1. Woodcraft Company began business on September 1 with Rs 10,000 cash investment.
2. It paid 2 months rent in advance of Rs 2,000 and bought equipment for Rs 1,200.
3. On September 7, it purchased supplies of Rs 700 on credit.
4. It received payment for services, paid advertisements, and received further payment for furnishing work. Various expense and revenue accounts were recorded through debits and credits to the cash account.
The ledger is the principal book of accounting that contains accounts where transactions are recorded. It collects all accounts from the journal and special journals. The ledger is useful for ascertaining the net result of transactions in an account on a given date. It organizes accounts by debit and credit sides, records journal folio references, and amounts. Ledger accounts are classified into five categories: assets, liabilities, capital, revenues/gains, and expenses/losses. Temporary accounts are closed at period end by transferring them to trading and profit and loss, while permanent accounts appear on the balance sheet.
The document provides an overview of the history and evolution of accounting practices. It discusses how accounting originated in ancient civilizations like Babylon in 2600 BC and evolved into the double-entry system in 15th century Italy. It then covers the introduction of modern accounting in India in 1850 and defines key accounting concepts like bookkeeping, accounting, financial accounting, and cost accounting. Finally, it outlines the major users and principles of accounting.
Business transactions involve the exchange of value, such as goods or services for money, between two or more entities. There are two main types of transactions: cash transactions involving an exchange of cash, and credit transactions where payment is promised at a future date. Capital refers to the value invested in a business by its owner, while drawings refer to amounts withdrawn by the owner. Assets are items owned by a business that have value, and liabilities are amounts owed to outside parties. Revenue is the income generated from sales or services, while expenses are costs incurred to generate that revenue.
This document provides definitions for 49 accounting terms. It is from a chapter that outlines key terms used in accounting. Some of the terms defined include assets, liabilities, revenue, expenses, profit, loss, transactions, capital, and accounts. For each term, a brief definition or explanation is given in bullet point form. The document serves to introduce foundational concepts and vocabulary for accounting.
The document discusses the history and evolution of accounting. It describes how accounting originated from barter systems where goods and services were directly exchanged. As commercial activities increased during the Industrial Revolution, financial record keeping became more important. The role of accountants has also evolved over time from mere record keeping to providing decision-making support in areas like forensic accounting, e-commerce, financial planning, and environmental accounts. Accounting provides important information about business transactions, earnings, expenses, assets, and liabilities.
This document provides an introduction to the concepts of accounting. It defines accounting as a system that collects and processes financial information to allow informed decisions by users. It discusses the need for accounting to determine results of business transactions and the financial position. It outlines the key functions of accounting like identifying, recording, classifying, summarizing, analyzing, interpreting and communicating financial information. It also discusses the accounting cycle and different branches and users of accounting information. Finally, it provides definitions of some basic accounting terms.
The ledger is the principal book of accounting that contains accounts where transactions are recorded. It collects all accounts from the journal and special journals. The ledger is useful for ascertaining the net result of transactions in an account on a given date. It organizes accounts by debit and credit sides, records journal folio references, and amounts. Ledger accounts are classified into five categories: assets, liabilities, capital, revenues/gains, and expenses/losses. Temporary accounts are closed at period end by transferring them to trading and profit and loss, while permanent accounts appear on the balance sheet.
The document provides an overview of the history and evolution of accounting practices. It discusses how accounting originated in ancient civilizations like Babylon in 2600 BC and evolved into the double-entry system in 15th century Italy. It then covers the introduction of modern accounting in India in 1850 and defines key accounting concepts like bookkeeping, accounting, financial accounting, and cost accounting. Finally, it outlines the major users and principles of accounting.
Business transactions involve the exchange of value, such as goods or services for money, between two or more entities. There are two main types of transactions: cash transactions involving an exchange of cash, and credit transactions where payment is promised at a future date. Capital refers to the value invested in a business by its owner, while drawings refer to amounts withdrawn by the owner. Assets are items owned by a business that have value, and liabilities are amounts owed to outside parties. Revenue is the income generated from sales or services, while expenses are costs incurred to generate that revenue.
