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Goodwill means good reputation of a company’s business in the market. Such reputation makes popular company among its customers. Examples are Good Customer Relationships, Quality Management, etc. Is Goodwill An Intangible Asset? Goodwill is an example of Intangible No n Current Assets and it is further categorized under Indefinite Intangible No n Current Assets a nd recorded on Balance Sheet .   Now, there is no need to calculate amortization on Goodwill after 2001 changes. Impairment is charged on it. Goodwill having Useful Life upto the maximum of 40 years. Kinds / Types of Goodwill (i) Internally Created (ii) Acquired By Acquirer From Acquiree Company Goodwill, now a days, no longer be created internally but it is mostly created by purchasing another company (Acquiree) business that has valuable Goodwill in the form of Good Customer Relationships, Quality of Service, etc. How To Estimate Goodwill 1. Acquirers are willing to pay ...

Sales Returns Book is also an example of Special Journal . Here, from the point of seller o nce  the sold goods to buyer or customer ( Accounts Receivable ), then the buyer may find that some goods unsatisfactory or lower quality or goods damaged during in transit or the order is not according to the buyer’s order, then buyer sends the goods to the seller intimating him the reason of returning the goods and requesting him for replacing goods. This intimation from the buyer to the seller is called Debit N ote. In such case, if the seller accepts the request of the buyer, then he informs to the buyer by sending a Credit N ote. In this way, Sales Return takes place. The Accounting Department also receives the copy of Credit N ote and pass following Accounting Journal Entry in the Sales Returns Book or Journal of business as shown below:   Sales Returns Journal Entry                          ...

Previously, we studied about Purchase Book Format , but here will we will particularly study about Purchase Returns Book and its format. It is to be noted that Only Credit Purchases are recorded in this book because Cash Purchases are recorded in Cash Book , so Purchase Return Book is the example of Special Journal . You Can Also Read Out, “ Sales Returns Book Format ” When the goods purchased by the buyer on credit basis finds that some goods are not according to the order specified or goods are damaged or are in unsatisfactory conditions, etc, then he Debit the Supplier or Accounts Payable Account and returned the goods by sending a Debit N ote to the supplier mentioning the reasons of returning. Purchase Return Journal Entry Example:- Mr. A purchased 5 Fans for Rs. 50000 (10000 each) from Mr. B (Supplier). At the time of delivery, he found that 1 fan is not in good condition, then he debit the account of Supplier and credit ...

We already studied about “ What is a Transaction ” and “ Difference Between Capital And Revenue ” but here we will consider the 2 Types / Kinds of Business Transactions used in accounting according to the character / feature of transactions. These are Capital Transactions and Revenue Transactions. Capital Transactions have long-term effect because these can be used for long period of time or more than one year. Examples are Purchase of Furniture, Machinery, Buildings, etc are Capital Transactions. Revenue Transactions have short-term effect because these are used for short time mostly less than or equal to one year. Examples include Paid Rent Expense, Salaries Paid, Goods sold for Cash, etc. Expenditures are the outflows as our business is spending the money to get benefit in future while Receipts are receiving of the money as our business provides services to customers or sold the Assets or receive other income. As in a Business T...

The Book which is maintained for recording Small amou nt of Cash Paid. Mostly, the amount of Cash used for those Expenses which are incurred for running day to day expenses. Examples are Stationary Expenses, Travelling Expenses, etc. It is the part of Main Cash Book to reduce the burden of larger and huge amount of Cash Transactions. Only Cash Received from Chief Cashier is the Revenue that is recorded in it, otherwise, only Cash Payments are recorded in it. Petty Cash Book is a type of Special Journal . Petty Cash Book Format The format of Petty Cash Book is almost the same as that of Cash Book. There is a Debit Side And a Credit Side. You Ca n Also Find Out, " Rules of Debit And Credit Petty Cash Journal Entries Let Us Prepare Petty Cash Book for Compa ny ABC For September 2018 With the help of an Example. Suppose that: 2018 September Sep. 1. Cash Received from Chief Cashier Rs. 10000 Sep. 2. ...

The rules of Debit and Credit are the Fundamental or basic Accounting Principles for a Business Transaction under Double Entry System . When an account increases or decreases, we debit it or credit  it depending upon the Types / Kinds of Accounts . You Can Also Study, “ What is the Difference Between Debit And Credit ” Rules of Debit And Credit For Assets, Liabilities, Capital or Ow ner's Equity or Equity, Revenues or Income, Gains and Expenses, Losses As there are five types of accounts, so debit and credit rules affect on accounts differently. We will discuss about three main rules in below section. 1. First Rule, According To Characteristics of Accounts 1. For Assets , the N ormal Balance is Debit and Unfavourable Balance is Credit. At the end of Accounting Period, assets are transferred to Balance Sheet or Statement of Financial Position . Assets Increase = Debit Assets Decrease = Credit 2. For Liabilities ,...

Account Balance Example / Wha t Is Balance Amount / Accounting / Balance Brought Down Example / Balancing Off Accounts Example / Carried Down Brought Down Accounting Example / Balancing Ledger Accounts Example Previously, we studied about “ What is Ledger Balance At ATM ” and ” What is A Ledger Balance ” but here we will study to k now the answer to the question  about What is Balancing of Account or What is Accou nt Balance  in Accounting or How To Bala nce A Ledger? What is the Difference Between Debit And Credit Balance And Why It Arises? Or How To Balance A Ledger? Ledger Balance means that an account may have debit or credit balance. Debit Balance is shown on Right side of Ledger while Credit Balance is shown on Debit Side as both Debit and Credit Sides are not equal in monetary value. When we totaled Debit and Credit side of a Ledger for an account, then these sides may be greater than or less than with each other. So, Debit and Credit ...

Bookkeeping VS Accounting VS Auditing Here we will study the comparison between Bookkeeping , Accounting and Auditing. 1. Bookkeeping is concerned with recording of Business Transactions in the Book or Journal of Business. Accounting is the art of recording, classifying, summarizing and interpretation of the results while Auditing helps us to verify and check Books of Accounts and in order to ensue reliability and accuracy of Accounting Information. 2. Bookkeeping is the first and basic step which is related to recording phase of Business Transactions while accounting starts after Bookkeeping ends i.e., transferring accounting Data to Financial Statements to summarize this data and finally interprets these results to Users of Financial Statements . Auditing starts where Accounting ends. At the end of Accounting Period, The Qualified Auditor examines all the Accounting Data whether it is in Journal, Ledger or Financial Statements of the Business in...

Under Single Entry System or Si ngle Entry Bookkeeping , there is no proper maintenance of Books of Accounts . Only one aspect of Business Transactions is recorded in the Books of Accounts of Business. Which Type of Accounts Are maintained Under Single Entry System? If Debit Side of Accounting Journal Entry is recorded, then you may not find Credit Side and hence incomplete accounting records are maintained. Sometimes, we find complete Accounting Journal Entry and Accounting record. Sometime i ncomplete records are found and sometimes complete information related to an account is missing. That is why we find  only few books of accou nts which  are mai ntained  like for all accounts General Journal is prepared,  Cash  mai ntained under Cash Book ,  Accounts Receivable  mai ntained under Accounts Receivable T Account , Accounts Payable   mai ntained under Accounts Payable T Account , etc but some information is missing ...