Note: Applications are at the moment being accepted for element-time. The complete-time September 2016 intake is now closed for new applications. Applications for the full-time January 2017 intake will be accepted starting June 1, 2016.
This is a liability representing an amount due to a supplier from whom the business has bought on credit either raw material for processing or goods traded in by the organization. Please contrast this from a bank overdraft balance. The latter is also a liability and a creditor but not a trade creditor since it did not result from the acquire on credit of either raw material for processing or goods traded in by the organization.
In non-integral accounting, independent cost accounts are maintained. The subsidiary ledgers and the cost ledger are inter-locked by way of control accounts maintained in each and every ledger. This practice (sustaining manage accounts) is followed for the objective of cross-checking the accuracy of ledgers, and also to make each ledger self balance so that a separate trial balance may be ready for every ledger without having reference to the other ledgers.
Any funds owed by and due from a company is termed a liability. Examples are proprietor’s capital, share capital, debentures, trade creditors (amounts due to suppliers from whom the business has bought goods on credit for resale with or with out further processing), bank overdraft balances, salaries payable, electricity charges payable and so forth.
Accounting entries are recorded as per the typically accepted accounting principles. If any of these principles are violated or ignored, errors resulting from such violations are identified as errors of principle. As an illustration, Periodicity principle needs maintaining appropriate distinction amongst capital and income items. An error of principle could occur due to incorrect classification of expenditure or receipts in between capital and income. This is really crucial because it will have an influence on financial statements. It may possibly lead to under/over stating of earnings or assets or liabilities, and so on.