This document provides definitions for 49 accounting terms. It is from a chapter that outlines key terms used in accounting. Some of the terms defined include assets, liabilities, revenue, expenses, profit, loss, transactions, capital, and accounts. For each term, a brief definition or explanation is given in bullet point form. The document serves to introduce foundational concepts and vocabulary for accounting.
The document discusses the history and evolution of accounting. It describes how accounting originated from barter systems where goods and services were directly exchanged. As commercial activities increased during the Industrial Revolution, financial record keeping became more important. The role of accountants has also evolved over time from mere record keeping to providing decision-making support in areas like forensic accounting, e-commerce, financial planning, and environmental accounts. Accounting provides important information about business transactions, earnings, expenses, assets, and liabilities.
This document provides an introduction to the concepts of accounting. It defines accounting as a system that collects and processes financial information to allow informed decisions by users. It discusses the need for accounting to determine results of business transactions and the financial position. It outlines the key functions of accounting like identifying, recording, classifying, summarizing, analyzing, interpreting and communicating financial information. It also discusses the accounting cycle and different branches and users of accounting information. Finally, it provides definitions of some basic accounting terms.
This document provides an overview of basic accounting principles for an 11th grade class. It defines accounting as recording, summarizing, reporting and analyzing financial transactions. Generally Accepted Accounting Principles (GAAP) establish uniform rules for recording transactions to bring consistency to financial statements. Key principles discussed include the business entity, money measurement, going concern, accounting period concepts as well as revenue recognition, matching, accrual, full disclosure, consistency and conservatism. The objectives are for students to understand and apply these principles when recording business transactions.
Accounting is the technique of recording, classifying, and summarizing financial transactions and interpreting the results. It involves recording business transactions in journals and ledgers, grouping like transactions, and preparing financial statements like the trial balance, income statement, and balance sheet. The double-entry system records both aspects of each transaction to ensure accuracy and allow calculation of profit and financial position. Financial accounting focuses on external reporting while cost and management accounting support internal decision making.
This document discusses subsidiary books, which are books of original entry where transactions are first recorded. It provides examples of common subsidiary books like purchase books, sales books, cash books, bills receivable books and bills payable books. It also discusses the advantages of using subsidiary books and their various formats.
A trial balance is a financial statement that lists the debit and credit balances of all accounts in the general ledger. It is prepared to check the arithmetic accuracy of the ledger accounts and help detect errors. The trial balance is not a conclusive proof of accuracy as certain errors may remain undetected even if the debit and credit totals match. Common errors include omissions, incorrect postings, or wrong account balances. If errors cannot be found, a suspense account is used to temporarily balance the trial balance.
This document discusses key accounting concepts and conventions. It describes 12 major concepts: business entity, going concern, money measurement, accounting period, cost, dual aspect, realization, matching, materiality, full disclosure, conservatism, and consistency. It provides examples and explanations of how each concept is applied in accounting practices and financial reporting.
This document provides an overview of key concepts in accounting theory and principles, including:
1) It defines common accounting terms like assets, liabilities, capital, revenues, and expenses. It also distinguishes between current and non-current assets/liabilities.
2) It outlines important accounting principles like business entity, dual aspect, accounting period, going concern, cost, and matching.
3) It discusses the objectives of accounting, accounting records like vouchers, and concepts like materiality, full disclosure, consistency and objectivity in financial reporting.
1) The accounting equation shows that a company's assets are always equal to its liabilities plus equity.
2) Double entry accounting requires every transaction to have equal debits and credits so the accounting equation remains balanced.
3) Examples of transactions that affect the accounting equation include purchasing inventory, receiving payment from customers, and paying expenses.
This document provides an overview of accounting concepts and principles. It defines accounting as identifying, recording, classifying and summarizing financial transactions and interpreting the results. The key characteristics are that accounting is an art that involves recording transactions in money terms and interpreting results. The main objectives of accounting are to provide financial information to various stakeholders like owners, creditors, and tax authorities.
