Week one lesson:
subject: Book keeping
class: SS one
Topic: Classification of Accounts
Introduction: An account can be defined as a record in a double entry system that is kept for each class of asset, liability, revenue and expense. Accounts can be classified into:
(I) personal account
(ii) Impersonal account.
(I) personal Accounts: These are accounts for the names of individuals, firm and business enterprises e.g. Chioma account, Unstoppable Nig. Ltd accounts, Debtors and Creditors account.
II) Impersonal Accounts: These are accounts for properties, item of expenditures and income. It can be divided into two namely: (a) Real accounts: These are accounts for something we can see, touch or move. They are accounts for assets e.g. land and building account, machinery account, etc. (b) Nominal Accounts: These are for expenses incurred, income received, losses and gains e.g. rent account, discount received account, discount allowed account, insurance and interest accounts. Definition of a ledger. The ledger is the final destination of all transactions in the subsidiary books. It is most important Book of account. The ledger is used for the double entry book keeping. Division of the Ledgers. The classifications are as follows: (a) personal Ledgers (b) General Ledgers (c) private Ledgers (d) purchases or creditors Ledgers (e) Sales or debtors Ledgers (f) Nominal Ledgers. Summary: The ledger account is divided into two parts by a central line. The left side is the Dr side and the right side is the Cr side. The Dr side is the side that receives value and the Cr side is the side that gives values. The ledger has columns for date, particulars, folio and amount on the Dr and Cr sides.
Answer all the questions in page 30 to 32 of your accounting and book keeping work book. I will inform you when to submit the assignment.
You will be informed when to submit your assignment. For further clarification contact : 08062433021
Week one lesson
Subject: Book keeping
Topic: Revaluation Account
Introduction: Revaluation simply means the adjustment of the net book value of assets to reflect the current economic value of such assets. Revaluation of assets occurs in any of the following circumstances:
(a) Admission of a new partner
(b) When a partner retires (c)
Changes in the profit sharing ratio
Reasons for Admission:
1. The partnership may need more fund to be injected into the business.
2. To replace retiring partner (s).
3. To bring in Goodwill into the partnership business.
4. To eliminate competition. The assets of the business may be revalued to show the current value. It is pertinent to state that experts may be employed to revalued the assets to show the current replacement value. Revaluation of assets is necessary because some assets may have appreciated in value whilst others may have been over or under depreciated. A Revaluation account must be opened and difference in values are posted. When there is increase in assets value, the Revaluation account will be credited. Any decrease in value of asset will be debited to the Revaluation account. ENTRIES IN BOOKS OF ACCOUNT. A. Open a Revaluation Account: I. Debit: Assets account; Credit: Revaluation account-: with increase in value of assets. II. Credit: Assets account; Debit: Revaluation account-: with reduction in value of assets. III. Debit: Revaluation account; Credit: Liabilities account-: with increase in value of Liabilities. IV. Credit: Revaluation account; Debit: Liabilities account. B. Introduction of Goodwill: Debit: Goodwill account; Credit: Revaluation account. C. Transfer any profit on Revaluation to the old partners capital account: Debit: Revaluation account; Credit: Capital account-: in the old profit sharing ratio. In Revaluation of assets, the following accounts will be prepared: (a) Revaluation account (b) Capital accounts of partners (c) Balance sheet.
Assignment: The balance sheet of Maryrose, Chidera and Doris as at 31st December 2015. Assets: Building #16000, premises #7100, fittings #2620, stock #4080, Debtors #9060, Bank #2780. Capital: Maryrose #19120, Chidera #12840, Doris #9680. The partners have always shared profits and losses in the ratio: 2:3:1. They agreed to alter the profit sharing ratio. The assets were revalued as follows: Building #35000, premises #5200, fittings #2180, stock #3789. You are required to show the following accounts: a. Revaluation account; b. Capital account; c. Balance sheet as at 1st January 2016.
Download here ss 2 account notes (wk one)
Submit the assignment on Monday 18th May at the security post. Show all workings
For further clarification contact : 08062433021