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What is difference between goodwill account and capital reserve account?
Wiki User
∙ 11y ago
Goodwill is an Intangible Assets of an enterprise. Its the "extra earning capacity" in future years due to past efforts.
While Capital reserve arises because of capital profits i.e. profits which are not earned because of normal routine business transactions. for e.g. profit on reissue of forfeited shares, profit on business acquisition, profit prior to incorporation, etc.
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CA. Ravi Chugh
(FCA, Visiting faculty ICAI & Top Institutes of CA-Studies for teaching IPCC Accountancy)
Wiki User
∙ 11y ago
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Give examples for goodwill in double entry?
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What is the difference between financial capital maintenance and physical capital maintenance?
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What is difference between current account and capital account?
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Do you get capt gains treatment on sale of goodwill?
If the sales price of my business includes goodwill, is that portion subject to capital gains treatment or is the goodwill considered to be ordinary income?
Give examples for goodwill in double entry?
DR goodwill account CR capital account
What are the difference between fixed capital and fluctuating capital?
Difference between Fixed and Fluctuating Capital AccountsFixed and fluctuating capital accounts are the terms which are often used in the context of partnership. Partners can maintain the capital accounts in two ways one is fixed capital account and other is fluctuating capital accounts, let's look at the difference between both of them - Fixed Capital Account - Under this system, the capital which is introduced by partners will remain fixed throughout the life of the partnership. Hence under this method two type of accounts are made one is capital account and other is current account. Therefore all entries relating to drawings, interest on capital, profit and loss share of partner are made in a separate account for each partner, it is called current account of partners. However when partner brings additional capital or withdraws capital permanently, then capital account is credited or debited respectively.Fluctuating Capital Account - Under this method capital account of partners will not remain fixed rather they will keep fluctuating from time to time. In this method all the entries related to drawings, interest on capital and share of profit and loss of partner are recorded in capital account, hence in this method there is no need for current account.Fluctuating capital account method is usually preferred by partners; however they can also use fixed capital account according to their business and preference.
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What is the difference between financial capital maintenance and physical capital maintenance?
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What is difference between current account and capital account?
Current account shows current year current year transactions and capital account shows both current transactions relating to businessman and initial capital of businessman.According to FEMA Act 2000, "There is no restrictions on holding or exchanging of foreign currency under Current Account . But Any foreign currency is under capital account , then it must be controlled under the regulations of RBI."In partnership , partners can make current account separately from capital account in which they can show only their salary, interest on capital and interest on drawing etc. and in capital account, they can show only their capital invested in the business of partnership.USA has divided export and import transactions into 2 accounts: One is the current account and other is the capital account. The current account includes in international trade in goods and services and with earnings on investments. The capital account includes of capital transfers and the acquisition and disposal of non-produced, non-financial assets.In general Current account is used for receipt and payment cash and non capital items and capital account is used for sources and utilization of capital.
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