Qualification > Commerce
Accounting HELP !!!
giraffe195:
--- Quote from: Ari Ben Canaan on May 23, 2010, 03:08:19 pm ---Long term Liabilities are NEVER subtracted in the Financed By section - you can lose marks for that.
Okay heres a question :
I have $1000 as a long term loan from a friend.
Supposing I take a further $2000 long term loan,
What affect (if any) will this have on my CAPITAL ?
--- End quote ---
They are not subtracted.. they are added. Assets-Liabilites=Capital or Capital+Liabilities=Assets. I like subtracting from the assets better.
The $2000 loan will not change your capital because assets and liabilities are changing equally. No net change. (If you get 2000 check, you will add 2000 to bank ad then subtract 2000 in the liabilities.
YNWA:
--- Quote from: giraffe195 on May 23, 2010, 07:01:35 pm ---They are not subtracted.. they are added. Assets-Liabilites=Capital or Capital+Liabilities=Assets. I like subtracting from the assets better.
The $2000 loan will not change your capital because assets and liabilities are changing equally. No net change. (If you get 2000 check, you will add 2000 to bank ad then subtract 2000 in the liabilities.
--- End quote ---
Capital Employed = Long term liabilities + Owner's Capital
So wouldn't an increase in Loan increase Capital Employed? :S
Alpha:
--- Quote from: Almostfreaking on May 23, 2010, 07:06:09 pm ---Capital Employed = Long term liabilities + Owner's Capital
So wouldn't an increase in Loan increase Capital Employed? :S
--- End quote ---
Long term loan, yes. Short term, no.
Long term loan will also increase bank or cash balance.
elemis:
--- Quote from: aangel42 on June 04, 2010, 09:13:24 am ---What topics do you guys think will be covered on Accounting Paper 2 on MONDAY, JUNE 7??? I guess Limited Liability Companies are a must?
--- End quote ---
DAMN RIGHT YOU ARE !!! ;D
elemis:
--- Quote from: aangel42 on June 04, 2010, 10:23:34 am ---lol so what else?
--- End quote ---
Prvt Ltd, Manufacturing, Partnership, some regular double entry etc.
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