haibe:

Let's look at it this way: A construction company which employs people to construct car canopies for their customers(individuals, organizations) monthly and then are paid for their services in form of wages and salaries by their customers(individuals,organizations), since those employees work in the name of the company, it would imply that the wages and salaries received from the customers(individuals, organizations) would be going into the company's account as income with a credit balance and not to the pocket of the employees, of course the employee would be paid their own wages and salaries too by the company which will now be an expenses to the company with a debit balance.

So we have 2 wages and salaries here, the former is an income(credit balance) while the latter is an expenses(debit balance).

Perhaps that's the situation @timwezzb's question is on(the former wages and salaries), so i think the wages and salaries in his case should be treated as an income in the P and L a/c.

Still waiting for other contributors.

wit regards 2 d question asked,I seem 2 agree wit haibe...though dis case is very rare...however if it is accrued,it will b stated in d additional information.

hyzich:
You are welcome sir,
Your contributions are greatly welcomed

huh? am a lady

hyzich:
You are welcome sir,
Your contributions are greatly welcomed

huh? am a lady

nabsprada:

huh? am a lady

huh? am a lady

Lol, alright

nabsprada:

wit regards 2 d question asked,I seem 2 agree wit haibe...though dis case is very rare...however if it is accrued,it will b stated in d additional information.

Yes its a very rare case, that's why i was a bit confused when the question was asked

How do U Treat a Debit when it has been writting Off and litter on the debtor come to pay for the debit Own by Him??

timwezzb: How do U Treat a Debit when it has been writting Off and litter on the debtor come to pay for the debit Own by Him??

Am not sure of this one but when a debtor pays back, i think you have to credit the bad debt expense account and debit the debtors/account receivables a/c.

Why i think so is because when a bad debt is written off, the accounting entry should be to debit bad debt account(expense) as increase in expense and credit the debtors/account receivables(asset) as a decrease in asset

So when the debtor comes to pay, i think those accounts should be reversed, that is, they should be credited and debited respectively. or simply open a bad debt recoverable and credit it in your profit and loss account.

In a situation wher allowance/provision for doubtful debt have been created, then i think the entry will be to debit debtors/account receivables and credit allowance/provision for doubtful debts.

So i think it depends on how the organization makes the provision for bad debt and the possibility of it being paid back.

Then the recovery of the debt should be recorded to by debiting cash/bank and crediting allwance/provision for doubtful debt account.


What's your own take on it? Because am not sure on this.

haibe:

Am not sure of this one but i think you have to credit the bad debt expense account and debit the account receivables a/c.

Why i think so is because when a bad debt is written off, the accounting entry should be to debit bad debt account(expense) and credit the account receivables(asset)

So when the debtor comes to pay, i think those accounts should be reversed, that is, they should be credited and debited respectively.

In a situation wher allowance/provision for doubtful debt have been created, then i think the entry will be to debit account receivables and credit allowance/provision for doubtful debts.

So i think it depends on how the organization makes the provision for bad debt and the possibility of it being paid back.

Then the recovery of the debt should be recorded to by debiting cash/bank and crediting allwance/provision for doubtful debt account.

One thing i know is that if a debtor comes to pay back his debt which as been written as bad, the entries won't affect the net profit of that year.

What's your own take on it? Because am not sure on this.

I will shed more light on both questions later

salex66: I will shed more light on both questions later

thanks bro, would be expecting. .

timwezzb: How do U Treat a Debit when it has been writting Off and litter on the debtor come to pay for the debit Own by Him??

did u get an answer to ur previous question? ??

I am waiting for admission but i want to know if it is advisable to start buying accounting text books now that i have small money or is it the school that will specify the type of text books that'll be needed?
If i am to start buying please can someone list out the text books i'll need for 100 level.

Allen kee: I am waiting for admission but i want to know if it is advisable to start buying accounting text books now that i have small money or is it the school that will specify the type of text books that'll be needed?
If i am to start buying please can someone list out the text books i'll need for 100 level.

of course there will be recommended textbooks but you still have to get some now in order to prepare ahead.


check the previous page for the suggestions I made.

