ppt on recording accounting

1. Submitted To:
Dr. Sunil
Presented By:
Sneh Rohilla

2. Accounting is often called language of
business. Accounting communicate the result
of business to users of accounting information
to enable them make reasoned decision.
Define
“Accounting is a art of recording,
classifying and summarising in a significant
manner and the terms of money, transactions
and events which are part of financial character
and interpreting the result thereof.
(A.I.C.P.A)

3. Basis of
Distinction
Book-keeping Accounting Accountancy
Meaning Book-keeping is
a art of
recording in
book of
accounts in
monetary aspect
of financial
transaction.
Accounting is
concern with
recording,
classifying, and
summarising of
transaction.
Accountancy is
body of
knowledge
prescribing
certain rules or
principal to be
observed while
recording,
classifying, and
summarising of
transaction.
Relation Book-keeping is
primary stage.
Accounting
starts where
book-keeping
ends.
Accountancy
depends upon
both book-
keeping and
accounting.

4.  Provide complete and systematic record.
 Information regarding profit and loss
account of business.
 Properly maintained accounts, supported by
authenticated document are accepted by
courts as a firm evidence.
 If business entity is being sold, the
accounting information can be utilised to
determine the proper price.

5.  Accounts are prepared on the basis of
historical cost.
 Accounting statement provide only
incomplete information because the actual
profit or loss of business can be known only
when business closed down.
 Affected by Window Dressing.
 Omission of Qualitative Information.
 Unsuitable for Forecasting.

6. Every transaction is recorded as having dual
aspect. It is because of this principal that
the two side of balance sheet are always
equal.
Assets = Liabilities + Equity
For Example:
 X Commences business with
Rs.2,00,000 in cash and loan of
Rs.5,00,000 from bank and these Rs.
15,00,000 are used in buying some assets.

7.  Equation will be:
Assets = Liabilities +
Equity
Cash + Fixed Assets = Loan +
Common stock
+Rs.10,00,000 + Rs.15,00,000 = +Rs.5,00,000 +
Rs.20,00,000.
 Rs.20,000 Salary paid to Employees.
Assets = Liabilities+
Equity
Cash = +
Retain earning
-Rs. 20,000 = -
Rs. 20,000

8. Every business transaction has two-fold
effect and that it affect two Account in opposite
directions and if a complete record were to be
made of each transaction, it would be
necessary to debit one account and credit
another account.
History
 First book on double entry system was written
by Luca Pacioli in 1494, Italy.
 After so many changes finally a complete book
named as ‘ English System of Book-Keeping’
written by Edward Jones in 1785.

9. Characteristics
 Every business transaction affects two
accounts Debit and Credit.
 Recording of both personal and impersonal
aspect.
Classification Of Accounts
Personal Account Impersonal Account
Real Account Nominal Account

10.  Recording is made according to certain
specified Rule.
i. Personal Account : Debit the Receiver and
Credit the Giver.
ii. Real Account : Debit What Comes In and Credit
What Goes Out.
iii. Nominal Account : Debit All Expenses & Loss and
Credit All Income & Gain.

11.  Complete record of each and every
transaction.
 Profit and loss account can be easily
prepared.
 Help in knowing financial position of
business.
 Lesser possibility of fraud.
 Helps management in decision making.

12.  Number of books are kept under this
system so system is too expensive.
 Requires expert knowledge.
 Errors of Omission.
 Errors of Commission.
 Errors of Principal.
 Compensating Errors.

13. Journal
Ledger
Trial balance
Final accounts

14. Journal is one of the basic book of original
entry in which transaction are originally
recorded in day to day order.
 Entry
Recording of transaction in appropriate place
of concerned book is known as entry.
 Journal entry
 Ledger entry

15.  Date: In first column date of transaction is
entered.
 Particular: Name of account to be debited
with word “Dr” at the end of line. The credit
account start with “To” a few space away
from margin.
 Narration: After each entry a brief
explanation of transaction is given in the
form of narration.
 Ledger folio: All entry from journal are later
posted in ledger account. Page no or folio
no is known as ledge folio.


