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close this book Accounting for the microbusiness a teaching manual - A Handbook for Volunteers
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View the document Acknowledgement
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View the document The financial statements
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View the document Odd entries
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Odd entries

 

OBJECTIVES:

To stimulate creativity in the application of entries and accounts when applying odd transactions.

MATERIAL AIDS:

Aids 35, 36.

PROCEDURE:

 

1.

Dividing Profits among more than one owner.

 

1.1 If owners take cash from the company on a monthly basis, expense the amounts from profits. Instead of "Personal Expenses" an account called "Owners Expenses" would be used.

 

1.2 If owners reinvest their profits, a liability account for "owners profit" should be opened. This might include an individual account and summary control section. The entries would be a debit to "Owners Expenses" and a credit to the "Owners Profits" account. No cash is interchanged.

2.

Passing postdated checks from clients to suppliers.

 

2.1 Credit "Payments from Clients" Column and debit "Payments to Suppliers" Column. Then make similar entries in the Individual Account and Summary sections of the Credit Books.

 

2.2 Again, no cash is passed.

3.

Aid 35. Paying Workers or Creditors with product instead of cash.

4.

Aid 36. Another auxiliary method to organize accounts receivable when clients make payments in advance.

 

4.1 To be used only when student cannot master traditional approach.

 

4.2 Offers individual client control without a summary.

 

4.21 Individual section for those who have advanced money.

 

4.22 Individual section for those who owe money.

 

4.23 Must add up individuals debts at end of month.

 

4.3 Must organize Account Book accordingly .

 

4.31 Those who advance become liabilities listed among accounts payable.

 

4.32 The list of debtors is the accounts receivable