# 105 Accounting O Level/IGCSE Theory and Practice Book

## 105 Accounting O Level/IGCSE Theory and Practice Book| Read & Write Publications.

  
**TABLE OF CONTENTS**  

### **PREFACE**  
**(**105 Accounting O Level Theory and Practice**)**

  

### **CHAPTER 1A BOOKKEEPING AND ACCOUNTING**

  
**1A.1 BRANCHES OF ACCOUNTING**  
**1 A.2 ACCOUNTING EQUATION**  
1A.2.1 Assets  
1A.2.2 Liabilities  
1A.2.3 Equity  
1A.2.4 Drawings  
1A.2.5 Treatment of transactions relating to owners  
1A.2.6 The Dual Aspect Concept and the Accounting Equation  
**1A.3 TRANSACTION**  
1A.3.1 Cash Transactions  
1A.3.2 Credit Transactions  
**1A.4 STATEMENT OF FINANCIAL POSITION**   
1A.4.1 Statement of Financial Position (Horizontal Style)  
1A.4.2 Statement of Financial Position (Vertical Style)  
**REVIEW QUESTIONS**

**CHAPTER 1B ACCOUNTING FOR ASSETS, LIABILITIES AND CAPITAL**  
**1B.1 EVOLUTION OF BOOK KEEPING**  
**1B.2 ACCOUNT**  
**1B.3 ''T'' ACCOUNT**  
**1B.4 RULES OF DEBIT AND CREDIT**  
**1B.5 THREE-COLUMN LEDGER ACCOUNT (RUNNING BALANCE METHOD)**  
**1B.6 LEDGER**  
**1B.7  DOUBLE-ENTRY RELATING TO ASSETS AND LIABILITIES**  
1B.7.1 EXAMPLE  
**1B.8 BALANCING OF AN ACCOUNT**  
1B.8.1 When should accounts be balanced?  
**1B.9  TRIAL BALANCE**  
1B.9.1 Uses of a Trial Balance  
1B.9.2 Why is it Necessary for a Trial Balance to ‘Balance’?  
1B.9.3 Trial Balance - An aid to Financial Statements  
**1B.10 HOW CAN LEDGER ACCOUNTS BE KEPT DIGITALLY?**  
**REVIEW QUESTIONS**

**CHAPTER 1C ACCOUNTING FOR GOODS**  
**1C.1 INVENTORY OF GOODS**  
**1C.2 BOOKKEEPING FOR INVENTORY OF GOODS**  
**1C.3 WHY INVENTORY ACCOUNT DOES NOT INCLUDE PURCHASES AND SALES OF GOODS**  
**1C.4 PURCHASES**  
1C.4.1 Cash Purchases  
1C.4.2 Credit Purchases  
**1C.5 SALES**  
1C.5.1 Cash Sales  
1C.5.2 Credit Sales  
**1C.6 PURCHASES RETURNS (RETURN OUTWARDS)**  
**1C.7 SALES RETURNS (RETURNS INWARDS)**  
**1C.8 TRADING SECTION OF INCOME STATEMENT**  
**1C.9 CLOSING OF INCOMES AND EXPENSES**  
**1C.10 CLOSING INVENTORY**  
**1C.11 OPENING INVENTORY**  
**REVIEW QUESTIONS**

**CHAPTER 1D ACCOUNTING FOR INCOMES AND EXPENSES**   
**1D.1 INCOMES**  
**1D.2 EXPENSES**  
**1D.3 DOUBLE-ENTRY FOR EXPENSES AND INCOMES (REVENUES)**  
**1D.4 BOOKKEEPING FOR INCOMES AND EXPENSES**  
**1D.5 CALCULATION OF NET PROFIT**  
**1D.6 CLOSING OF INCOMES AND EXPENSES**  
**REVIEW QUESTIONS**