Ledger in financial accounting (11th commerce)Yamini Kahaliya
This presentation is on ledger which is the topic of financial accounting. it contents details about following points. There are:-
1. Meaning of ledger
2. Need & Importance of ledger
3. Advantage of Ledger
4. Difference b/w Journal & ledger
5. Format of ledger
6. Rules of posting
7. Illustrations
8. Exercise
This presentation is based on the subject Financial Accounting which helps the beginners to know the basic concept of accounting . This is according to the syllabus of Pt. Ravishankar University , Raipur and Durg University, Durg.
- The document discusses key steps in the accounting process including preparing trial balance, final accounts (trading account, profit & loss account, balance sheet), and various adjustments needed for the financial statements.
- It provides examples and explanations of key final account components like trading account, profit & loss account, balance sheet, and adjustments for closing stock, outstanding expenses, prepaid expenses, accrued income, and more.
- The purpose is to explain how to close accounts and prepare final financial statements that show the profit/loss for the period and current financial position.
This document discusses key accounting concepts and principles, including:
- Business entity, which treats a business and its owners as separate entities
- Money measurement, which records all transactions in monetary terms
- Going concern, which assumes a business will continue operating indefinitely
It also outlines principles such as historical cost, conservatism, consistency, and disclosure, and how they guide financial reporting. Challenges in revenue and expense recognition are addressed, along with users of financial statements and limitations of conventional reports.
Here are the journal entries for the transactions:
Jan 1: Capital 80,000
To Cash 80,000
(Commenced business with cash)
Jan 2: Bank 40,000
To Cash 40,000
(Deposited cash in bank)
Jan 3: Purchases 5,000
To Cash 5,000
(Purchased goods by paying cash)
Jan 4: Purchases 10,000
To Lipton & Co. 10,000
(Purchased goods from Lipton & Co. on credit)
Jan 5: Cash 11,000
To Sales 11,000
(Sold goods to Joy and received cash)
The document discusses key accounting principles including the four main financial statements, the basic accounting equation, and different types of accounts. It also covers topics like accrual versus cash accounting, depreciation, financial analysis methods, and financial ratios used to evaluate business performance and health. The document is intended to provide an overview of basic accounting concepts.
It's a good presentation for those students who just started to learn accounting.
Basic theory of accounting must be clear, and there for here I have uploaded this presentation.
This document defines key concepts related to ledgers. It begins with defining a ledger as a summary of all transactions relating to an account over a period of time, showing the net effect. It then provides a flow chart and discusses the utilities of ledgers, including providing quick information on accounts, controlling transactions, preparing trial balances and financial statements. The document also covers the format of ledger accounts, the distinction between journals and ledgers, and the procedures for posting transactions to ledgers, including opening entries, compound entries, and balancing accounts.
This document provides an introduction to financial accounting. It discusses the development of accounting from ancient texts through modern times. Accounting involves recording, classifying, summarizing, analyzing and communicating financial transactions. The main users of accounting information are proprietors, managers, creditors, bankers, investors and governments. Accountants work either in public practice providing auditing and other services, or employed within businesses. The objectives of financial accounting are to keep records, protect assets, determine profits/losses, ascertain financial position and facilitate decision making.
The document discusses the need for changes to accounting information systems to better meet the needs of modern businesses and information users. It notes that the current systems were designed based on pre-computer thinking and that information customers are dissatisfied with the quality and timeliness of information provided. The accounting profession must reinvent how information is gathered, stored, and provided or risk being replaced. The document advocates broadening the types of business events captured beyond just accounting transactions to provide more relevant information to decision makers.
This document provides an introduction to computerized accounting. It discusses the meaning of computerized accounting and how it differs from traditional manual accounting systems. The key steps in the computerized accounting process are outlined, including entering data, coding, bank reconciliation, posting, and generating reports. The major advantages of computerized accounting systems are speed, accuracy, and the ability to easily store and share large amounts of data. However, initial investment and security risks are disadvantages. Components of a computerized financial accounting system and the process for setting up a new company in Peachtree accounting software are also overviewed.
