5. WHAT IS
A JOURNAL?
Journal is a book where we record transactions in
a chronological order. It is also the book of
primary entry as all transactions are recorded
here before being posted in the ledger. The
process of recording transactions in a journal is
known as 'journalisation' while the transaction
itself is known as a 'journal entry'.
LEARN2INVEST |
YOUTUBE.COM/VIVEKBAJAJ
6. CASH
A/C
Dr. 45000
SALES
A/C
Cr. 45000
LEARN2INVEST |
YOUTUBE.COM/VIVEKBAJAJ
IF KREDENT INFOEDGE SOLD 40
COURSES @ RS 1000 EACH FOR
CASH, WHAT WOULD THE
JOURNAL ENTRY BE?
S
a
m
p
l
e
S
a
m
p
l
e
S
a
m
p
l
e
7. WHAT IS
A LEDGER?
As per the double entry system of bookkeeping,
each transaction leads to two entries in a journal.
These entries are then posted in their respective
accounts called ledgers. In simpler words, you
may be able to relate all information in major
financial statements being picked up from their
ledgers. General ledger is alo referred as the
principal book.
LEARN2INVEST |
YOUTUBE.COM/VIVEKBAJAJ
8. Dr. Cr.
DATE DESC. AMT. DATE DESC. AMT.
XXXX
To
Sales
45000
LEARN2INVEST |
YOUTUBE.COM/VIVEKBAJAJ
CASH A/C
SALES A/C
S
a
m
p
l
e
S
a
m
p
l
e
S
a
m
p
l
e
Dr. Cr.
DATE DESC. AMT. DATE DESC. AMT.
XXXX
By
Cash
45000
9. WHAT IS
P/L ACCOUNT?
This is the first financial statement that is
prepared by the company and is also referred to
as the income statement, statement of operations
and statement of earnings. As the name suggests,
this statement gives us insight into whether the
company is making profit or losses and also
summarises the company operations. It provides
us information of the revenue, expenses incurred,
depreciation, and finally taxes. It also includes the
earning per share number.
LEARN2INVEST |
YOUTUBE.COM/VIVEKBAJAJ
10. LET'S HELP YOU
FIGURE OUT
HOW TO
CREATE AND
READ A P/L
ACCOUNT!
LEARN2INVEST |
YOUTUBE.COM/VIVEKBAJAJ
11. WHAT IS
BALANCE SHEET?
Balance Sheet is the financial statement of the
company that tells us three key things about the
company. The first one is what the company
owns. The second one is what the company owes
and the final one what is the owner's equity. All of
this at a given point in time. Also, the balance
sheet only reflects a true picture if the assets and
liabilities tally i.e. Assets= Liabilities+Equity
LEARN2INVEST |
YOUTUBE.COM/VIVEKBAJAJ
12. LET'S HELP YOU
FIGURE OUT
HOW TO CREATE
AND READ A
BALANCE
SHEET!
LEARN2INVEST |
YOUTUBE.COM/VIVEKBAJAJ
13. WHAT IS
CASH FLOW
STATEMENT?
Cash Flow Statement is a financial statement of
the company that tells us about the generation
and expense of cash in a company. This
statement helps us understand the company
operations and has three major components
namely: Cash from Operating Activities, Cash from
Investing Activities and Cash from Financial
Activities.
LEARN2INVEST |
YOUTUBE.COM/VIVEKBAJAJ
14. LET'S HELP YOU
FIGURE OUT
HOW TO CREATE
AND READ A
CASH FLOW
STATEMENT!
LEARN2INVEST |
YOUTUBE.COM/VIVEKBAJAJ
15. WHAT IS
ANNUAL REPORT?
As the name suggests, the annual report is
published by the concerned company annually
and sent to all shareholders. It is also available for
download publicly at the company website
(usually in the investor's section). All data
mentioned in the annual report is dated to 31st
March (end of the financial year). Being an official
document, it is a detailed report of the company
financials and the company's message to its
investors. It also includes broader analysis of the
way ahead for the company.
LEARN2INVEST |
YOUTUBE.COM/VIVEKBAJAJ
16. X-RAY ITEMS IN AN
ANNUAL REPORT!
Footnotes
Every financial
statement comes
with footnotes next
to figures and they
form the crux on
how the numbers
are arrived at.
Schedules
Schedules provide
other data like
depreciation, capital
expenditure,
operational
expenditure, etc.
and help in analysis.
LEARN2INVEST |
YOUTUBE.COM/VIVEKBAJAJ
17. MRI ITEMS IN AN
ANNUAL REPORT!
Management
Discussions
One of the most
important sections
as this tells us
about
management's take
on the company.
Corporate
Governance
This sections tells us
about the best practices
employed by the
company to operate in a
legal framework and the
loopholes.
LEARN2INVEST |
YOUTUBE.COM/VIVEKBAJAJ