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Tuesday, 5 May 2015

LIMITED COMPANY

Limited liability company is a one kind of business where many investor invest their money.And it is a large business.May be their are thousand of shareholder of this business.It can be operated business domestically or internally.It has many many investor or shareholder.

Actually shareholders provide money. Annually company issue share and shareholders collect this shares and business increase their money. on the other word sharemarket is a one kind of money market. Shareholder provides money but they do not operate the business. So they collect director and director run the whole business.All the decision make director.And company run continually to his like


Like owners of partnerships or sole trader they provide their personal income tax.But the LLC itself is not a separate taxable entity. Like owners of a organization, however, all LLC owners are protected from their personal liability for business debts and claims -- it is known as "limited liability." For this reasons, many people say that the LLC combines the best features of the partnership and corporate business structures in the world.

Because of these dual benefits, of the shareholders, or “Members” as they are known if part of an "limited liability.Actually it has certain tax advantages, including, but not limited to, pass-through taxation and partnership treatment by the IRS. These advantages make limited liability very desirable for certain business  ventures.

Advantages of the LLC form of business organization:
⦁    Tax advantage
⦁    limited liability
⦁    more people
⦁    much money
⦁    better job for worker
⦁    big market place
⦁    issue share anytime
⦁    fringe benefit

    An limited liability company allows their members, to like shareholders in a corporation, to enjoy limited liability. The LLC is a separate legal entity.  Its assets are considered separate and apart from Member’s assets.Because save for the amount invested by the member in the LLC.

Some of the minor disadvantages of an LLC might be:
⦁    It is very hard.
⦁    It is very risky business
⦁    Tax rate is high
⦁    It is very costly
⦁    It is bouring job

A organisation structure whereby the shareholder of the company cannot be held personally liable for the company's all debts or liabilities.LLC differ slightly from one country to country. However, it is very essentially a hybrid entity that is combination of the characteristics  corporation and a partnership or sole tradership.

PARTNERSHIP BUSINESS

Partnership is one kind of business where two or more than people operate this business.It is owned jointly number of people.The may be partner, client,friend,family or relative.The partners are jointly and severally liable for any losses that the business could make.It is a traditional business.

There are two or more people are associated.Like a sole trader the partnership is not legally distinguished from its member.Professional assets of the partners can be used.

The more advantage of trading as a partnership is:
  • There are more money.
  • More resources are available. 
  • Partner can substitute for each other.

Disadvantage of partnership is:
  • There are unlimited liability.
  • Management system is week.
Also partners can introduce or money at any time when the like.

Monday, 4 May 2015

SOLE TRADER

Sole trader is a that business which is owned and operated by one person.It is owned and management by one person but there might be any number of employees.A sole trader is fully and personally liable for any losses that the business might make.

According conventions recognise the business as a separate entity from its owner.Althow it has unlimited liability.Actually it is a small business and owner provides all financial resources.

The advantage of operating as a sole trader is flexibility and autonomy.He can operate the business in his personal will and manage the business as he likes.Also he can introduce or withdraw  capital at any time.

Saturday, 2 May 2015

GOODWILL

Parent holding(investment) at fair value....................................................xx
NCI value at acquisition.............................................................................xx

Total acquisition.......................................................................................    x
Less:
Fair value of net assets at acquisition...........................................................(xx)
Goodwill on acquisition..............................................................................    x

Thursday, 30 April 2015

BANK RECONCILATION

                                     Cash book to cash book

 Add:  
  •   Standing order
  •    Bank interest
  •   Direct debt
  •  Credited transfer entered into bank statement      
Less:
  • Dishonoured cheque
  • Bank charge 
                                           Bank to bank

  • Balance as per as bank statement 
Add:
  • Outstanding lodgement or deposit not credited or Cheques paid in but not credited 
Less:
  • Unpresented cheque or outstanding cheque  

                                                Before bank reconcilation
                                              
                                                                  Cash book given
Add:
  • Unpresented cheque
  • Bank interest
Less:
  • Outstanding lodgement
  • Bank charge 
                                         Before bank reconcilation 
                                           Bank given
Add:
  • Outstanding lodgement
  • Bank charge
Less:
  • Unpresented cheque
  • Bank interest
                                                After bank reconcilation
                                                                 Bank given
Add:
  • Outstanding lodgement
Less
  • Unpresented cheque
                                                         After bank reconcilation 
                                                                     Cash book given
Add:
  • Bank charge
Less:
  • Bank interest

Sunday, 26 April 2015

INTANGIBLE ASSET

Intangible asset is an asset which you cannot touch.It is an intangible. You can not touch in your hand, can not see .Example of intangible assets are copyright,trademark,patent,domain name, brand name etc.

Sometimes intangible assets value is far grater than tangible assets value such as goodwill.It is shown on a company's balance sheet.

DOUBLE ENTRY BOOK KEEPING

Double entry is a system where involve two account. One is debit and one is credit.For example a business got some money from his customer, the company's asset is incressed and decressed liability. we can explain it by-
                           cash---------------dr
                           recerivable-------cr

Under the double-entry system every business transaction is recorded in at least two accounts. One account will receive a "debit" entry, Another account will receive a "credit" entry.It is a foreign language.

Actually it has two effect. one is debt, meaning the amount will be entered left side and other is credit that will be enterde right sight.When debit & credit entry will be equal then account will be correct.For example- A business sell goods 500 on credit with 17% sales tax. Then accounting entry will be-
                  Receivable------------------------------------------dr  585
                       sales tax-------------------------------------------cr  85
                       sales-----------------------------------------------cr  500

We saw that every business transection effect two account.It is known as double entry book keeping.

PRESENTATION OF FINANCIAL POSITION

PRESENTATION OF FINANCIAL POSITION:
IAS 1 incorporates the recommended formats for company published accounts. The following summaries are required:
1.statement of financial position
2.income statement
3.statement of comprehensive income
4.statement of changes in equity
5.notes to the account
6.statement of cash flow.