Gud day peepz loveli thread here

timwezzb: How do U Treat a Debit when it has been writting Off and litter on the debtor come to pay for the debit Own by Him??

i think it should be credited 2 the p&l as bad debt recovered

haibe:

thanks bro, would be expecting. .

normally if debt is written off it will b debited to p&l a/c nd credited to debtors a/c.By doing that;balance on debtors a/c will be reduced.If it happens dat the debtor pays back the debt;it will be debited to bad debt recoveable a/c nd credited to p&l a/c.It has become non-operating income to the coy.

salary and wages can be on Cr side of trial balance in rare ocassion.If it occurs;it will b treated as non-operating income to the coy.For instance;a. group of chartered accountant may decide to trade on phone accessories and also render financial services to small retail outlets who know them personally as chartered accountants.It should be noted that d sole aim of d coy is trade on phone accosseries which is being registered under CAC nd any income from it is operating income.If d coy is to prepare her P&L a/c at d end of her accounting period;it will go thus:Gross profit-operating expenses+non-operating income (salary&wages received from retail outlets for financial services rendered to them during d year)=EBIT

salex66:
it will go thus:Gross profit-operating expenses+non-operating expenses(salary&wages received from retail outlets for financial services rendered to them during d year)=EBIT

why +non operating expenses, shouldn't it be non operating income?

haibe:

why +non operating expenses, shouldn't it be non operating income?

thanks bro.I have modified the post.It is non-operating income.

salex66: normally if debt is written off it will b debited to p&l a/c nd credited to debtors a/c.By doing that;balance on debtors a/c will be reduced.If it happens dat the debtor pays back the debt;it will be debited to bad debt recoveable a/c nd credited to p&l a/c.It has become non-operating income to the coy.

thanks for the explanation.

salex66: salary and wages can be on Cr side of trial balance in rare ocassion.If it occurs;it will b treated as non-operating income to the coy.For instance;a. group of chartered accountant may decide to trade on phone accessories and also render financial services to small retail outlets who know them personally as chartered accountants.It should be noted that d sole aim of d coy is trade on phone accosseries which is being registered under CAC nd any income from it is operating income.If d coy is to prepare her P&L a/c at d end of her accounting period;it will go thus:Gross profit-operating expenses+non-operating income (salary&wages received from retail outlets for financial services rendered to them during d
year)=EBIT

exactly how it should be, thanks.

Accouting rule is that: debit all '' Assets & Expenses'', and credit '' Income & Liabilitie. Since salarie and wages is on d credit side, d 1st thing to do is to check if d debit and credit side of d trial balance balances, if no, check d difference and find out if it did equates with figure of d wages and salaries, then u should know it is an error. But if yes meaning it balanced, it should be assumed that the salarie and wages is received, meaning it should be an income which is 100% possible, what it implies is that d company has used its personel to render services to another entity which in turn has paid salaries and wages to the company, as such it could appear on d credit side of d trial balance. The company could be an out sourcing company that employs personels and send them to another company to work ( eg, banking jobs, security jobs ), the personels dont receive their salaries from where they work but from d company which out sourced them, the company in turn pays d employees. Lets take a good look at FEDEX staff working in UBA plc mailing room, UBA pays salaries and wages to FEDEX, as such u will find it(salaries and wages) on the credit side of FEDEX trial balance which signifies income, while in UBA plc, it (salaries and wages) will be on the debit side of their trial balance, which has satisfy d golden rule of account (every debit entry ( UBA) must have a corresponding credit entry ( FEDEX).


Samotology
( ESUT Accounting )

Samotology: Accouting rule is that: debit all '' Assets & Expenses'', and credit '' Income & Liabilitie. Since salarie and wages is on d credit side, d 1st thing to do is to check if d debit and credit side of d trial balance balances, if no, check d difference and find out if it did equates with figure of d wages and salaries, then u should know it is an error. But if yes meaning it balanced, it should be assumed that the salarie and wages is received, meaning it should be an income which is 100% possible, what it implies is that d company has used its personel to render services to another entity which in turn has paid salaries and wages to the company, as such it could appear on d credit side of d trial balance. The company could be an out sourcing company that employs personels and send them to another company to work ( eg, banking jobs, security jobs ), the personels dont receive their salaries from where they work but from d company which out sourced them, the company in turn pays d employees. Lets take a good look at FEDEX staff working in UBA plc mailing room, UBA pays salaries and wages to FEDEX, as such u will find it(salaries and wages) on the credit side of FEDEX trial balance which signifies income, while in UBA plc, it (salaries and wages) will be on the debit side of their trial balance, which has satisfy d golden rule of account (every debit entry ( UBA) must have a corresponding credit entry ( FEDEX).


