Advantage of Bill of Exchange

Companies have used Bills of Exchange for many years. Their longevity is due to the advantages they provide in a trading transaction.

1.     A Bill of Exchange facilitates the granting of trade credit to a customer.
2.     A Bill of Exchange provides a legal acknowledgement that a debt exists.
3.     It will provide the seller with access to finance.
4.     It will provide easy access to the legal systems in the event of non-payment.
5.     The following are the advantages of a bill of exchanges:
6.     It's a legal proof of debt.
7.     It's a convenient method for the transfer of debt
8.     A creditor will sue on the bill itself
9.     It's a negotiable instrument and may be transferred for settlement of one's debt without difficulty.
10.     It can be paid before due date by discounting.
11.     A debtor enjoys the benefit of full period of credit.
12.     It affords an ease means that of transmitting money from one place to another.

Characteristics of Bill of Exchange

1) There are three parties to a bill:
i. Drawer one who give the order
ii. drawee person to whom the order is given and if the drawee accepts the bill by signing it he's called the acceptor
iii. recipient person to whom the payment is to be created (by the drawee/acceptor).
iv. generally one person may take on 2 roles e.g. wherever he attracts a bill owed to himself or payable to the drawee e.g. a person drawing a cheque on a bank and owed to the bank itself

Bill of Exchange

Bill of exchange is an unconditional order in writing drawn by one person on another, signed by the accepter that show the acceptor should pay on demand or in future time a certain sum of money to specified person or to the bearer.

Objective of Work Sheet

To avoid errors in the permanent records of accounting

To check accuracy of financial statements

Chart of Accounts
each company keeps a chart of accounts that lists each account the company has. it's divided into 5 sections: assets, liabilities, equity, revenue and expenses. every of those accounts is within the company's book, wherever balances of every account are maintained. an accounting worksheet begins by listing every account and also the balance each account has.

Work Sheet

A sheet of paper with columns in which accounting data are required at the end of accounting period for analysis is called work sheet.

A worksheet is a sheet of paper, or on a computer, on that problems are worked

A worksheet generator is a software program that generates problems, particularly in mathematics or numeracy. Such software is commonly used by teachers to make classroom materials and tests.

Process Loss

The loss that occurs in the course of converting an input raw material into finished product is known as process loss. Such a loss could occur because of the nature of the raw materials. this type of loss occurs in terms of the difference between the input amount and the output amount.
 The difference between the input amount and the output amount arising on account of production operation is called process loss.

Normal Loss 

Abnormal Loss

 

Abnormal Loss

A loss which is avoidable through precautionary measures is called abnormal loss. For example: Loss by fire, accident.

The loss realized over the normal loss is termed an abnormal loss. Abnormal loss arises because of abnormal working conditions, unhealthy working condition, carelessness, rough handling, lack of correct data, low quality material, machine breakdown, accident etc. thus an abnormal loss is unanticipated unanticipated loss. Abnormal loss could be a controllable loss and thus is avoided if corrective measures ar taken. Therefore, abnormal loss is also called an avoidable loss.
The value of an abnormal loss is assessed on the premise of the production cost with which the profit and loss account is charged.