Book keeping accounting

2. Book keeping
accounting

3. Transaction
• There are two aspects of a transaction:
Transaction
Debit credit
(Dr.) (Cr.)

4. Types of accounts
• There are three types of A/C’s
personal real nominal
individuals assets income & exp.

5. Rules of classification of
Dr./Cr.
personal a/c:
Dr. the receiver
Cr. The giver
Real a/c:
Dr. what comes in
Cr. What goes out
Nominal a/c:
Dr. all expenses & losses
Cr. All incomes & gains

6. Book keeping process
1 Transactions are classified and a voucher is passed with Dr. &
Cr. Heads.
2 The voucher is recorded in the books of prime entry.
(cash book, pur. Book, sales book, journal)
3 posting into genral ledger.
4 trial balance
5 Trading & profit & loss a/c.
(all the nominal a/c’s are taken in P&l a/c)
6 balance sheet
( all the real and personal a/c’s are taken in B/S)

7. Example: journal
1. Cash introduced by x as capital
Cash a/c Dr. 20000
To capital a/c 20000
( being cash introduced)
2. Purchased goods worth 15000 out
of which 5000 was paid to x as cash
& remaining 10000 on credit.
Purchases a/c Dr. 15000
To cash a/c 5000
To Mr. x a/c 10000
( being goods purchased)

8. 3. Sold goods purchased for a sum of
19000. out of which 4000 was
received as cash & 15000 sale were
given on credit.
Cash a/c Dr. 4000
Y a/c Dr. 15000
To sales 19000
( being goods sold)
4. Paid rent of shop 2000.
Rent a/c Dr. 2000
To cash a/c 2000
(being rent paid)

9. 5. Purchase furniture worth Rs. 3000
Furniture a/c Dr. 3000
To cash 3000
(Being furniture purchased)

10. Ledger a/c’s
Cash a/c
To capital a/c 20000 By purchases a/c 5000
To sales a/c 4000 By rent a/c 2000
By furniture a/c 3000
By balance c/d 14000
24000 24000

11. To balance c/d 20000 By cash 20000
20000 20000
Purchase a/c
To cash 5000 By balance c/d 15000
To x 10000
15000 15000
Sales a/c
By cash 4000
capital a/c
To balance c/d 19000 By y 15000
19000 19000

12. Mr. x
To balance c/d 10000 By purchases 10000
10000 10000
Mr. y
To sales 15000 By balance c/d 15000
15000 15000
Rent a/c
To cash 2000 By balance C/d 2000
2000 2000
Furniture a/c
To cash 3000 By balance c/d 3000
3000 3000

13. Trial balance
Trial balance
Dr. Cr.
Cash a/c 14000
Capital a/c 20000
Purchases a/c 15000
Sales a/c 19000
Mr. x a/c 10000
Mr. y a/c 15000
Rent a/c 2000
Furniture a/c 3000
49000 49000

14. Profit and loss a/c
P&l a/c
To purchases 15000 By sales 19000
To rent 2000
To profit (transfer to capital
a/c)
2000
19000 19000

15. Balance sheet
B/S
liabilities assets
Capital a/c 20000 Cash a/c 14000
+ profit 2000 22000 Mr. y (debtor) 15000
Mr. x (creditor) 10000 furniture 3000
32000 32000