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Accountancy 1

Accountancy 1
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  C ONTENTS Foreword iii   Chapter 1Accounting for Not-for-Profit Organisation1 1.1Meaning and Characteristics of Not-for-Profit1Organisation 1.2Accounting Records of Not-for-Profit Organisations2 1.3Receipt and Payment Account4 1.4Income and Expenditure Account12 1.5Balance Sheet17 1.6Some Peculiar Items211.7Income and Expenditure Account based on Trial Balance38 1.8Incidental Trading Activity40  Chapter 2Accounting for Partnership : Basic Concepts64 2.1Nature of Partnership64 2.2Partnership Deed66 2.3Special Aspects of Partnership Accounts68 2.4Maintenance of Capital Accounts of Partners68 2.5Distribution of Profit among Partners732.6Guarantee of Profit to a Partner88 2.7Past Adjustments932.8Final Accounts95 Chapter 3Reconstitution of a Partnership Firm – Admission115of a Partner 3.1Modes of Reconstitution of a Partnership Firm1153.2Admission of a New Partner116 3.3New Profit Sharing Ratio117 3.4Sacrificing Ratio119 3.5Goodwill122 3.6Adjustment for Accumulated Profits and Losses144 3.7Revaluation of Assets and Reassessment of Liabilities1453.8Adjustment of Capitals1513.9Change in Profit Sharing Ratio among the161Existing Partners   Chapter 4Reconstitution of a Partnership Firm –176Retirement/Death of a Partner 4.1Ascertaining the Amount Due to176 Retiring/Deceased Partner 4.2New Profit Sharing Ratio177 4.3Gaining Ratio178 4.4Treatment of Goodwill182 4.5Adjustment for Revaluation of Assets and Liabilities192 4.6Adjustment of Accumulated Profits and Losses194 4.7Disposal of Amount Due to Retiring Partner1954.8Adjustment of Partner’s Capital204 4.9Death of a Partner210  Chapter 5Dissolution of Partnership Firm226 5.1Dissolution of Partnership226 5.2Dissolution of a Firm227 5.3Settlement of Accounts229 5.4Accounting Treatment230  viii    T  here are certain organisations which are set up  for providing service   to its members and the  public in general. Such organisations include clubs,charitable institutions, schools, religious organisations, trade unions, welfare societies and societies for the promotion of art and culture. These organisations have service as the main objective and not the  profit as is    the case of organisations   in business. Normally, t  hese organisations do not undertake any business activity, and are managed by trustees who are fully accountable to their members and the society for the utilization of the  funds raised for meeting the objectives of the organisation. Hence, they also have to maintain  proper accounts and prepare the financial statement which take the form of Receipt and Payment  Account; Income and Expenditure Account; and Balance Sheet. at the end of for every accounting  period (normally a financial year).This is also a legal requirement and helps them to keep track of their income and expenditure, the nature of which is different from those of the business organisations. In this chapter we shall learn about the accounting aspects relating to not-for-profit organisation. 1.1Meaning and Characteristics of Not-for-ProfitOrganisation Not-for-Profit Organisations refer to the organisations that are for used for the welfare of the society and are set up as charitable institutions   Accounting for Not-for-Profit Organisation 1 L  EARNING  O BJECTIVES  After studying this chapter,you will be able to; Explain the meaning and characteristics of accounting not-for-profit organisations; ãIdentiy the need for, and nature of accounting records relating to not-for-profit organisations; ãList the principal financial statements prepared by not-  for-profit organisations and explain their nature; ãPrepare the Receipt and Payment Account from a  given date; ãExplain the procedure of   preparing the Income and Expenditure Account from a  given Receipt and Payment  Account and some additional information; ãDistinguish between the Receipt and Payment  Account and the Income and Expenditure  Account; ãPrepare Income and Expenditure Account and Balance Sheet from a given Receipt and Payment  Account and the relevant additional information; ãExplain treatment of certain  peculiar items of receipts and payments such as subscriptions from members,special funds, legacies, sale of old fixed assets, etc.
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