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Accounting System:
Accounting system consists on the following activities in my project report:

1. Balance Sheet

2. Profit & Loss Accounts

3. Statement of Changes in Equity

4. Statement of Cash Flows

5. Statement of Premiums

6. Statement of Claims

7. Statement of Expenses

8. Statement of Investment Income

Each contains the detailed entries of its specific field.

Activities in Cash flow:

The following are three activities in cash flow statement.

 OPERATIONS Activities: Cash transactions associated with running

the business.

 INVESTMENTS Activities: Cash used in or provided by the firm’s

investment activities.

 FINANCING Activities: Cash raised from the issuance of new debt or

equity capital or cash used to pay business expenses, past debts, or
company dividends.
Partnership:
A partnership is defined as the relationship that exists between persons carrying
on a business. These persons agree to combine some or all of their property,
labour, and skills. This relationship is based on a contract.
OR

When two or more individuals engage in an enterprise as co-owners, the

organization is known as a partnership. This form of organization is popular
among personal service enterprises, as well as in the legal and public accounting
professions.

Advantages:

 Partnerships allow for a greater amount of money, skill, and other

resources to be pooled.
 They are relatively easy to organize.
 They are subject to limited government regulations and do not face high tax
rates.

Disadvantages:

 Partnerships have a limited life.

 Each partner is subject to unlimited liability. This means that if the
company fails, creditors can take action against both the partnership and
the persons who are in it.
 Partners have mutual agency. This means that one partner can make
decisions without consulting the other(s).

International Accounting Standards:

The IAS (International Accounting Standards) is a set of standards which state
how certain types of transactions and other events should be reflected in financial
statements.

The International Accounting Standards are formulated and issued by the

International Accounting Standards committee (IASC) has so far
Issued 41 International Accounting Standards and their outlines are given below:

IAS-1: Disclosure of Accounting Policies.

IAS-2: Valuation and presentation of inventories in the context of

the historical cost system.

IAS-3: Consolidated Financial Statements.

IAS-4: Depreciation Accounting.

IAS-5: Information to be disclosed in financial statements.

IAS-6: Accounting responses to changing prices (superseded by IAS-

15).

IAS-7: Cash flow statements.

IAS-8: Unusual and prior period items and changes in accounting

policies.

IAS-9: Accounting for research and development activities.

IAS-10: Contingencies and events occurring after the balance sheet

date.

IAS-11: Accounting for construction contracts.

IAS-12: Accounting for taxes on income.

IAS-13: Presentation of current assets and current liabilities.

IAS-14: Reporting financial information by segment.

IAS-15: Information reflecting effects of changing price.

IAS-16: Accounting for property, plant and equipment.

IAS-17: Accounting for leases (revised).

IAS-18: Revenue recognition.

IAS-19: Accounting for retirement benefits in the financial

statement of employers.

IAS-20: Accounting for government grants and disclosure of

government assistance.

IAS-21: Accounting for the effects of changes in foreign exchange

rates.
IAS-22: Accounting for business combinations (revised).

IAS-23: Capitalization of borrowing costs.

IAS-24: Related party disclosures.

IAS-25: Accounting for investments.

IAS-26: Accounting and reporting by retirement benefits plans.

IAS-27: Consolidation financial statements and accounting for

investments in subsidiaries.

IAS-28: Accounting for investments in associates.

IAS-29: Financial reporting in hyper inflationary economies.

IAS-30: Disclosures in the financial statements of bank and

similar financial institutions.

IAS-31: Financial reporting of interests in joint ventures.

IAS-32: Financial instruments: Disclosure and Presentation.

IAS-33: Earning per share.

IAS-34: Interim financial reporting.

IAS-35: Discontinuing operations.

IAS-36: Impairment (or loss) of assets.

IAS-37: Provisions, contingent liabilities and contingent assets.

IAS-38: Intangible assets (Supersedes IAS-9).

IAS-39: Financial instruments (Supplements IAS-32).

IAS-40: Investment property (Supersedes IAS-25).

IAS-41: Agriculture.
Corporation & Its Formation:
Corporation is a legal entity that is separate and distinct from its owners.
Corporations enjoy most of the rights and responsibilities that an individual
possesses; that is, a corporation has the right to enter into contracts, loan and
borrow money, sue and be sued, hire employees, own assets and pay taxes.

The most important aspect of a corporation is limited liability. That is,

shareholders have the right to participate in the profits, through dividends
and/or the appreciation of stock, but are not held personally liable for the
company's debts.

A corporation is created (incorporated) by a group of shareholders who have

ownership of the corporation, represented by their holding of common stock.
Shareholders elect a board of directors (generally receiving one vote per share)
who appoint and oversee management of the corporation. Although a corporation
does not necessarily have to be for profit, the vast majority of corporations are
setup with the goal of providing a return for its shareholders. When you purchase
stock you are becoming part owner in a corporation.

Corporations are usually registered with the state, province, or national

government and regulated by the laws enacted by that government. Registration
is the main prerequisite to the corporation's assumption of limited liability. The
law sometimes requires the corporation to designate its principal address, as well
as a registered agent (a person or company designated to receive legal service of
process). It may also be required to designate an agent or other legal
representative of the corporation.

Difference between Long Term and Short Term

Investments:
Short-term investments are designed to be made only for a little while, and
hopefully show a significant yield, whereas long-term investments are designed to
last for years, showing a slow but steady increase so that there is a significant
yield at the end of the term. They may include stocks, bonds, real estate and
cash.
Inventory Management System:
There are mainly two inventory systems used:

1. Periodic Inventory System

2. Perpetual Inventory System

Periodic Inventory System:

Under this system, stock taken is undertaken at the end of the accounting year.
As the stock taking involves verifying the physical quantities of stores in hand,
some firms temporarily suspend plant operations when this is done.

Perpetual Inventory System:

This is a stock recording system which provides an up to date record of the stock
balances held at any given time. All movements of materials must be immediately
recorded so that ledger and bin card given up to date information about the
balance in store. Perpetual inventory system involves the following:

1. Reconciliation of Bin Card and Store Ledger.

2. Confirm stock taking i.e. physical checking of stock items is done regularly.
Sufficient items are checked every day so that in the course of a year, all
items are checked at least once.
Resource Guide
Recommended Reading
The Average Investor Is Better Off Trading Long-Term
Investor are often reminded by the stock market that their shares value can go up (the bull)
as well as down (the bear). That is why people who tried to time the market can never
beat it.
http://www.sap-basis-abap.com/shares/the-average-investor-is-better-off-trading-long-term.htm

Dividend Paying Stocks have lower downside risk

In a down market, a defensive stock is sought after by investors as it is a safe haven to park
money while still earning a steady dividend income at the same time.
http://www.sap-basis-abap.com/shares/dividend-paying-stocks-have-lower-downside-risk.htm

Working On Our Wealth Creation Strategy

There are many of us who are working on our wealth creation strategy. Whether it be
working another job, starting a small home based business or seriously building
knowledge on the share and property markets, those that are serious are looking.
http://www.sap-basis-abap.com/shares/wealth-building-strategy.htm

Building Wealth With These Personal Finance Rules

Great personal financial rules to grow your wealth.
http://www.sap-basis-abap.com/shares/personal-finance-rules-to-building-wealth.htm

Knowing When To Sell During Stock Market Investing

As a rule of thumb, wait till the stock reaches a price double what we think it’s worth. Of
course, this is a personal decision, too, and depends on how patient you are, and how
much you have invested.
http://www.sap-basis-abap.com/shares/stock-market-investing-knowing-when-and-when-not-to-sell.htm