Samotology
( ESUT Accounting )

Perfect answer giving another situation where salaries and wages can be received by a company as income.

But I think I have a problem with the bolded part, the fact that the salaries and wages of FEDEX and UBA is on the credit and debit side of their trial balances respectively does not mean the double entry has taken place, the double entry should take place in each of the company's a/c and not in a mixed sense.

So the double entry for FEDEX ltd should be:

DR. cash/bank a/c (increase in asset)
CR. salaries/wages a/c (decrease in expense)
Being cash received for salaries/wages

DR. salaries/wages a/c (increase in expense)
CR. cash/bank a/c (decrease in asset)
Being cash paid for salaries/wages

Then that of UBA should be:

DR. salaries/wages a/c (increase in expense)
CR. cash/bank a/c (decrease in asset)
Being payment for salaries and wages

The second entry would depend on whether UBA also receives salaries/wages like FEDEX ltd.

But if both companies have salaries and wages as a credit balance in their trial balance, it would mean that they received more salaries and wages than they paid to employees, so the fact remains that salaries and wages usually have a nominal debit balance and therfore an expense but for certain reasons, the salaries and wages account might end up having a credit balance if the credit side of the account is greater than the debit side,this credit balance is then what is brought to the trial balance as salaries and wages figure, for example a company receiving more salaries and wages than paying it, the trial balance will show salaries and wages on the credit side(its a very rare case though and so not usually expected)

Does anyone know if U.S.A has adopted I.F.R.S?? I heard some time ago that they refused to.

what can 1 do wit accounting b.sc(ed) in Nigeria's labour market apart 4rm teaching

Hello my fellow charted accountant,realy love our contribution keep it on.kudos to all of you.remeber witout the service of an accountant the company is useless.truly we are the back bone of any society.what a profession body is this!am proud to be an accounting student

House let discuss ifrs.

D question is straight,wen given such kind of question,d 1st tin 2 do is 2 make d possible adjustment..i.e,d arrears,prepaid,advance etc... must b solved be4 postin it.......in mani question av seen,such like diz r normally are treated in d P/L acct..

nsidible: what can 1 do wit accounting b.sc(ed) in Nigeria's labour market apart 4rm teaching

If you love teaching, then its a good idea to go for accounting edu, if not just study accountancy(bsc), i think that of edu is "BA".

But it doesn't matter, if you are a good accounting student, you can still get employed in the labour market even though the chances may be slim, just prove you know what it takes.

Double post

NEED FOR ACCOUNTING THEORY KNOWLEDGE.

Many students of Accounting are often of the
believe that they do not need to study
Accounting Theory.A cross section of this set of
students is of the opinion that since Accounting
Practice is based on Established Principles and
Techniques that are Derived from Standards
(Accounting Standards),set by Superior Bodies
often Referred to as
Regulatory and Professional bodies;thus,they do
not have to study or familiarise themselves with
the study.

However,Accountants in Practice,recognise
the need for a good understanding of the
course,as they are now faced with more complex
or changing business environment-that renders
previous standards almost useless(obsolete).To
the Auditors,it is a general believe that while an
Accountant need not know Auditing(the
independent examination of,and an expression of
opinion on the Financial Statements of an
Enterprise,by an appointed Auditor,in Pursuant
of that Appointment,and in Compliance with
other relevant Regulatory
reguirements),an Auditor needs to know
Accounting(an art of Recording, Classifying, and
Summarising in significant manner and in terms
of money,Transactions and Events that are
atleast,in part of Financial character and the
Interpretations of the Results
thereof..AICPA).It is non-negotiable that an
Auditor needs to acquire a good knowledge of
Accounting since he can not give his opinion
(either to collaborate or contradict the
Assertions inherent in the Financial Statements)
on what he has no knowledge of.Hence,he needs
to know the basis behind the Preparation and
Presentation of the Financial
Statements;adopted by the Accountants.No
wonder the Axiom-''You Can Not Give What You
Do Not Have''. Hence, while it is paramount for a
practising Accountant to have a good
knwowledge of Accounting Theory,the Auditors
too, need have a good foundation of Accounting
via Accounting Theory.As this will enable the
Auditors function well in their field.
If Accounting Students,and all lovers of
Accounting must fit into this dynamic business
environment,it is apparently that,students of
Accounting and lovers of Accounting,all need to
get themselves equiped with a good knowledge
of Accounting Theory.Many believed that since
Accounting Practice is based on Established
Principles and Standards,they need not Theorise
(an act of developing a Logical Reasoning
Characterised by a body of Principles that form
the general frame of Reference,with which
Accounting Practice(current Accounting
Practice) can be evaluated,and guide in the
Development of new Accounting Standards.This
view portrays Accounting Profession as a
static, monotonous, and boring discipline.This
perception of Accounting,partronise Accounting
as a mere Activity geared towards Preparing
Minds to becoming Accountants.It views
Accounting as a non-dynamic discipline,and
assume a static business environment,as opposed
to the Real world Environment of Business.
Obviously,Accounting is never a Monotonous
exercise as to be the Summation of Debits and
Credits,as perceived by
many.Hence,stakeholders in Accounting need to
Familiarise themselves with Theoretical
Knowledge of Accounting.Among others,below
are points on the importance of Accounting
Theory;

