Contents:

1. Introduction
2. Very Basic Double Entry
3. Cash Transactions
4. Books of Prime Entry
5. Soletraders & Partnerships
6. Limited Companies
7. Credit Transactions
8. Accruals & Prepayments
9. Fixed Assets
10. Year-end Procedures
11. Reconciliations
12. Other Entries

5 - Soletraders & Partnerships

This section deals with the areas peculiar to either soletraders or partnerships.

Capital Account

The main distinction between these & Limited Companies in bookkeeping terms is the treatment of the funds used to finance the business - the capital.

Soletraders/partners have a capital account - the private funds they have introduced into the business. There will be a "T" account for this. It usually has a Credit balance as it is money owed by the business to its owner (a liability).

During the year, they may introduce more funds, which will be Credited to the Capital Intro "T" account.

Similarly the owner(s) may draw a 'wage' or use business funds for private expenses, which are known as "drawings". These will be Debited to the Drawings "T" account.

Profits/losses for the year are added to the capital account each year.

The next section looks at the treatment of capital in Limited Companies.

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