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Sample Note On Quick Reference

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Published in: Accounting
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Anish L / Dubai

5 years of teaching experience

Qualification: M.Com

Teaches: Accountancy: Management, Accountancy: Tax, Bookkeeping, Accounting, Accounts, Accountancy

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  1. Part A Part B April May June July August September October November November December January Febuary Marks 1 3 4 6 8 1 4 6 Total Book 1 Book 1 Book 1 Book 2 Book 2 Book 3 Book 3 Book 3 Revision & Test Revision & Test Test No of Questions 6 4 2 3 2 2 3 1 4 1 2 3 Times 9 28 14 45 45 3 21 15 23
  2. Accounting for PA, Goodwill & change in profit sharing ration Admission & retirement Death & dissoultion Vacation Balance sheet, commone size, comparative & ration anaysis cash flow Equity Debenture Non Profit Org Weekly test 1st - 1-3 chpts, 2nd -4, 3rd -5 4th -6 Weekly test 1st - 1-3 chpts, 2nd -4, 3rd -1 4th -2 & 3 Paper solving atleast 4 papers Remark 1.5 mintue per question 7 mintues per question 7 mintues per question 15 mintues per question appropraiately 22 mintues 1.5 mintue per question 7 mintues per question 15 mintues per question Marks 10 25 20 25 Total Mks 6 12 8 18 16 2 12 6 80
  3. Provision for partnership act 1932 Profit sharing equally No int on capital, no int on drawing, no salary, no commission 6% int on the loan provided by partner In the absence of partnership deed / agreement, partnership act is considered Dr To int on cap to salary to commission P/ L appriation A/c Cr By NP By int on drawings Note to transfer to gen reserve To profit trans to capital * Created to share the net profits amg partners * Int on loan if not given, reduce from NP * Comm for manager if not given, reduce from NP Fixed Capital (Capital is constant, only entry is drawings and introduction of new capital) all adjustments related to int on capital, profit sharing etc done in current a/c _Flutuating Capital, only 1 account is created... all entries i.e int on capital, drawings etc all are under capital a/c, no current ac is created Past Adjustments * Create table * Reverse things which was wrongly done example profit shared wrongly... debit th amount in the partners capital * Debit / credit the adjustments not done (post the total figures in the opposite sid * See the balance in the firms ledger, share it amoung the partners * Debit side of parts capital is more, debit the difference to part capital and vice ve
  4. Remember No additional items Guaratee of profit means assurance of certain profit never account int on loan in the PL appr A/C whenver capital and curr A/c is given, it means mtd is fixed capital mtd
  5. Whenever there is a change in partnership ratio, there is one partner who sacrifices and other gains Entry Gaining Partner's capital A/C dr to Sacrificing partner same rule is applicable for admission / retirement / death or change in PSR A & B is sharing profit 2:1, C has joined for 1/4 share It means remaining share of 3/4 has to be shared in 2:1 ration among OP A = 2/3 of 3/4 plus 2/3 B = 1/3 of 3/4 plus 1/3 c=1/4 ie 6/12 + 8/12 = 14/12 ie 3/12 + 4/12 = 7/12 i.e 1/4*3/3 = 3/12 Remember Of means 'X' From means '-' & B is sharing profit 2:1, C will get his share of 1/4 equally by partner It means C will get 1/8 from A and B each (1/8 + 1/8 = 2/8 i.e 1/4) = 2/3 - 1/8 B = 1/3 - 1/8 i.e (16-3)24 = 13/24 i.e (8-3)24 = 5/24 i.e 1/4*6/6 = 6/24 * If question states that no changes to be shown in the balance sheet, do not create revaluation accounts, simply find the profit / loss and share in sacrificing ratio * If question states that all reserves in the balance sheet should remain intact distribute the reserves (gen res / profit / adv exp) in sacrificing ratio