This document provides an overview of basic accounting principles for an 11th grade class. It defines accounting as recording, summarizing, reporting and analyzing financial transactions. Generally Accepted Accounting Principles (GAAP) establish uniform rules for recording transactions to bring consistency to financial statements. Key principles discussed include the business entity, money measurement, going concern, accounting period concepts as well as revenue recognition, matching, accrual, full disclosure, consistency and conservatism. The objectives are for students to understand and apply these principles when recording business transactions.
Accounting is the technique of recording, classifying, and summarizing financial transactions and interpreting the results. It involves recording business transactions in journals and ledgers, grouping like transactions, and preparing financial statements like the trial balance, income statement, and balance sheet. The double-entry system records both aspects of each transaction to ensure accuracy and allow calculation of profit and financial position. Financial accounting focuses on external reporting while cost and management accounting support internal decision making.
This document discusses subsidiary books, which are books of original entry where transactions are first recorded. It provides examples of common subsidiary books like purchase books, sales books, cash books, bills receivable books and bills payable books. It also discusses the advantages of using subsidiary books and their various formats.
A trial balance is a financial statement that lists the debit and credit balances of all accounts in the general ledger. It is prepared to check the arithmetic accuracy of the ledger accounts and help detect errors. The trial balance is not a conclusive proof of accuracy as certain errors may remain undetected even if the debit and credit totals match. Common errors include omissions, incorrect postings, or wrong account balances. If errors cannot be found, a suspense account is used to temporarily balance the trial balance.
This document discusses key accounting concepts and conventions. It describes 12 major concepts: business entity, going concern, money measurement, accounting period, cost, dual aspect, realization, matching, materiality, full disclosure, conservatism, and consistency. It provides examples and explanations of how each concept is applied in accounting practices and financial reporting.
This document provides an overview of key concepts in accounting theory and principles, including:
1) It defines common accounting terms like assets, liabilities, capital, revenues, and expenses. It also distinguishes between current and non-current assets/liabilities.
2) It outlines important accounting principles like business entity, dual aspect, accounting period, going concern, cost, and matching.
3) It discusses the objectives of accounting, accounting records like vouchers, and concepts like materiality, full disclosure, consistency and objectivity in financial reporting.
1) The accounting equation shows that a company's assets are always equal to its liabilities plus equity.
2) Double entry accounting requires every transaction to have equal debits and credits so the accounting equation remains balanced.
3) Examples of transactions that affect the accounting equation include purchasing inventory, receiving payment from customers, and paying expenses.
This document provides an overview of accounting concepts and principles. It defines accounting as identifying, recording, classifying and summarizing financial transactions and interpreting the results. The key characteristics are that accounting is an art that involves recording transactions in money terms and interpreting results. The main objectives of accounting are to provide financial information to various stakeholders like owners, creditors, and tax authorities.
Ledger in financial accounting (11th commerce)Yamini Kahaliya
This presentation is on ledger which is the topic of financial accounting. it contents details about following points. There are:-
1. Meaning of ledger
2. Need & Importance of ledger
3. Advantage of Ledger
4. Difference b/w Journal & ledger
5. Format of ledger
6. Rules of posting
7. Illustrations
8. Exercise
This presentation is based on the subject Financial Accounting which helps the beginners to know the basic concept of accounting . This is according to the syllabus of Pt. Ravishankar University , Raipur and Durg University, Durg.
- The document discusses key steps in the accounting process including preparing trial balance, final accounts (trading account, profit & loss account, balance sheet), and various adjustments needed for the financial statements.
- It provides examples and explanations of key final account components like trading account, profit & loss account, balance sheet, and adjustments for closing stock, outstanding expenses, prepaid expenses, accrued income, and more.
- The purpose is to explain how to close accounts and prepare final financial statements that show the profit/loss for the period and current financial position.
This document discusses key accounting concepts and principles, including:
- Business entity, which treats a business and its owners as separate entities
- Money measurement, which records all transactions in monetary terms
- Going concern, which assumes a business will continue operating indefinitely
It also outlines principles such as historical cost, conservatism, consistency, and disclosure, and how they guide financial reporting. Challenges in revenue and expense recognition are addressed, along with users of financial statements and limitations of conventional reports.
