Depreciation is method of recovering the cost of a tangible asset over its useful life.

Amortization is a confusing tax term. it's similar to depreciation, and it works like depreciation, but it's
used for different kinds of business assets.

The concept of both depreciation and amortization is a tax method designed to spread

Similar
Depreciation is the systematic and rational allocation of tangible and current asset cost over the
periods benefited by the use of the asset. 
Depletion is the periodic allocation of the cost of natural resources.
Amortization is the periodic cost allocation process for intangible assets.

Conclusion
Depreciation and Amortization are typically identical terms the only difference is that
depreciation applies to tangibles while amortization applies to intangibles. Both are non-
monetary capital expenditure and hence shown in the assets side of the Balance Sheet as a
reduction in the value of the asset concerned. However, these two terms are governed by
different accounting standard

Similar of Depreciation & Amortization

The profession requires the method employed

be “systematic and rational.” Examples
include:
 Activity method (units of use or production).
Straight-line method.
Diminishing (accelerated)-charge methods:
Sum-of-the-years’-digits.
Declining-balance method.
A periodic system requires management to stop doing business and physically count the
inventory before posting any accounting entries.

Perpetual inventory provides a highly detailed view of changes in inventory with immediate
reporting of the amount of inventory in stock, and accurately reflects the level of goods on hand.
Main Difference

Financial accounting and cost accounting are two important terms in accounting that are used to
control and formulate the organization policies. Both are used for different purposes with
different styles. The main difference between financial accounting and cost accounting is that
financial accounting shows the overall performance of an organization while cost accounting
only give the details of products and their costs.
Balance per Bank st . . . . . . . .. .. . . . . . . .16,178
(+) Deposit in transit . . . . . . . . . . .. . . . . . .. . . . . 7,600
(+) Under posited receive (Cash on hand) . . . 620
(+) Errors Bank Undertan b/s - - - - - - - - - - - -- 0
(-) Outstanding Ck . . . . . . . . . . . . . . . . . . . . . 3,100
(-) Errors Overstate Bank st . . . . . . . .. .. . . .. ..0

21,298
 Trial B/s
Balance per Book st . . . . . . . .. .. . . . . . . .19,294
 Adjustment
(+) Credit & Collection (not on) . . . . . . . . . 2,080
 Adjustment Trial b/s
(+) Errors Book Undertan b/s - - - - - - - - - - - -- 0  Income statement
(-) Charge . . . . . . . . . . . . . . . . . . . . . 40  Balance Sheet
(-) Errors Overstate Book st . . . . . . . .. .. . . .. .36 Asset = Equities
Asset = Liability + Owner Equity
21,298 Asset – Liabilities = Owner Equity

A sole proprietorship is a business owned by only one person. It is easy to set-up and is the
least costly among all forms of ownership.

A partnership is a business owned by two or more persons who contribute resources into the
entity. The partners divide the profits of the business among themselves.
A corporation is a business organization that has a separate legal personality from its owners. Ownership
in a stock corporation is represented by shares of stock.
A cooperative is a business organization owned by a group of individuals and is operated for their mutual
benefit. The persons making up the group are called members. Cooperatives may be incorporated or
unincorporated.
A sole proprietorship:-

Expel of Asset, Liability & Equate

Assets = Liabilities + Equity Examples

The five account types are:   Assets, Liabilities, Equity, Revenue (or Income) and Expenses. To
fully understand how to post transactions and read financial reports, we must understand these
account types. We'll define them briefly and then look at each one in detail:

 Assets: tangible and intangible items that the company owns that have value (e.g. cash,
computer systems, patents)
 Liabilities: money that the company owes to others (e.g. mortgages, vehicle loans)
 Equity: that portion of the total assets that the owners or stockholders of the company
fully own; have paid for outright
 Revenue or Income: money the company earns from its sales of products or services,
and interest and dividends earned from marketable securities
 Expenses: money the company spends to produce the goods or services that it sells (e.g.
office supplies, utilities, advertising)
Revenue and expense the report Income statement
 Ownerships divided into shares of stock Corporation
 Considered nominal accounts Drawing Account, Fees Earned, rent Expense
 Closing entries will adjust update the account The Capital account
 End of the accounting period Insurance acc Debit Income Summary; Credit Insurance Expense
 Unearned service Fees Current Liability
 What type of account is prepaid Rent Current Asset
 For birr 2,500 Both asset 2,500 in & equity in by 2,500
 If merchandise purchased on account is returned, the buyer may inform the seller of the details
by issuing: A debit memorandum
 On a multiple income statement, the excess of net sales over the cost of merchandise sold are Gross Profit
 Journal entries based on bank
 Required prepare the necessary journal entries.

Cost & Cash definition

Cash cost is a cash basis accounting cost recognition process that classifies costs as they are
paid for in cash, and is recognized in the general ledger at the point of sale. This method is
contrary to the accrual cost recognition method, which directly influences the operating.
Types of Inventory
Inventory is the raw materials, work-in-process products
and finished goods
There are three components typically classified under the inventory account: raw materials,
work in progress and finished goods. Raw materials represent goods that are used in the
production as a source material. Examples of raw materials are metal bought by car
manufacturers, food ingredients held by food preparation companies and crude oil held by
refineries.

Work in progress includes goods that are in the process of being transformed during
manufacturing and are about to be converted into finished goods. For example, a half-assembled
airliner or a ship that is being built would be work in process.

Finished goods are products that have gone through the production and ready for sale, such as
completed airliners, ready-to-ship cars and electronics. Retailers who buy and resell goods
typically call inventory "merchandise," which includes finished goods bought from producers
and can be resold immediately. Examples of merchandise include electronics, clothes and cars
held by retailers.
Balance Per Bank statement ------------------16178
(+) Deposit in transit -----------------------------7,600
(+) Under posited receive (Cash on hand) 620
(+) Bank errors understand bank b/s 0
(-) Outstanding Check--------------------------- (3,100)
(-) Bank errors Overstate bank b/s ------------ 0

Correct cash balance 21,298

Balance Per Book or comp statement ------------19,294

(+) Credit & Collection (not on) ----------------------2,080
(+) Bank errors understand bank b/s 0
(-) Bank Charge not on book------------------------ (40)
(-) Bank errors Overstate bank b/s ---------------- (36)

Correct cash balance 21,298

Balance Per Bank statement ------------------16178

(+) Deposit in transit -----------------------------7,600
(+) Under posited receive (Cash on hand) 620
(+) Bank errors understand bank b/s 0
(-) Outstanding Check--------------------------- (3,100)
(-) Bank errors Overstate bank b/s ------------ 0

Correct cash balance 21,298

Balance Per Book or comp statement ------------19,294

(+) Credit & Collection (not on) ----------------------2,080
(+) Bank errors understand bank b/s 0
(-) Bank Charge not on book------------------------ (40)
(-) Bank errors Overstate bank b/s ---------------- (36)

Correct cash balance 21,298

Balance Per Bank statement ------------------16178

(+) Deposit in transit -----------------------------7,600
(+) Under posited receive (Cash on hand) 620
(+) Bank errors understand bank b/s 0
(-) Outstanding Check--------------------------- (3,100)
(-) Bank errors Overstate bank b/s ------------ 0

Correct cash balance 21,298

Balance Per Book or comp statement ------------19,294

(+) Credit & Collection (not on) ----------------------2,080
(+) Bank errors understand bank b/s 0
(-) Bank Charge not on book------------------------ (40)
(-) Bank errors Overstate bank b/s ---------------- (36)

Correct cash balance 21,298