  6. Debit all losses -Depreciation -bad debts Rev profit trans to cap a transfer loss frm bal sheet example, adv exp & G/W Credit all income -creditors waved off -land appreciated Rev loss trans to cap Ita opening balance b/d transfer all reserves -Gen reserve / profit -WCR (reduce claim) -IFR( aft adjustment) Note 1) 2) 3) 4) 5) 6) Admission Balance sheet Should tally Cash A/c Advisable to prepare it so that you don't miss any entries, closing balance transf to balsheet transfer all the items from old balance sheet assets - asset side(new balance sheet) / debit side liabilities - liabilities side(balance sheet / credit side Anything from the balancesheet to be transferred to partners in old ration example g/w, profits etc New G/W always at sacrificing ratio(SR) If no new ration given, Old ratio = Sacrifing Rato if new ration given, find SR and distribute new G/W All adjustments should have 2 effect, Dr & Cr Goodwill is the money new partner brings in ... paid to old partner * it is mandatory to acc« If goodwill of the firm is given, new partner pays his share eg 10000 is firms g/w, his share Goodwill can also be hidden, when no information is provided in the sum Attimes, partner brings cash / assets directly in the form of goodwill if not then debit partr Retirement/ Goodwill to be transferred to exiting partner in the gaining ratio death
  7. N/A
  8. Dr Transfer all the assets from Balance sheet including goodwill, Debtors (excluding the PBD) exclude cash as you create a separate cash a/c Debit liabilites settled To Cash To Partners Capital To Cash / parters cap (Realisation Exp) To Rev Profit (Bal Fig) to be transferred to partner par Transfer the profit in the asset side from balsheet Balance to Bank transfer the opening balance Cash received cash cash Note : 1 Pass 2 entries for all adjustment.. 2 Since you have transferred all the assets and liabilities t realisation, cash or capital acounts Example - Assets sold for 10000 Cash A/c Dr Realisation Cr Realisation expenese paid Realisation A/c Dr Cash / Partners capital A/c Cr 3 DON'T FORGET TO PAY ALL THE LIABILITIES TRANSFER 4 if a liablity is settled with an asset, NO ENTRY
  9. {ealisation A/C Cr Transfer all the liabilities from Balance sheet include IFF , Provision for debts Exclude partners loan as you create a separate part loan a/c Credit assset sold / taken by partner By Cash By Partners Capital By Rev loss (Bal Fig) to be transferred to partner •tners Capital A/c Transfer the opening balance Transfer the general reserve, WCR, Rev Profit from balsheet (exclude IFR as it is transferred to realisation) Balance to Bank Cash A/c Cash paid edger should tally artners Loan transfer the opening balance o realisation, for any entries you will be only using Liabilities paid by partner Realisation Dr Partner's cap Cr ssets taken by partner Partner's cap Dr Realisation Cr RED TO REALISATION(NOT PDD, IFR)
  10. Add Substract Add Substract Substract CASH FLOW FROM OPERATING ACTIVITIES Net Profit before tax & extra ordinary items Non cash & Non operation items Non cash - Dep, amortisation Non operating - Int paid, proposed div, loss on sale of FA Substract Non cash & non operation items Profit on sales of FA, Int / rental received etc Change in working capital Increase in liabilites, assume loan taken increase cash decrease in assets, assume stock sold increase cash Increase in assets , assume purchased assets reduce the cash decrease in liabilites, assume paying off loan reduces the cash Income tax paid CASH FLOW FROM INVESTING ACTIVITIES Related with fixed asset(purchase & sales) CASH FLOW FROM FINANCIAL ACTIVITIES Increase in equity means cash inflow, decrease in debenture means paid off ** even bank overdraft & bank loan is considered Add Opening balance of cash & cash equivalent(marketable securities / short term deposit You should get the closing balance of cash & cash equivalent automatically Note 1) 2) Always create a ledger if you have items in the balance and related adjustments eg dep for machir prov for tax etc orelse pass 2 entries if no information given, interest on debenture to be paid based on last year(lts hidden entry)
  11. Remember Debits side of P/L credit side of P/L Only curr assets & curr liab except bank OD, bank loan & cash Only Fixed Assets & Investment Only related to capital

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