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Yogita Ingle 14 hours ago

(a) Fixed Capital Account
A firm prepares Fixed Account with very basic capital related transactions. Unlike the Capital account, under these repetitive capital related transactions does not affect the Capital balance. Like, Salary of employees, commission for employees, interest on capital, interest on drawings, etc.

The firm opens the account in the name of “Fixed Capital Account”. Initial Investment will appear on the credit side as the starting entry. Only 2 kinds of Capital related transactions can affect its balance :

(1) Addition of Capital

(2) Permanent Withdrawal of Capital

(b) Current Account

It includes all the capital related transactions other than the initial investment of capital, addition of capital and withdrawal of capital. Hence, It mainly includes items such as :

1. Interest on Capital

2. Interest on Drawings

3. Salaries and other remuneration to employees

4. Commission to employees and even more.

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Meghna Thapar 15 hours ago

Fixed capital account and fluctuating capital account are the terms used in the context of partnership, a partnership is a way of doing business and in case of partnership two or more person come together to start a business and shares its profit and losses in an agreed ratio. Fixed Capital Account – Under this system, the capital which is introduced by partners will remain fixed throughout the life of the partnership. ... Fluctuating capital account method is usually preferred by partners; however they can also use fixed capital account according to their business and preference.

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Srishti 💌 1 day, 16 hours ago

Distribution

Yogita Ingle 1 day, 17 hours ago

Appropriation Bill gives power to the government to withdraw funds from the Consolidated Fund of India for meeting the expenditure during the financial year.

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Srishti 💌 1 week ago

All you need is clear concept and practice

Srishti 💌 1 week ago

Easiest chapter
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Anubhav Saxena 1 week, 1 day ago

Just crosspost items of income and expenditure A/c in receipt and payment U will be able to prepare it And always remember if closing balance of cash is not given in R&P A/c then There will be balance c/d in the answer
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Yogita Ingle 1 week, 4 days ago

  1. Wear and Tear due to Use or Passage of Time: Wear and tear is nothing but deterioration and the following decrease in the value of an asset, resulting from its use in business operations for earning revenue.
  2. Expiration of Legal Rights: Some categories of assets lose their value after the agreement directing their use in business comes to an end after the expiry of the predetermined period.
  3. Obsolescence: Obsolescence is another factor driving to the depreciation of fixed assets. In common language, obsolescence means being “out-of-date”. Obsolescence refers to an actual asset becoming outdated on account of the availability of a better type of asset.
  4. Abnormal Factors: Drop in the use of the asset may be caused by abnormal factors. Namely, accidents due to the earthquake, fire, floods, etc., Accidental loss is permanent but not continuing.
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Yogita Ingle 1 week, 5 days ago

Objective Receipts and payments account is prepared to show cash and bank receipts and payments during the period to derive closing balance of cash and bank. Income and expenditureaccount is prepared to show the net result of the operation during the period to derive surplus or deficit.

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Srishti Jain 1 week, 5 days ago

By debiting in income and expenditure account(there are other cases also in thiss cncpt)
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Yogita Ingle 1 week, 5 days ago

That is related that advance of previous year must be added and outstanding of previous year must be substracted.

ours outstanding added and advance substracted.

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Khushi Varshney 1 week, 5 days ago

Treatment of existing Goodwill appearing in the Balance Sheet: Journal entry: Old Partners’ Capital/Current a/c………………Dr. (In Old profit sharing ratio) To Goodwill a/c (Being the existing goodwill is written off) Method1: When goodwill is adjusted through partners’ capital /current accounts Journal Entry: Gaining partners Capital/ Current a/c………Dr. (In Gaining Ratio) To Sacrificing Partners 'Capital /Current a/c (In Sacrificing Ratio) (Being the compensation of gaining partners to Sacrificing partners) Method2: When Goodwill is raised and Written off Goodwill a/c…………………………….Dr. (Full revised value of Goodwill) To Old Partners’ Capital/ Current a/c (In old Profit sharing ratio) (Being the goodwill raised and credited to Partners Capital accounts in old profit sharing ratio) All Partners Capital/ Current a/c .................. Dr. (In new profit sharing ratio) (Including Incoming or new partner) To Goodwill a/c (With value of Goodwill) (Being the goodwill debited to Partners Capital accounts in New profit sharing ratio)
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Yogita Ingle 2 weeks ago

Capital fund is the excess of NPOs' assets over its liabilities. In other words, the excess of assets over the liabilities for a profit earning organisation is termed as capital and the same for an NPO is termed as capital fund. Any surplus or deficit ascertained from Income and Expenditure account is added to (deducted from) the capital fund. It is also termed as Accumulated Fund.

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Khushi Varshney 1 week, 5 days ago

it is prepared on accrual basis of accounting

Yogita Ingle 2 weeks ago

Income and Expenditure Account (I&E) is similar to the Profit and Loss Account in the sense that while the former is prepared to ascertain surplus or deficit during an accounting period, the latter is prepared to ascertain net profit or net loss incurred during an accounting period. I&E Account is a nominal account and is prepared on the accrual basis. It records all transactions of revenue nature that are related to the current accounting period (whether outstanding or prepaid) for which the books are maintained. All expenses and losses are recorded on the debit side (Expenditure side) and all income and gains are recorded on the credit side (Income side) of I&E Account. The closing balance or the balancing figure of I&E Account is termed as surplus (or deficit), if the sum total of the Income side exceeds (is lesser than) the sum total of the Expenditure side.

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