16.  Each transaction is recorded as soon as it
take place.
 Journal show the complete story of
transaction.
 Any mistake in ledger can be easily
detected.
 Day to day transaction are recorded with
narration.

17. i. 1 April Ram started business with cash
$2,00,000.
ii. 3 April Purchased office furniture for cash
$20,000.
iii. 8April Purchase goods from Vishal trading
co. $25,000.
iv. 14 April Sold goods for cash $30,000.
v. 18 April Paid $20,000 to Vishal trading co.
in full settlement of account.

18. Date Particular L.F Amount Amount
April1 Cash A/C Dr
To Capital A/C
(capital bought by ram)
2,00,000
2,00,000
April3 Furniture A/C Dr
To Cash A/C
(purchase furniture for cash)
20,000
20,000
April8 Purchase A/C Dr
To Vishal A/C
(purchase goods on credit from vishal)
25,000
25,000
April14 Cash A/C Dr
To Sale A/C
(good sold for cash)
30,000
30,000
April18 Vishal A/C Dr
Discount A/C Dr
To Cash A/C
(payment made to vishal in
fullsettalment)
20,000
5,000
25,000

19. i. 1 April Jay commenced business with cash
$50000.
ii. 2 April purchased goods for cash $20000.
iii. 9 April sold goods to mahesh $15000.
iv. 27 April rent paid $400.
v. 30 April Paid salary to gopal.

20. Date Particular L.F Amount Amount
April 1 Cash A/C Dr
To Capital A/C
(cash bought into business by jay as
capital)
50000
50000
April 2 Purchase A/C Dr
To Cash A/C
(goods purchase for cash)
20000
20000
April 9 Mahesh Dr
To Sale A/C
(good sold for cash)
15000
15000
April 27 Rent A/C Dr
To Cash A/C
(rent paid)
400
400
April 30 Salary A/C Dr
To Cash A/C
(salary paid)
1200
1200

21. Define
 Collection of entire group of similar account
in double entry book keeping.
 It record classified and summarized
financial information from journal.
 Follow same accounting principal as manual
system.

22.  It is used to classify information.
 It contain all account.
 It provide summary of closing balance.
 It facilitates payment and collection.

23.  It store house of all information which
subsequently used for preparing final account
and financial account.
 It is destination of all entry made in journal.
 It is stepping stone for preparing trial
balance.

24. i. 1 April Ram started business with cash
$2,00,000.
ii. 3 April Purchased office furniture for cash
$20,000.
iii. 8April Purchase goods from Vishal trading
co. $25,000.
iv. 14 April Sold goods for cash $30,000.
v. 18 April Paid $20,000 to Vishal trading co.
in full settlement of account.

25. Cash account
date particular j.f amount Date particular j.f amount
1apr To capital 200000 13 By furniture 20000
14 To sale 30000 18 By vishal 20000
By discount 5000
Balance c/d 185000
230000 230000

26. Capital
date particular j.f amount Date partiular j.f amount
Balance c/d 200000 1 By cash 200000
200000 200000

27. Date Particular J.F Amt Date Particular J.F Amt
3 By Cash 20000 Balance
C/D
20000
20000 20000

28. date particular j.f amt date particular j.f amt
8 By vishal 25000 Balance
c/d
25000
25000 25000

29. date particular j.f amt date particular j.f amt
18 By cash 20000 8 purchase 25000
Balance
c/d
5000
25000 25000

30. Date Particular j.f Amt Date Particular j.f Amt
Balance
c/d
30000 14 cash 30000
30000 30000

31. Date Particular j.f Amt Date Particular j.f Amt
18 cash 5000 Balance
c/d
5000
5000 5000

32. Define
 Statement show summary of balance of all
account.
 Show final position.
 Help in preparing final statement.
 Prepared at the end of year.

33.  To check the equality of debit and credit.
 To provide information for use in preparing
final account.

34.  It present to businessman a consolidate list
of all ledger.
 It is shortest method of verifying the
arithmetical accuracy of entry.

35. Name of account l.f Amount
Dr
Amount
Cr
Cash 185000
Capital 200000
Furniture 20000
Purchase 25000
Vishal 5000
Sale 30000
Discount 5000
total 235000 235000

36. Thankyou