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Financial aspects of business an overiew - Assignment Example
Finance & Accounting
Pages 8 (2008 words)
Financial aspects of business: An overview Table of Contents Table of Contents 2 Question1 3 Question 2 3 a.1) Trading Account 3 a.2) Profit and Loss Account 4 b)Balance Sheet as on 31st December 2012 4 c)Importance of double entry book keeping 4 Question 3 6 Works Cited 9 Name of the Student: Name of the Professor: Name of the Course: Date: Question1 Sole trading is the simplest form of any business structure…
For sale traders, the liability is unlimited and the personal assets can be used to repay the liabilities of the business. It is important for sole traders to maintain their accounts in order to have an idea about the performance of the business. It would enable the owner to have an idea about the present debt condition of the business. It would also enable in keeping a track on the total sales and purchases of the goods and services. It is essential to keep and maintain accounts because it helps in maintenance of transparency of the business transactions. It also reduces the existence of flaws in any decision making by the trader. Partnership business is conducting business activities together by two or more partners and earning and sharing the profit earned from the business operations. In case of partnership business, the company needs to maintain its book of accounts in order to have a clear and transparent disclosure of all the business activities to all the business partners. It would also enable assessment of profitability of the company followed by its division among all the business partners. It is very important to keep a track on all the financial transactions of the partnership business in order to maintain its stability. ...
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