**CHAPTER 2 BOOKS OF PRIME ENTRY**  
**2.1 ADVANTAGES OF MAINTAINING BOOKS OF ORIGINAL ENTRY**  
**2.2 COMPONENTS OF BOOKS OF ORIGINAL ENTRY**  
**2.3 SALES JOURNAL**  
2.3.1 Posting from the Sales Journal to the Ledger  
2.3.2 Trade Discount  
2.3.3 Sales on Credit Card  
**2.4 PURCHASES JOURNAL**  
2.4.1 Posting from the Purchases Journal to the Ledger  
**2.5 RETURN INWARDS JOURNAL**  
2.5.1 Posting from the Returns Inwards Journal to the Ledger  
**2.6 RETURN OUTWARDS JOURNAL**  
2.6.1 Posting from the Returns Outwards Journal to the Ledger  
**2.7 GENERAL JOURNAL**  
**2.8 CASH BOOK**  
**2.9 PERSONAL LEDGERS**  
**2.10 GENERAL LEDGER**  
**REVIEW QUESTIONS**

**CHAPTER 3 CASH BOOK & PERRT CASH BOOK**  
**3.1 TWO-COLUMN CASH BOOK**  
**3.2 FOLIO COLUMNS**  
**3.3 DISHONOURED CHEQUES**  
**3.4 CONTRA ENTRIES**  
**3.5 BALANCING OF CASH AND BANK COLUMNS**  
**3.6 CASH DISCOUNTS**  
3.6.1 Why are cash discounts offered?  
**3.7 THREE-COLUMN CASH BOOK**  
**3.8 NATURE OF DISCOUNTS COLUMNS**  
**3.9 CASH BOOK IN RECENT TIMES**  
**3.10 PETTY CASH**  
**3.11 PETTY CASH BOOK**  
**3.12 IMPREST SYSTEM**  
3.12.1 Advantages Of the imprest system  
**3.13 HOW T OAPPLY THE IMPREST SYSTEM**  
**3.14 THE BENEFITS AND LIMITATIONS OF KEEPING CASH AT THE BUSINESS PROPERTY**  
**REVIEW QUESTIONS**

**CHAPTER 4 BANK RECONCILIATION**   
**4.1 DIFFERENCE BETWEEN BANK STATEMENT AND CASH BOOK**  
**4.2 REASONS FOR DIFFERENCE BETWEEN CASH BOOK AND BANK STATEMENT BALANCE**  
4.2.1 Items in the Bank Statement but not in the Cash Book  
4.2.2 Items in the Cash Book but not in the Bank Statement  
**4.3 BANK RECONCILIATION STATEMENT**  
**4.4 STEPS FOR PREPARING A BANK RECONCILIATION STATEMENT**  
**4.5 USES OF BANK RECONCILIATION STATEMENT**  
**4.6 IMPACT OF DIGITAL TRANSACTIONS ON BANK RECONCILIATION**  
**REVIEW QUESTIONS**

**CHAPTER 5 ACCOUNTING FOR NON-CURRENT ASSET**   
**5.1 DEPRECIATION**  
**5.2 CAUSES FOR DEPRECIATION**  
**5.3 FACTORS FOR CALCULATING DEPRECIATION**  
5.3.1 The Original Cost of Asset  
5.3.2 The Estimated Useful Economic Life  
5.3.3 The Approximate Residual Value  
**5.4 CHARACTERISTICS OF DEPRECIATION**  
**5.5 METHODS FOR CALCULATING DEPRECIATION**  
5.5.1 Revaluation Method  
5.5.2 Straight Line Method or Original Cost Method  
5.5.3 Reducing Balance Method  
**5.6 ANNUAL DEPRECIATION UNDER REDUCING BALANCE & STRAIGHT LINE METHODS**  
**5.7 DISTINCTIVE FEATURES OF STRAIGHT LINE AND REDUCING BALANCE METHOD**  
**5.8 DIFFERENCE BETWEEN DEPRECIATION AND PROVISION FOR DEPRECIATION**  
**5.9 DEPRECIATION POLICIES**  
**5.10 DEPRECIATION ACCOUNTING**  
**5.11 DEPRECIATION AND ACCOUNTING CONCEPTS**  
**REVIEW QUESTIONS**