Here are the journal entries for the transactions:
Jan 1: Capital 80,000
To Cash 80,000
(Commenced business with cash)
Jan 2: Bank 40,000
To Cash 40,000
(Deposited cash in bank)
Jan 3: Purchases 5,000
To Cash 5,000
(Purchased goods by paying cash)
Jan 4: Purchases 10,000
To Lipton & Co. 10,000
(Purchased goods from Lipton & Co. on credit)
Jan 5: Cash 11,000
To Sales 11,000
(Sold goods to Joy and received cash)
The document discusses key accounting principles including the four main financial statements, the basic accounting equation, and different types of accounts. It also covers topics like accrual versus cash accounting, depreciation, financial analysis methods, and financial ratios used to evaluate business performance and health. The document is intended to provide an overview of basic accounting concepts.
It's a good presentation for those students who just started to learn accounting.
Basic theory of accounting must be clear, and there for here I have uploaded this presentation.
This document defines key concepts related to ledgers. It begins with defining a ledger as a summary of all transactions relating to an account over a period of time, showing the net effect. It then provides a flow chart and discusses the utilities of ledgers, including providing quick information on accounts, controlling transactions, preparing trial balances and financial statements. The document also covers the format of ledger accounts, the distinction between journals and ledgers, and the procedures for posting transactions to ledgers, including opening entries, compound entries, and balancing accounts.
This document provides an introduction to financial accounting. It discusses the development of accounting from ancient texts through modern times. Accounting involves recording, classifying, summarizing, analyzing and communicating financial transactions. The main users of accounting information are proprietors, managers, creditors, bankers, investors and governments. Accountants work either in public practice providing auditing and other services, or employed within businesses. The objectives of financial accounting are to keep records, protect assets, determine profits/losses, ascertain financial position and facilitate decision making.
The document discusses the need for changes to accounting information systems to better meet the needs of modern businesses and information users. It notes that the current systems were designed based on pre-computer thinking and that information customers are dissatisfied with the quality and timeliness of information provided. The accounting profession must reinvent how information is gathered, stored, and provided or risk being replaced. The document advocates broadening the types of business events captured beyond just accounting transactions to provide more relevant information to decision makers.
This document provides an introduction to computerized accounting. It discusses the meaning of computerized accounting and how it differs from traditional manual accounting systems. The key steps in the computerized accounting process are outlined, including entering data, coding, bank reconciliation, posting, and generating reports. The major advantages of computerized accounting systems are speed, accuracy, and the ability to easily store and share large amounts of data. However, initial investment and security risks are disadvantages. Components of a computerized financial accounting system and the process for setting up a new company in Peachtree accounting software are also overviewed.
The document defines a bill of exchange as a written instrument containing an unconditional order from a creditor (drawer) to a debtor (drawee) to pay a specified amount of money to a person (payee). There are three parties to a bill of exchange: the drawer, drawee, and payee. The drawer makes the order, the drawee is directed to pay, and the payee receives the money. A bill of exchange must be in writing, contain an express order to pay, specify three definite parties, state a certain amount of money payable in legal tender, and comply with formalities like date and stamp.
Definition,:A bill of exchange is an order in writing ,directing a person to pay a sum of money, to a specified person.
Negotiable Instruments Act, 1881
Acts, conclusion, parties involved, specimen examples, essential elements, Difference between promissory note and bills of exchange.
It must contain an express Order to pay money
presentation slide on Accounting General ledger & trial balanceDaySpring Limited
This presentation discusses the general ledger, trial balance, and their purpose and process. The general ledger contains all balance sheet accounts and records transactions through debits and credits. A trial balance is created by summing the balances of each ledger account and comparing total debits to total credits to check for errors. An example transaction is provided to demonstrate preparing ledger accounts and a trial balance.
Journal, Ledger, Trial Balance and Balance SheetSadat Faruque
The document discusses journal entries, ledger accounts, and financial statements including trial balance and balance sheet. It provides examples of journal entries for various transactions for a company named A & Co. It then shows the corresponding ledger accounts including the sales account. It discusses the purpose and limitations of a trial balance. Finally, it outlines the format of a balance sheet according to the Companies Act of 1956 including assets, liabilities, and the classification of items.
