Accounting

ACCOUNTING (I.COM. PART-II)
9. Working life of an asset:
The period during which an asset will help earning income of business. 19. Scrap value of an asset:
The price at which an asset will be sold at the end of its working life. It is also known residual value or break up value.
11. Market price of an asset:
The price at which an asset can be sold in the market is called mark price.
Fixed installment method of depreciation:
Under this method depreciation of an asset will be equal in each accounting year. 13, Reducing balance method:
Under this method depreciation is calculated on the book value of an asset. : -, Amortization:
The decrease in the value of intangible assets such as patents, copy rights, goodwill etc. 15. Fixed assets:
Assets which have long life and which are bought for use for a long period of time are called fixed assets. These are not bought for selling purposes e.g. land, building, machinery, furniture etc.
Tangible assets:
Assets which have physical existence and which can be seen, touched and felt are called tangible assets e.g. building, machinery, furniture etc.
Intangible assets:
Assets which have no physical existence and which cannot be seen, touched but can be felt are called intangible assets e.g. goodwill, patent right, trade mark etc.
• Wasting assets:
Assets whose value gradually reduces on account of use and finally exhausts completely are called wasting assets, e.g. mine, forest etc.
Partnership
According to partnership act 1932, "the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all".
Essential of partnership:
The following are the essential elements of partnership:
There must be an agreement entered into by all the persons concerned.
The agreement must be to share the profits of a business.
The business must be carried on by all or any of them acting for all,
Partnership agreement:
The agreement among the partners which sets out the terms on which they have agreed to form a partnership is called partnership agreement.