**CHAPTER 7 INVENTORY VALUATION**  
**7.1 COST**  
**7.2 NET REALISABLE VALUE**  
**7.3 BASIS FOR INVENTORY VALUATION**  
**7.4 INVENTORY VALUATION AND ACCOUNTING CONCEPTS**  
**7.5 SEPARATE VALUATION OF INVENTORY ITEMS**  
**7.6 EFFECTS OF ERRORS IN VALUING INVENTORY**  
**REVIEW QUESTIONS**

**CHAPTER 8 CAPITAL AND REVENUE EXPENDITURE AND RECEIPTS**  
**8.1 TREATMENT OF CAPITAL AND REVENUE ITEMS IN FINANCIAL STATEMENT**  
**8.2 DISTINCTION BETWEEN CAPITAL AND REVENUE EXPENDITURES**  
8.2.1 Expenditures for Acquisition of a Non-current asset  
8.2.2 Expenditures for Improving Efficiency /Capacity of a Non-current asset  
8.2.3 Expenditure at the Initiation of Business  
8.2.4 Expenditure on Extension of Business  
8.2.5 Expenditures to Increase the Useful Life of an Asset  
8.2.6 Expenditures of Abnormal Amounts  
**8.3 APPLICATION OF MATERIALITY CONCEPT**  
**8.4 DIFFERENCE BETWEEN CAPITAL AND REVENUE RECEIPTS**  
8.4.1 Revenue Receipts  
8.4.2 Capital Receipts  
**8.5 EFFECTS OF WRONG TREATMENT OF CAPITAL AND REVENUE ITEMS**  
**REVIEW QUESTIONS**

**CHAPTER 9 CORRECTION OF ERRORS**  
**9.1 TYPES OF ERRORS**  
9.1.1 Errors Not Affecting Agreement of Trial Balance  
9.1.2 Errors Affecting Agreement of Trial Balance  
**9.2 SUSPENSE ACCOUNT**  
**9.3 EFFECT ON PROFIT OF CORRECTING ERRORS**  
**9.4 EFFECTS ON STATEMENT OF FINANCIAL POSITION OF CORRECTING ERRORS**  
**REVIEW QUESTIONS**

**CHAPTER 10 CONTROL ACCOUNTS**   
**10.1 CONTROL ACCOUNTS IN CAMBRIDGE ORDINARY LEVEL SYLLABUS**  
**10.2 THE FORMAT OF CONTROL ACCOUNTS**  
**10.3 BOOKS OF PRIME ENTRY AS SOURCES OF CONTROL ACCOUNTS ENTERIES**  
**10.4 CONTRA ENTRY**  
**10.5 TWO BALANCES OF CONTROL ACCOUNTS**  
10.5.1 Reasons for Having Two Balances of a Control Account  
10.5.2 Treatment of Two Balances in the Statement of Financial Position  
**10.6 BENEFITS OF OFFERING CASH DISCOUNTS**  
**10.7 EFFECTS OF CHARGING INTEREST ON OVERDUE BALANCES OF CUSTOMERS**  
**10.8 ADVANTAGES OR USES OF CONTROL ACCOUNTS**  
**10.9 IMPACT OF DIGITAL ACCOUNTING ONN CONTROL ACCOUNTS**  
**REVIEW QUESTIONS**

**CHAPTER 11 OTHER PAYABLES AND OTHER RECEIVABLES**   
**11.1 Matching Costs and Revenues**  
**11.2 Accruals**  
11.2.1 Accrued Expenses (Other Payables)  
11.2.2 Accrued Incomes (Other Receivables)  
**11.3Prewvyments**  
11.3.1 Prepaid Expenses \[Other Receivables)  
11.3.2 Pre-received Incomes/Incomes in Advance  
**11.4 Treatment of Opening Accruals or preravments**  
**11.5 Application of Matching Concept by Using Accruals and Prepayments**  
**REVIEW QUESTIONS**

