ACCOUNTS

[Ebby_SaLeem]

One of my tutor said that all the items under current assets can be easily turned into cash except inventory. Is that the reason y quick acid test ratio is better than current ratio. Is this correct?

Exactly! Some accountants say that an asset is most liquid if its converted into cash with 20 days which is simply not the case with inventory... so its not a liquid asset and therefore deducted from current assets to find current ratio!

 

[Sarah Paul]

Exactly! Some accountants say that an asset is most liquid if its converted into cash with 20 days which is simply not the case with inventory... so its not a liquid asset and therefore deducted from current assets to find current ratio!

Oooooh thankyou for all your replies it was really really helpful

 

[tazzzy]

Short notes on goodwill please?

simple way to figure out the goodwill of the business is to subtact networth of the business form the purchase price of the business...like business selling price is 1500 and the worth of business is 1000 so the goodwill of the business will be 500...

 

[Sarah Paul]

PLZ TELL P1 MEI CREDIT NOTE LIKHA THA YA DEBIT NOTE..????TRYING TO REMEMBER THE CONCEPT...

Actually i cant understand what you are telling. Can u please translate into English please?

 

[Sarah Paul]

simple way to figure out the goodwill of the business is to subtact networth of the business form the purchase price of the business...like business selling price is 1500 and the worth of business is 1000 so the goodwill of the business will be 500...

Yeah thankyou. I have no problem in calculating but problem is wen i do the t account format. Can you please explain the T Accont if you dont mind

 

[tazzzy]

Actually i cant understand what you are telling. Can u please translate into English please?

what did u write in acccounts p1.. in the question about the source document....debit note or credit note????

 

[tazzzy]

Yeah thankyou. I have no problem in calculating but problem is wen i do the t account format. Can you please explain the T Accont if you dont mind

to create goodwill....debit the goodwill account and credit the capital account this is done on the old ratio .....nd when goodwill is to written off debit capital account and credit goodwill account ,this is done on the new ratio provided..

 

[Ebby_SaLeem]

what did u write in acccounts p1.. in the question about the source document....debit note or credit note????

debit note

 

[Sarah Paul]

what did u write in acccounts p1.. in the question about the source document....debit note or credit note????

Im not quite sure i think i wrote debit note

 

[tazzzy]

Im not quite sure i think i wrote debit note

thnks ..

 

[tazzzy]

t

debit note

thnks ...

 

[Sarah Paul]

t
thnks ...

Wat was yours

 

[Sarah Paul]

And your welcome

 

[tazzzy]

Wat was yours

unable to remeber but i think i also worte debit note...as i reviewed some of the source documents before going in the examination hall...

 

[Sarah Paul]

unable to remeber but i think i also worte debit note...as i reviewed some of the source documents before going in the examination hall...

YAY!!! Gimme a hi5

 

[tazzzy]

YAY!!! Gimme a hi5

hi5....

 

[tazzzy]

how did the paper go?? were u able to balance the balance sheet

 

[SamiaSaad]

how did the paper go?? were u able to balance the balance sheet

Yes

 

[Sarah Paul]

how did the paper go?? were u able to balance the balance sheet

Y^ea it balanced

 

[Bachelor]

Current assets less stock (closing stock) divided by current liabilities

thats becouse prepayment is money whch u have given in advance so u cant get it nor turn it in to cash quickly thats y they deduct it from quick acid ration just like closing stock..