Accounts Production

If an arrangement is approved post-bankruptcy then the debtor can apply to the Court for an annulment of the bankruptcy order – such IVAs can only be proposed whilst the bankrupt is undischarged. If an IVA is proposed after a bankruptcy order has been made, it is now also possible to nominate the Official Receiver to be the supervisor of the arrangement. The Arrangements offered by the Official Receiver are very restricted. This type of arrangement is called a Fast Track Voluntary Arrangement and is only suitable in certain cases.

This is where the individual accounts of creditors for goods and services are kept in a single ledger. Break-EvenPoint The level of activity at which total gross profit equals total costs. BankruptA person, firm, or corporation that has been declared insolvent through a court proceeding and is relieved from the payment of all debts after the surrender of all assets to a court-appointed trustee. If a business is having difficulties collecting money owed from one of its customers it may decide to cancel the debt. This is called a write-off and the accounts would need to be adjusted for this write-off.

HISTORY OF ACCOUNTING

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A payment to a trade creditor has been entered into the purchases ledger control a/c and cash book as £1,420 instead of £1,240. Primary journals are those that cannot be entered into the accounting records in any way other than by preparing a journal i.e. they can’t be entered in any of the Books of Prime Entry e.g. Irrecoverable (Bad) Debts, Depreciation, Prepayments, Accruals and of course journals to correct errors. As Emily hasn’t been paid straight away, she needs to record that Adam will pay her in 14 days’ time instead.

I can’t open a period

This system provides a clear audit trail since all transactions are clearly documented. In addition, the double entry system makes it easy to post accounting journals. This process involves recording transactions to the correct accounts and ensuring that the debits and credits are equal. Debit
Debit is an accounting and bookkeeping term that comes from the Latin word debere which means “to owe.” The opposite of a debit is a credit. A debit can be either a positive or negative entry to an account depending on what type of account is being debited. Asset and expense accounts increase in value when debited, whereas liability, capital, and revenue accounts decrease in value when debited.

• If an imbalance occurs, it may indicate that you have corrupt data.
• Once the sinking fund reaches the same value as the other account, both can be removed from the balance sheet.
• Accounting concepts and principles are set of logical ideas and procedures that guide the accountants
  in recording and communicating economic information.
• It need not be material to every stakeholder, but it must be material to a stakeholder before it merits inclusion.
• → The journal is the accounting record where the business transactions are first recorded through the journal entries.

Audit TrailA register of the details of all accounting transactions. This register shows how a transaction was dealt with from start to finish. AuditorA person qualified to inspect, correct and verify business accounts. AssetsGenerally, an asset is something that is of value to a company. An asset can then be broken down further into Tangible and Intangible assets. Accruals ConceptThe accruals concept is that profit is the difference between revenue and the expenses incurred in generating that revenue.

number of his shares.

Reducing Balance Depreciation Method
The other method of accounting for depreciation is called Reducing Balance. The asset is not reduced by the same fixed amount each year but instead by a fixed percentage, which is calculated on the asset balance at the end of each year once depreciation has been applied. Clearing
The process by which amounts bookkeeping for startups paid by cheque from an account in one bank are transferred to the bank account of the payee. Sometimes a company will change the number of shares in issue by capitalising its reserve. In other words,it can convert the right of the shareholders because each individual will hold the same proportion of the outstanding shares as before.

This is a legal requirement, and should not be confused with a cash flow forecast. This removes the need to post an invoice onto the purchase ledger and the transaction is entered through the cash book. Using incomplete records cannot give an accurate set of accounting period end financial statements, as they do not tell the whole story. There is no record of outstanding debtors or creditors, or of stock. No analysis of what receipts and payments have been received and paid, or, in some cases, of the split between revenue and capital items. As an example, if you’re the owner of a tech start-up then it might seem obvious to go straight onto accounting software.