This is the profit and loss account of a non-trading organization. It contains only revenue items that will be debited with all the expenditures and credited with all incomes of the business for a particular period of time – whether it has or have not actually been paid or received within that period of time. …
In a receipt and payment accounts, it is the summarized cashbook for any particular period of time. It begins with the opening balance of cash in hand and/or at the bank balance and so from here, we should debit all income received and credit all income paid out during the period. These aspects of the …
Expenditure can be classified into thus: (i) Capital expenditure and (ii) Revenue expenditure. Under capital expenditure, it refers to those expenditure on installation of assets such as Electric and Telephone, expenditure on transportation of assets, expenditure made to improve assets and like-wise expenditure made on trademark etc. Note that expenditure on installation and, transportation of …
This is an expenditure that can only be benefited in any accounting period. For example, expenditure on the items that is used in. the ordinary routine of the business. Examples are cost for stationery, wages, rent, advertisement etc. These aspects of expenses are closed at the end of any trading period and more so, their …
These are those items that are consumable in any accounting, period. They are those, goods purchased in a business for the sake of resale or goods and, services used in a business within a short period of time. Revenue items are on the other way round said to be consumed in a business within the …
These are expenditure of which its benefits is not fully consumed in a given period but it is spread over several periods. It includes all those assets acquired purposely to earn income or to increase the earning capacity of the business. For instance, land and building such as purchase or land to build shops and …