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geek84


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Book Keeping assignment - queries
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Hi Folks

I am doing a book keeping assignment and would be very grateful if someone would kindly give information on the following -

1. For a contract to become legal, does it have to be in writing?

2. If a business is a supplier & a customer, in what accounts in the main ledger can you make contra entries to off set amounts against each other?

3. Apart from the Imprest System, what is another name give to the system of operating the petty cash?

4. If a business owner buys a van for business use, and the seller does not accept a chq payment, what other method can be used to make payment (another service offered by banks).

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Rhianrach


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1/ I would say yes

2/ really don't know but you can set up a contra account such as a bank account so BS Asset account

3/ non - imprest

4/ Bacs



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Steve
Hopeful


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1/ a contract to be legal can also be oral and implied - if memory serves it's been a while since I did my law exam. 

2/ you can make a supplier payment & customer reciept mark it contra in the ref then reconcile - obviously using the same dates.

3/ ?

4/ chaps or bankers draft.

hope these help




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geek84


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Thanks Steve

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ADAS


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I agree with "hopeful" - A contract doesn't have to be written to exist. A contract is created when there's an offer, consideration, acceptance and intention to create legal relations.

As far as I recall only certain contracts have to be in writing e.g transfer of property, tenancy agreements and consumer credit.

Having said that written evidence of the terms is allways a good idea.

Tony.

-- Edited by ADAS on Tuesday 24th of August 2010 10:59:52 PM

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Tony

Responses are intended as outline only. Formal advice should be sort from your Institutes Technical Department or a suitably qualified Accountant.
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Merlion ABS


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With regards to point 2) I wouldn't contra anything off. I know its easier to do so, but it can get messy and they may not contra the same things off as you do. you would need good communications and there is always the issue of disputes on invoices that could make it worse.

As long as you both agree what is being contra'd then do so, but just ensure you pre agree the contra's before you post it.

Point 4) you could also do a postal order from the post office.



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Peasie


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Merlion ABS wrote:

With regards to point 2) I wouldn't contra anything off. I know its easier to do so, but it can get messy and they may not contra the same things off as you do.

It is an assignment - not the real world.
This is something I forget myself when I am working on Sage Instant Accounts towards my ICB exam. I forget this is a real accounting program designed for real world situations and not just the easy world of assignments.
Did I say easy - I meant easier.

 



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Merlion ABS


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ah heh heh. my bad. i shouldnt post late at night. 8(

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