Partner’s Capital Account- This account records only the opening capital balances and the closing capital balances of the partners. Besides this, it also records those transactions that are related to introduction and withdrawal of capital. The introduction takes place in form of bringing in of fresh capital by the partners, while withdrawal of capital happens in form of drawings out of capital.
If fresh capital is introduced during an accounting year, then it is credited to the Partners’ Capital Account as ‘Cash/Bank Account’. On the other hand, if any capital is withdrawn by the partners, then it is shown on the debit side of the capital account as ‘Cash/Bank Account’. No other transactions such as, Partners’ Salary, Interest on Partners’ Capital, Commission, etc. is recorded in this account. This account always end-up showing credit balance as ‘Balance c/d’, which is shown on the Liabilities side of the Balance Sheet of the Partnership firm.
The balance sheet is the last financial statement that is prepared by any organization. This statement helps to ascertain the true financial position of an enterprise at the end of an accounting period
Profit and Loss Account
A profit and Loss Account is the second financial statement prepared by an organization. This account is prepared to ascertain the net results of a firm in form of net profit earned or net loss incurred during an accounting period.
Accounting software is an integral part of the computerized accounting system. The accounting software should be selected after considering the level of skill and proficiency of the accounting professionals.
What are Accounting Reports?
Accounting Reports: When the collected data is processed and manipulated in a useful sense that can be understood by the users without any ambiguity, then it becomes information.
Transaction Processing System
Transaction Processing System (TPS) refers to a computerized system that records, processes, validates, and stores routine transactions that occur in various functional areas of a business on daily basis.