Basic Accounting

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A owner of a company has decided that, in order to improve profitability a machine will be purchased that will manufacture goods for resale and reduce the cost of the purchases of stock. The cost of the machine will be £ 100,000 and finance will be required. The owner has asked you lot for advice as to different method of funding that are available and the restrictions that the finance providers will probably require in each case. THIS IS MY ANSWER can anyone give a better one: In sole proprietorship, the sources of finance are very limited. A sole proprietor cannot issue the share of his company in the market, in order to collect some funds. The owner here has very limited options. The owner can raise funds by borrowing money from his friends or relatives. Or he can apply for a loan from a bank. But for this he will have to mortgage his personal property. And this property may be taken away by the bank if the owner fails to repay the loan on time. CAN U HELP ME OUT PLEASE?

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The owner can also obtain lease financing, e.g. a capital lease which is effectively a purchase by instalments. The collateral to the finance co. is the machine. He can arrange for the lease obligation to be fulfilled in, say, 5 yrs, i.e. over 60 instalments. Every month when he pays an instalment, he has to break the instalment into 2 parts for his bookkeeping - the repayment of principal and the interest element. There has to be an interest element, cos who will allow you to take 5 yrs to pay up without charging you interest? Some countries call this a hire-purchase arrangement.

What would go under a Owners Drawing accounts in a t-accounts ledger

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In a sole proprietorship, generally, the only thing that is entered to the "Owner's Draw" account is the record of his/her withdrawals of funds from the business. The entry is recorded as follows: Debit "Owner's Draw" Credit "Cash" At year-end, however, the "Owner's Draw" account will be closed to the "Owner's Equity account as follows: Debit "Owner's Equity" Credit "Owner's Draw"

I got a job call for Monday. I have to take a 100 question test, 4 categories. Two of the categories are bookkeeping and accounting. I've looked all over the internet and have come up broke. Any suggestions? Areas: maintain general and subsidiary ledger records; post entries; balance against other records; post charges; principles and practices of bookkeeping. Here's the tough one. The job is with the City. The program used is the Municipal accounting system. I've never used it. I may be tested on that also. I wonder if I will be asked questions like "What is the basic accounting equation?" I have quite a bit of financial experience; experience with budgets, making payments, maintaining records, etc., but nothing like this. The programs I used were dedicated to the company and the work was specialized. Honestly, I'm a little nervous about the test. Thanks!

Best Answer

Go to your local library or community college and look for the Accounting 101 textbook and read it.

In basic accounting, is "salary and wage expense" considered a liability of a business in the same way "accounts payable" are?

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Why do people answer with their opinion, but make it sound like a fact, especially when they are totally wrong. It is an expense. A liability is something that is owed. It is possible to owe money to your employees (they worked this week, but have not yet been paid). In this case, there is salary expense and salary payable. When the employees get paid, the payable goes away.

What are the basic principles of accounting?

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