts are made up to
About Outstandings
Do you know about outstandings? follow about standings below! a. Outstanding charges At the balancing date there are in most concerns a number of charges incurred but not entered in the books. Thus, if the date to which accounts are being drawn up is, say, 31st December, it is unlikely that invoices for
ADJUSTMENTS FOR FINAL ACCOUNTS
The preceding sections of this chapter have aimed to give a broad picture of the objects of drawing up the so-called final accounts, and have indicated how a rationally organised accounting system can facilitate the preparation of final revenue accounts and Balance Sheets. With the broad picture in mind, consideration may now be given to...
THE SUMMARISED REVENUE ACCOUNT
The preceding sections have dealt with the conventional grouping of the revenue accounts which lead to the final profit. In a complex business the grouping of results into Manufacturing, Trading and Profit and Loss Accounts can be somewhat arbitrary. For the purpose of presenting the results for a particular period in a concise and