THE NEED FOR A GOOD KNOWLEDGE
OF ACCOUNTING THEORY
As stressed above,the importance of
Accounting Theory can not be over emphasised
nor Estimated,its importance are as follows:

1.The study of Accounting Thoery will correct
the wrong believe of Accounting to be a
monotonous and boring exercise;

2.It will bring to right,the wrong conception of
Accounting as a summation of Debits and
Credits,by introducing Students to the
techniques behind every Accounting Treatment;

3.Enable Accountants perform their
work Skillfully and Flawlessly;

4.The Accountants not only perform their
work effectively,but also help others do the
same;paving way for efficiency of personnels.

5.Accountants,fully equiped with Theoretical
Knowledge can supply crutial information to the
management at the right time and at the lowest
cost possible.This in turn is expected to lead to
an inflow of Resources embodying Economic
Benefits to the Entity.

6.The Business Environment is very
dynamic,hence,only an Accountant with a good
knowledge of Accounting Theory can do better
in this Real Business World;as he can use
judgement(unbiased) in dealing with emerging
Business World.

7.Since,the Real Business Envrinment is
Expected to be very dynamic,a single Accounting
Treatment can not,and is not expected to
quarantee fair Preparation and Presentation of
Financial Statements. Hence,only an Accountant
with a good understanding of Accounting Theory
can Select Accounting Treatment that would
best depict the economic reality at the reporting
period.

8.Asset and Liability Valuations can not be best
valued without the Expertise Experience of an
Accountant with superb understanding of the
aspect of Accounting Theory,that deals with the
Recognition,Measurement and Recording of
these Elements of the Financial Statements.

9.Governments,Investors,Creditors.Shareholders
and other Stakeholders in businesses recognise
the importance of Accountants who know
theory,than those who do not.Hence,creating the
avenue for a more market for this set of
Accountants.

10.Only Accountants with a great
understanding of Accounting Theory can detect
flaws both in the Preparation and presentation
of Financial Statements,as well as defects in the
Accounting system of the Entity;ensuring an
efficient Internal Control System.

11.Many a time,Entities do need to do a
reasonable and legal management decision
making and reporting,that will ensure a stable
and predictable Financial Results
(Creative Accounting and
Earnings Management),paving way for increased
market value of their shares, encouraging
Investment in its Equity.and improving
management image at the Annual General
Meetings of Companies.This arises as Reported
Financial Results match-up with Financial
Analysts' forecasts,limiting the negative
reaction of these stakeholders, regarding
fluctuations in Financial Reports.

Only an
Accountant with substantial knowledge of
Accounting Theory could do this.
It follows that a good understanding of
Accounting theory is paramount for a good
practice of Accounting.This statement finds its
strenght in the fact that no Practice is in
isolation of a Prior Theorisation.Since Theory
and Practice have Causal Effect-none can exist
without the other,then,for a good Accounting
Practice,a Proper Prior Theorisation is
needed.Needless to point out that Accountants
who know the genesis of Accounting Practice
(accounting theory),do better than Accountants
that do not.

http://icansubset..com

salex66: House let discuss ifrs.

What do you think, is the adoption of Ifrs really a good idea ??

Any diff between accounting and accountancy

@elgaitan, accounting has different meanings, and in one sense refers to the process of keeping or maintaining financial records; while accountancy is more like the profession of an accountant.

So accountancy is the work done by an accountant or profession while accounting is the activity or process of maintaining financial records and interpreting them for the users of the financial information.

But still, they are sometimes used interchangeably