Lesson 2: Limited liability companies

Lesson 2: Limited liability companies

So far, we dealt mainly with the accounts of businesses in general. In this lesson we shall turn our attention to the accounts of limited liability companies. The accounting rules and conventions for recording the business transactions of limited liability companies and then preparing their final accounts are much the same as for sole traders. For example, companies will have a cash book, sales day book, purchase day book, journal, receivables ledger, payables ledger and nominal ledger. They will also prepare a statement of profit or loss annually and a statement of financial position at the end of the accounting year.

Unlimited and limited liability
Unlimited liability means that if the business runs up debts that it is unable to pay, the proprietors will become personally liable for the unpaid debts and would be required, if necessary, to sell their private possessions to repay them.

ASSIGNMENT : CLARKE FRINGLAND CO MARKS : 100  DURATION : 7 days

 

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