**CHAPTER 12 SOLE TRADERS**  
**12.1 SOLE TRADER**  
12.1.1 Advantages of Operating as a Sole Trader  
12.1.2 Disadvantages of Operating as a Sole Trader  
**12.2 Need for Statement of profit or loss**  
**12.3 Uses of statement of profit or loss**  
**12.4 Carriage Inwards**  
**12.5 Carriage Outwards**  
**12.6 Financial Statements - An important consideration**  
**12.7 Accounting Period**  
**12.8 Drawings**  
**12.9 Assets**  
12.9.1 Non-Current Assets  
12.9.2 Current Assets  
**12.10 LIABILITIES**  
12.10.1 Current Liabilities  
12.10.2 Non-Current Liabilities  
**12.11 Cash and Accrual Basis of Accounting**  
**12.12 Need for Adjustments**  
**12.13 Types of Adjustments**  
12.13.1 Inventory at Year-End  
12.13.2 Closing Inventory in Trial Balance  
12.13.3 Drawings by Owner  
12.13.4 Other Receivables and Payables  
12.13.5 Depreciation  
12.13.6 Irrecoverable debts  
12.13.7 Allowance for irrecoverable debts  
**12.14 The Versatility of Sole Trader Businesses**  
**12.15 Calculation of Profits for Service Businesses**  
**12.16 Calculation of Profits for a Trading and a Service Business**  
**REVIEW QUESTIONS**

**CHAPTER 13 PARTNERSHIPS**  
**13.1 The Versatility of Partnerships**  
**13.2 Advantages and Disadvantages of the Partnership**  
**13.3 Partnership Agreement**  
13.3.1 Contents of Partnership Agreement  
**13.4 Provision of Partnership Act 1890 in the Absence of Partnership Deed**  
**13.5 Financial Statements of a Partnership**  
13.5.1 Appropriations of Profit  
13.5.2 Statement of Financial Position of Partnership  
**13.6 Accounting Records for Partners**  
13.6.1 Partners'Capital Accounts  
13.6.2 Benefits (Uses) of Having Separate Capita I Accounts  
13.6.3 Benefits (Uses) of Having Separate Current Accounts  
13.6.4 Reasons for Keeping Separate Partners' Capital and Current Account  
13.6.5 Drawings Accounts  
**13.7 Partners' Loan Accoun**t  
13.7.1 Reasons for Partners' loans in addition to Capital Accounts  
**13.8 Interest on Capital**  
**13.9 Interest on Drawings**  
**REVIEW QUESTIONS**

CHAPTER 14 LIMITED COMPANIES  
**14.1 The Need for Companies**  
**14.2 The Versatility of Limited Companies**  
**14.3 Advantages and Disadvantages of Forming a Limited Company**  
14.3.1 Advantages of a Company  
14.3.2 Disadvantages of Forming a Limited Company  
**14.4 Sources of Finance for a Commny**  
**14.5 Types of Shares**  
14.5.1 Ordinary Shares  
14.5.2 Preference Shares  
**14.6 Debentures**  
**14.7 Share Capital**  
**14.8 Financial Statements of Limited Companies**  
**14.9 Distribution of Profits**  
14.9.1 Ordinary Dividend  
14.9.2 Transfer to General Reserve  
14.9.3 Retained Profits  
**14.10 Statementof Changes in Equity**  
**14.11 Statementof Financial Position**  
**14.12 A Comparison of Financial Statements of Business Organisations**  
**REVIEW QUESTIONS**

CHAPTER 15 INCOMPLETE RECORDS  
**15.1 The Reasons for Incomplete Records**  
**15.2 Need for Premring Financial Statements from Incomplete Records**  
**15.3 Calculating Profits and Losses from Changes in Capital/Net Assets**  
15.3.1 Statement of Affairs  
15.3.2 Statement to Calculate Profit or Loss  
**15.4 Preparation of Financial Statements from Incomplete Records**  
15.4.1 Calculation of Opening Capital through Statement of Affairs  
15.4.2 Preparation of Cash/Bank Account  
15.4.3 Calculation of Total Sales  
15.4.4 Calculation of Total Purchases  
**15.5 Mark-Up and Margin**  
15.5.1 Use of Mark up and Margin to Calculate Missing Items in Trading Section  
15.5.2 Conversion of Mark-up into Margin  
15.5.3 Conversion of Margin into Mark-up  
**15.6 Calculation of Incomes/Expenses to be shown in Statement of Profitor Loss**  
**15.7 Calculation of Depreciation**  
**15.8 Premring Statement of Financial Position from Incomplete Records**  
**15.9 Advantages of Accounts Prepared from Incomplete Records**  
**15.10 Disadvantages or Defects of Accounts Prepared from Incomplete Records**  
**REVIEW QUESTIONS**

