Accounting Concepts - Accounting Concepts are an introduction to Tally Accounting Concepts. Tally Accounting Concepts will increase more knowledge of Tally. Accounting Concepts are very necessary for a student to learn. All Tally Accounting Concepts will be covered here
Account v/s Accounting
• An account is a statement of transactions that affect any particular
assets, liability, expense, income.
• Accounting is the Act of recording, classifying, summarizing
transactions of an organization and interpreting the results.
• Exchange of goods and services for money or money’s worth between
two or more persons or parties is known as Transaction.
• Cash Transaction – When goods are exchanged for cash it is
known as Cash Transaction.
E.g. ‘A’ purchased goods from ‘B’ and paid cash.
• Credit Transaction – When cash is not paid or received in
exchange of goods and service, is known as Credit Transaction.
• Journal is a book in which business transactions are entered in
chronological order. A record of single business transaction is called
Journal entry. Every journal entry is supported by a voucher.
• A voucher is a document containing the details of a financial
• Posting is the process by which information about transactions is
transferred or moved to an account.
• A regular period of time such as a quarter or a year.
• A trial balance is a list of all ledger accounts. It is prepared after,
• All the transactions are entered in the Journal,
• Journal entries posted to the Ledger and
• The Ledger accounts are balanced.
Three basic Statements of Accounts
• Trading A/c – It is prepared to get the Gross Profit earned by the
organization over a specified period.
• Profit & Loss A/c – It gives the Net Profit earned by the company,
after considering all other incomes and expenses incurred over a
• Balance Sheet – The Balance Sheet is a statement that summarizes
assets and liabilities of a business.
• All the properties held by a businessman, uses without any intention
of selling at profit are called assets. Anything which belongs to you
and which is saleable in market. Any income receivable is also an
• The Amount payable by a business firm to an outsider is known as
• The person from whom an amount is receivable is known as Sundry
• The person to whom an amount is payable is known as Sundry
Golden Rules of Accounts
• Real A/c – Debit what Comes In
Credit what Goes Out.
• Personal A/c – Debit the Receiver
Credit the Giver.
• Nominal A/c – Debit all Expenses & Losses
Credit all Incomes & Gains.