The document provides details of transactions recorded in the books of Woodcraft Company from September 1-23. It summarizes the opening of 8 T-accounts - Cash, Capital, Rent in Advance, Equipment, Supplies, Creditors, Advertisement, and Revenue from Service to record the company's various business transactions which include starting the business with cash investment, purchasing equipment, supplies and advertisement, receiving payments from customers for work done, and billing customers.
This document discusses key accounting concepts including accounts, the accounting cycle, debits and credits, journals, and trial balances. It explains that accounts track increases and decreases as debits and credits. There are permanent accounts on the balance sheet and temporary accounts for the income statement. The accounting cycle involves recording transactions, posting to ledgers, preparing trial balances, and generating financial statements. Debits increase assets and expenses and decrease liabilities, owners' equity, and revenues. Credits have the opposite effect. The journal records transactions and the trial balance proves the accounting equation that debits equal credits.
Accounting is the process of communicating financial information about a business to users through financial statements, and involves recording, classifying, and summarizing financial transactions according to principles like debits and credits, assets and liabilities, and the accounting equation. There are three main types of accounting: tax, managerial, and financial accounting. The accounting process considers costs and benefits and must comply with legal and regulatory requirements.
The document discusses key concepts in accounting and bookkeeping. It defines accounting as the recording, classifying, and summarizing of financial transactions and events to assess the results of operations and financial position of a business. Bookkeeping is described as merely recording transactions in books and ledgers, while accountancy provides compiled accounts to understand the state of business affairs. Key accounting concepts discussed include cost, money measurement, business entity, realization, and double entry principles.
The document is a chapter from an accounting textbook that discusses analyzing transactions and the basics of double-entry accounting. It introduces accounts, the rules of debit and credit, and how transactions are recorded in journals and T-accounts to update the balances of asset, liability, equity, revenue and expense accounts. It provides examples of common transactions recorded, such as cash deposits and withdrawals, purchases, expenses and revenue. The overall purpose is to teach students the fundamental principles and mechanics of double-entry accounting.
Accounting and finance ppt @ bec doms bagalkot mba financeBabasab Patil
The document provides an overview of various accounting and finance topics for bankers, including:
1) Bank reconciliation statements, trial balances, capital vs revenue expenditure, inventory valuation, and bills of exchange.
2) It describes the three types of accounts in accounting - real, personal, and nominal accounts - and the basic rules for debiting and crediting each type.
3) Details are given on specific topics like bank reconciliation statements, trial balances, and distinguishing between capital and revenue expenditures. Methods for inventory valuation are also outlined.
Crtitical issues in Company Law for Private CompaniesCA. Pramod Jain
For Presentation on Critical issues in COMPANY LAW FOR PRIVATE COMPANIES made at Kanpur CA Society click at - http://lunawat.com/Uploaded_Files/Presentation/CrtiticalissuesinCompanyLawforPrivateCompanies-Nanital.pdf
Regards
Rizwan Ali Qumbrani will provide a training session on security deposits in Oracle Receivables. The current process has issues where the balance is incorrect. The training will cover an overview of deposits, the business need to use Oracle's standard process, how to perform activities like creating a deposit and applying it to invoices, accounting entries, and testing scenarios like applying one deposit to multiple invoices and refunding a deposit balance.
The document provides an overview of forensic accounting and mediation work, including experiences, common fraud cases, and lessons learned. It discusses internal control weaknesses that allow fraud to occur, the importance of following proper procedures, and getting professional help to investigate and recover assets when fraud is discovered. Key advice includes tightening controls to prevent opportunities and following experts' guidance every step of the way.
The document discusses how to work with and pass entries in the accounting software Tally. It provides examples of different types of entries including receipt, payment, contra, purchase, and sales entries. It also outlines the golden rules for passing entries, such as debiting expenses and assets, and crediting incomes and liabilities. Sample entries are shown to purchase furniture, deposit cash in the bank, record a sale, and receive payment from a customer to demonstrate how to properly record transactions in Tally.