**CHAPTER 16 CLUBS AND SOCIETIES**  
**16.1 Comparison between Profit and Non-Profit Making Organisations**  
**16.2 Incomes and Expenses of Clubs and Societies**  
16.2.1 Incomes of Clubs and Societies  
16.2.2 Expenses of Clubs and Societies  
**16.3 Some Peculiar Terms of Clubs and Societies**  
16.3.1 Life Subscription  
16.3.2 Legacy  
16.3.3 Gift  
16.3.4 Grants and Donations  
**16.4 Accounting by clubs and Societies**  
16.4.1 Receipts and Payments Account  
16.4.2 Income and Expenditure Account  
16.4.3 Differences between Receipts and Payment A/c & Income and Expenditure A/c  
16.4.4 Trading Account  
16.4.5 Income and Expenses on Same Head  
**16.5 Calculation of Incomes/Expenses to be shown in Statement of Profitor Loss**  
16.5.1 Accounting for Subscriptions  
**16.6 Preparation of Financial Statements**  
**REVIEW QUESTIONS**

**CHAPTER 17 MANUFACTURING ACCOUNTS**  
**17.1 Direct Costs (Prime Cost)**  
17.1.1 Raw Materials Cost  
17.1.2 Direct Labour Cost  
17.1.3 Other Direct expenses  
**17.2Indirect Costs (Factory Overheads)**  
**17.3 Purpose of Manufacturing Accounts**  
**17.4 Statement of Profit or Loss**  
**17.5 Statement of Financial Position**  
**REVIEW QUESTIONS**

**CHAPTER 18 ACCOUNTING RATIOS**  
**18.1 Accounting Ratios**  
**18.2 Analysis of Ratios**  
18.2.1 Comparing one year with another (Trend or Time Series Analysis)  
18.2.2 Comparing One Business with another Business (Inter-firm Comparison)  
**18.3 Demonstration of ratios**  
**18.4 Profitability Ratios**  
18.4.1 Gross Profit Margin  
18.4.2 Profit Margin  
18.4.3 Return on Capital Employed (ROCE)  
**18.5 Liquidity Ratios**  
18.5.1 Current Ratio  
18.5.2 Acid Test (Liquid) Ratio  
**18.6 Efficiency Ratios**  
18.6.1 Rate of Inventory Turnover  
18.6.2 Trade Receivables'Turnover (days)  
18.6.3 Trade payables'Turnover (days)  
**18.7 The Difference between Cash and Profit**  
**18.8 Factors affecting the ratios of Two Businesses**  
**18.9 Problems of Inter-firm Comparison**  
**REVIEW QUESTIONS**

**CHAPTER 19 INTERESTED PARTIES**  
**19.1 Owners**  
**19.2 Managers**  
**19.3 Employees**  
**19.4 Bank**  
**19.5 Investors and lenders**  
**19.6 Suppliers**  
**19.7 Customers**  
**19.8 Government/Tax authorities**  
**19.9 Club members**  
**19.10 Public**  
**19.11 Environmental bodies**  
**REVIEW QUESTIONS**

**CHAPTER 20 LIMITATIONS OF ACCOUNTING STATEMENTS**  
**20.1 Historical Cost**  
20.1.1Over/Understatement of Assets  
20.1.2 Inaccurate representation  
20.1.3 Inflation and Currency Fluctuations  
**20.2 Application of Accounting Policies**  
20.2.1 Subjectivity  
20.2.2 Estimates and Judgments  
20.2.3 Manipulation Risk  
20.2.4 Lack of Comparability  
20.2.5 Inconsistencies  
**20.3 Non-Financial Aspects**  
20.3.1 Intangible Assets  
20.3.2 External Factors  
20.3.3 Sustainability and Social Impact  
20.3.4 Incomplete Picture  
**REVIEW QUESTIONS**

