Partnership concepts

The GAAP Principle Matching is ........

• Fixed assets are recorded and will remain at their original cost.

• Information that is not important or will not affect decision making will not be recorded separately.

• The financial information must be reflected in the most conservative way.

• Incomes earned, and expenses consumed during a particular financial year are recorded in the Financial Statement for that year.

Accrued Income is referred to as.........

• the income that is earned but not yet received.

• income which is to be earned in the next financial year.

• expenses that a business incurs/consumes/uses up but hasn't paid the expense yet.

• expenses that is paid for in advance but not yet incurred/consumed/used up.

An advantage of Partnerships.

• Relationship between partners

• Easy to form

• Unlimited liability

• Death of a partner affects continued operation

Identify the adjustment.......

Physical stocktake at the end of the financial period reveals consumable goods on hand/ goods UNUSED.

• Trading stock deficit

• Consumable stores on hand

• Trading stock surplus

• Consumable stores surplus

Identify the adjustment.......

Debtors owes the business money from previous credit sales.

• Bad debt

• Bad debt recovered

• Provision for bad debt

• Provision for bad debt adjustment

Identify the adjustment......

Administration expense erroneously recorded in sundry expense account

• Accrued expenses

• Prepaid expenses

• Correction of error

• Expenses paid in advance

Identify the adjustment........

A non-cash expense calculated annually.

• Accrued expenses

• Correction of error

• Prepaid expenses

• Depreciation

Identify the adjustment .......

It represents an amount set aside to provide for expected bad debts.

• Bad debt

• Provision for bad debt

• Bad debt recovered

• Provision for bad debt adjustment

Identify the adjustment.....

Interest paid for the use of a financial aid’s money.

• Interest on debtors

• Interest on fixed deposit

• Interest on loan

• Interest on creditors

Identify the adjustment....

TOO MUCH PAID

• Accrued expenses

• Income received in advance

• Accrued income

• Pre-paid expenses