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Accounting concepts

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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

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Accounting concepts

  1. 1. Accounting Concepts
  2. 2. 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.
  3. 3. Transactions • 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.
  4. 4. Journal • 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.
  5. 5. Voucher • A voucher is a document containing the details of a financial transaction
  6. 6. Posting • Posting is the process by which information about transactions is transferred or moved to an account.
  7. 7. Accounting Period • A regular period of time such as a quarter or a year.
  8. 8. Trial Balance • 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.
  9. 9. 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 period. • Balance Sheet – The Balance Sheet is a statement that summarizes assets and liabilities of a business.
  10. 10. Assets • 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 asset.
  11. 11. Liabilities • The Amount payable by a business firm to an outsider is known as liability.
  12. 12. Sundry Debtors • The person from whom an amount is receivable is known as Sundry Debtor.
  13. 13. Sundry Creditors • The person to whom an amount is payable is known as Sundry Creditor.
  14. 14. Sales Sundry Debtors Receipt Sundry Debtors Purchase Sundry Creditors Payment Sundry Creditors
  15. 15. Steps for Accountings Steps Manual A/c Tally 1 Transactions   2 Journal Entry   3 Ledger   4 Trial Balance   5 Trading A/c   6 Profit & Loss A/c   7 Balance Sheet  
  16. 16. 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.
  17. 17. Trial Balance Trial Balance Dr Cr Direct Expenses (Factory Expenses) Eg: Wages Direct Incomes (Factory Incomes) Eg: Scrap Indirect Expenses (Office Expenses) Eg: Salary, Commission Paid Indirect Incomes (Office Incomes) Eg: Discount Recd, Comm. Recd
  18. 18. Thank You • Lets Start With Creating Company in Tally

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