Interest on Capital
Interest allowed on the proprietor’s, partners capital is some times treated as a business expense.If the amount of capital were invested outside the business it would have earned a normal rate of interest.Therefore allowance is sometimes made for this interest  before the actual net profit of the business is ascertained. For example,before charging interest on… (3 comments)

Bad debts and its accounting treatment
Many business offer credit facility to its customers in order to overcome the competition and increase its sale and there by revenue. Giving credit to its customers often leads to a negative result such as non payment of dues from customers.After lot of efforts to collect the outstanding amount from customers business will get to know… (0 comment)

Preliminary expenses and its Accounting
The expenses incidental to the formation of  a  company are termed preliminary expense.The cost of printing and circulating the memorandum and articles of association and prospectus ,the registration charges and stamp duties, the printing or share certificate,legal charges are included under preliminary expenses. Preliminary expense are a sort of capital expenditure which may be written… (0 comment)

What is contra entry?
Contra entries are those entries in which same account can be debited and credited in contrary situation.For example we debit Bank account when depositing cash.At the same time we credit bank account when withdrawing money from bank. In manual accounting Contra entry is recorded in the journal by marking (C) in the Particulars column after ledger name.… (2 comments)

What is accrual? How it is accounted?
Accruals are the earnings of Income and incurred expenses which are not accounted in our books of accounts so far.Accruals are those expenses and earning which are recorded through adjusting entries in the books even if payment is made or received at the time accounting. A few examples can understand you the accruals better. Why Accrual Accounting? Accrual… (0 comment)

Definition of Accounting
Definition of Accounting “Accounting is the art of recording ,classifying and summarising in a significant manner and in terms of money,transactions and event which are, in part at least ,of a financial character and interpreting the result thereof “. Accounting is the Language of Business. Accounting Terms are used to explain things happening int he business.… (0 comment)
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