Neco 2017 Book Keeping QUESTION AND ANSWERS NOW 100% AVAILABLE WITH US.

 

 

NECO BOOK-KEEPING THEORY

(2a)Stock-taking or “inventory checking” is the physical verification of the quantities and condition of items held in an inventory or warehouse. This may be done to provide an audit of existing stock. It is also the source of stock discrepancy information.

 

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2b)
1.sole traders
2.partnerships
3.companies
4.franchises

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2ci)Advantages of a sole trader

i.Control – Sole traders maintain full control of their business. Running it how they please without the interference of others.

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ii.Personal – Because there is no need to confer with other decision makers, sole traders can make decisions quickly and act on them swiftly, providing for the needs of their customers

 

 

Disadvantages of a sole trader

i. Finance – sole traders often find it difficult to raise finance to fund their business. They may struggle with expansion in the future.

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ii.Decision making – all decisions must be made by the sole trader. There is no room for help by others. So the success or failure of the business rests on one person.

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2cii)

Advantages of Partnership

Capital – Due to the nature of the business, the partners will fund the business with start up capital. This means that the more partners there are, the more money they can put into the business, which will allow better flexibility and more potential for growth.

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  • Flexibility – A partnership is generally easier to form, manage and run. They are less strictly regulated than companies, in terms of the laws governing the formation and because the partners have the only say in the way the business is run (without interference by shareholders) they are far more flexible in terms of management, as long as all the partners can agree.

Disadvantages of Partnership

  • Disagreements – One of the most obvious disadvantages of partnership is the danger of disagreements between the partners. Obviously people are likely to have different ideas on how the business should be run, who should be doing what and what the best interests of the business are.
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  • Agreement – Because the partnership is jointly run, it is necessary that all the partners agree with things that are being done. This means that in some circumstances there are less freedoms with regards to the management of the business.