**CHAPTER 21 ACCOUNTING CONCEPTS**  
**21.1 Conventions and Concepts - An Implication**  
**21.2 Business entity Concept**  
**21.3 Consistency Concept**  
**21.4 Duality Concept**  
**21.5 Going Concern Concept**  
**21.6 Historic Cost Concept**  
**21.7 Materiality Concept**  
**21.8 Money Measurement Concept**  
**21.9 Prudence Concept**  
**21.10 Realisation Concept**  
**21.11 Accrual Concept**  
**21.12 Matching Concept**  
**21.13 Realisation, Accrual and Matching Concepts Compared**  
**REVIEW QUESTIONS**

**CHAPTER 22 ETHICAL CONSIDERATIONS**  
**22.1 Ethics Relating to the Practice of Accounting**  
**22.2 Professional Ethics**  
**22.3 What is Ethical?**  
**22.4 Fundamental Ethical Principles**  
22.4.1 Integrity  
22.4.2 Objectivity and Independence  
22.4.3 Professional Competence and Due Care  
22.4.4 Confidentiality  
22.4.5 Professional Behaviour  
**22.5 The Problems of Poor ethics in accounting**  
**22.6 Impact of ethical behaviour on stakeholders**  
**22.7 Impact of ethical behaviour on society**  
**22.8 Ethical Conflict**  
**REVIEW QUESTIONS**

**CHAPTER 23 TECHNOLOGY AND SUSTAINABILITY**  
**23.1 The use of digital applications for accounting records**  
23.1.1 Digital Applications  
23.1.2 Benefits of Digital Accounting  
**23.2 What is Accou nting Data?**  
23.2.1 Why is Accounting Data Important?  
**23.3 WHY STORE ACCOU NTING DATA SAFELY AND SUSTAINABLY?**  
**23.4 Risks of Not Storing Accounting Data Safely**  
**23.5 Risks of Not Storing Accounting Data Sustainably**  
**23.6 Types of Storage Systems**  
23.6.1 Manual Storage Systems  
23.6.2 Data Storage Devices  
23.6.3 Cloud Storage Services  
23.6.4 Other Digital Services  
REVIEW QUESTIONS

**SOLUTION TO ODD-NUMBERED QUESTIONS**

CHAPTER 1A-----317

CHAPTER IB-----318

CHAPTER 1C-----322

CHAPTER ID-----325

CHAPTER 2-----327

CHAPTER 3-----331

CHAPTER 4-----332

CHAPTER 5-----334

CHAPTER 6----339

CHAPTER 7-----342

CHAPTER 8-----343

CHAPTER 9-----344

CHAPTER 10-----347

CHAPTER 11-----350

CHAPTER 12-----350

CHAPTER 13-----357

CHAPTER 14-----361

CHAPTER 15-----364

CHAPTER 16-----367

CHAPTER 17-----371

CHAPTER 18-----374

CHAPTER 19-----379

CHAPTER 20-----379

CHAPTER 21-----380

CHAPTER 22-----380

CHAPTER 23-----381

**KEY TO EVEN-NUMBERED QUESTIONS                                  INDEX**

## Details

- **Price:** 1960.0 PKR
- **Vendor:** Read & Write
- **Tags:** Accounting, IGCSE, IGCSE Accounting, O Level, O Level Accounting

## Variants

| Variant | Price | Available |
|---------|-------|-----------|
| Default Title | 1960.00 PKR | In stock |

## Images

- 105 Accounting O Level/IGCSE Theory and Practice Book
- 105 Accounting O Level/IGCSE Theory and Practice Book
- 105 Accounting O Level/IGCSE Theory and Practice Book
- 105 Accounting O Level/IGCSE Theory and Practice Book
- 105 Accounting O Level/IGCSE Theory and Practice Book
- 105 Accounting O Level/IGCSE Theory and Practice Book
- 105 Accounting O Level/IGCSE Theory and Practice Book
- 105 Accounting O Level/IGCSE Theory and Practice Book
- 105 Accounting O Level/IGCSE Theory and Practice Book
- 105 Accounting O Level/IGCSE Theory and Practice Book

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> Updated: 2026-09-19