Principles of Accounts Notes

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April 2018

Principles of Accounting: Example revaluation of partnership assets

By |2018-04-16T08:35:57+02:00April 16th, 2018|Notes, Ordinary Level Notes, Principles of Accounts Notes|

ZIMSEC O Level Principles of Accounting: Accounting for Partnerships: Goodwill and Partnership businesses: Revaluation of Partnership Assets

  • As already pointed out in another post, sometimes it is necessary for a partnership to revalue its assets
  • We have already looked at the entries necessary to record these changes in value
  • Now we will look at an example of how […]

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March 2018

Principles of Accounting: Revaluation of Partnership Assets

By |2018-03-20T11:25:30+02:00March 20th, 2018|Notes, Ordinary Level Notes, Principles of Accounts Notes|

ZIMSEC O Level Principles of Accounting: Accounting for Partnerships: Goodwill and Partnership businesses: Revaluation of Partnership Assets

  • It is often the case that when a business is sold the selling price of its assets would differ from their book values
  • In such instances there is either a profit or loss on the sale of the assets
  • This profit has […]

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Principles of Accounting: Example entries upon death or retirement of a partner

By |2018-03-20T09:59:44+02:00March 20th, 2018|Notes, Ordinary Level Notes, Principles of Accounts Notes|

  • We have already examined the entries required to record Goodwill in the books upon the death or retirement of one of the partners here
  • We will now look at an example to demonstrate the stages involved

Death/Retirement Example

Peter, George and Muchineripi have been in partnership for the past five years. They own a retail shop in Harare’s CBD where […]


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Principles of Accounting: Goodwill upon death or retirement of a partner

By |2018-03-20T10:00:37+02:00March 20th, 2018|Notes, Ordinary Level Notes, Principles of Accounts Notes|

ZIMSEC O Level Principles of Accounting: Accounting for Partnerships: Goodwill and Partnership businesses: When a partner dies/retires

  • Death is an inevitable part of life
  • Sometimes a partner might die
  • Also in other instances a partner might choose to leave the business i.e. retire
  • In all the cases above the affected partner ends up leaving the business
  • Technically speaking this […]

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Principles of Accounting: Goodwill: Example entries when a new partner is admitted

By |2018-03-16T12:58:59+02:00March 16th, 2018|Notes, Ordinary Level Notes, Principles of Accounts Notes|

ZIMSEC O Level Principles of Accounting: Accounting for Partnerships: Goodwill: Example entries when a new partner is admitted

  • We have looked at entries to be made in the books when a new partner is admitted into the business
  • Now it is time to look at a simple example of the entries involved

Example Question

Partners Chinjekure and Mupfumi share profits and […]


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Principles of Accounting: Goodwill: When a new partner is admitted

By |2018-03-20T09:07:01+02:00March 15th, 2018|Notes, Ordinary Level Notes, Principles of Accounts Notes|

ZIMSEC O Level Principles of Accounting: Accounting for Partnerships: Goodwill and Partnership businesses: When a new partner is admitted

  • It is not uncommon for a partnership business to admit a new partner
  • This is happens for any number of reasons including:
    • To admit a partner with new skills
    • When the firm is expanding
    • To replace a partner who is […]

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Principles of Accounting: Goodwill: Changes in Profit Sharing Ratio Example

By |2018-03-08T12:13:49+02:00March 8th, 2018|Notes, Ordinary Level Notes, Principles of Accounts Notes|

ZIMSEC O Level Principles of Accounting: Accounting for Partnerships: Goodwill and Partnership businesses: Changes in Profit Sharing Ratio Example

  • This is an example of a question where there are changes in the profit sharing ratio of a partnership
  • We have already looked at the entries involved in such cases here

Example question

Mhaka, Banda, Feruka and Tangwena run an Accounting […]


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Principles of Accounting: Partnership Entries for Goodwill: Changes in Profit Sharing Ratios

By |2018-03-08T12:29:46+02:00March 8th, 2018|Notes, Ordinary Level Notes, Principles of Accounts Notes|

ZIMSEC O Level Principles of Accounting: Partnership Entries for Goodwill: Changes in Profit Sharing Ratios

  • The idea of goodwill has been explored in full here
  • We have also looked at the unique treatment of goodwill in partnership businesses here
  • Below we will look at what happens when there is a change in the profit sharing ratio of a […]

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Principles of Accounting: Goodwill and Partnership businesses

By |2018-03-08T09:55:12+02:00March 8th, 2018|Notes, Ordinary Level Notes, Principles of Accounts Notes|

ZIMSEC O Level Principles of Accounting: Accounting for Partnerships: Goodwill and Partnership businesses

  • Now that we have explained the idea of goodwill
  • It is time we examine the concept of goodwill in relation with partnerships
  • As already explained accounting standards require that goodwill be recorded only when a business is bought or sold
  • Partnership business are special in […]

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Principle of Accounting: The concept of goodwill

By |2018-03-08T09:22:36+02:00March 8th, 2018|Notes, Ordinary Level Notes, Principles of Accounts Notes|

ZIMSEC O Level Principles of Accounting: Accounting for Partnerships: The concept of goodwill

  • It is not unusual for a business to be bought or sold as a going concern i.e.
  • The entire business (or business unit) and its related assets and liabilities
  • Often when a business is sold or bought it is at a price that is higher than […]

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