This document defines basic accounting terms:
- Assets include anything owned by a business, classified as fixed, current, tangible, intangible, or wasting. Liabilities are amounts owed to outsiders. Capital is the owner's investment.
- Income is revenue minus expenses. Expenses are costs to produce and sell goods/services. Revenue is amounts received from sales.
- Other terms defined include debtors, creditors, goods, purchases, sales, profit, loss, and depreciation. Accounting equations show assets equal to capital plus liabilities. Transactions can affect two or more items on the balance sheet.
ACCT-1004 – Principles of Accounting I covers key accounting concepts such as financial statements, net worth, the accounting equation, and accrual accounting. It introduces key terms like assets, liabilities, revenues, and expenses. Students learn how transactions and financial statements impact a company's net worth over time. Key concepts include preparing a balance sheet and income statement, double-entry accounting, the matching principle, and distinguishing between capital and revenue. The goal is for students to gain a basic understanding of accounting principles.
The document discusses the double-entry accounting system and ledger accounts. The objectives are to understand what ledger accounts are, how to prepare them using a 'T' format, and how to post transactions from journals to ledger accounts. Key points covered include what an account is, the 'T' format for assets, liabilities, equity accounts, examples of double-entry transactions, and the 3-2-1 rule for summarizing what was learned.
Basic Financial Statements - Financial AccountingFaHaD .H. NooR
Financial accounting
These slides will help you in understanding financial statements
A financial statements (or financial report) is a formal record of the financial activities and position of a business, person, or other entity.
Relevant financial information is presented in a structured manner and in a form easy to understand. They typically include basic financial statements, accompanied by a management discussion and analysis.
A balance sheet, also referred to as a statement of financial position, reports on a company's assets, liabilities, and owners equity at a given point in time.
An income statement, also known as a statement of comprehensive income, statement of revenue & expense, P&L or profit and loss report, reports on a company's income, expenses, and profits over a period of time. A profit and loss statement provides information on the operation of the enterprise. These include sales and the various expenses incurred during the stated period.
A Statement of changes in equity, also known as equity statement or statement of retained earnings, reports on the changes in equity of the company during the stated period.
A cash flow statement reports on a company's cash flow activities, particularly its operating, investing and financing activities.
For large corporations, these statements may be complex and may include an extensive set of footnotes to the financial statements and management discussion and analysis. The notes typically describe each item on the balance sheet, income statement and cash flow statement in further detail. Notes to financial statements are considered an integral part of the financial statements.
1) On November 1, Chris Clark deposited $25,000 into a new bank account for NetSolutions, recording the transaction in the journal.
2) On November 5, NetSolutions purchased land for $20,000 in cash, decreasing the cash account and increasing the land asset account.
3) Throughout the month, NetSolutions incurred various expenses totaling $3,650 which were paid in cash, decreasing the cash account and increasing the various expense accounts.
This document discusses Accounting Standards 6 and 10 regarding fixed assets and depreciation. It defines fixed assets as non-current assets used over multiple accounting periods with a limited useful life. It outlines various methods for calculating depreciation expense, such as the straight-line and reducing balance methods. The document also discusses disclosure requirements regarding depreciation policies, accumulated depreciation amounts, and revaluations of fixed assets.
This document outlines the accounting cycle for a company, including journal entries, T-accounts, adjustments, trial balances, financial statements, and closing entries. Key events include issuing stock, purchasing equipment, paying and receiving various expenses and revenues, and closing entries to transfer account balances to income summary and retained earnings accounts.
The document discusses the evolution of the auditor role from a historical account checker to a modern business advisor. Initially, auditors were assumed to be trustworthy but lacked formal qualifications. Over time, business grew more complex with technology, globalization, and competition requiring auditors to have specialized expertise in areas like finance, industry knowledge, economics, and technology. Modern auditors help identify risks, opportunities, and create effective control environments for businesses. The role expanded from verification of historical accounts to providing strategic advice and ensuring financial discipline.
The accounting cycle involves collecting financial data, journalizing and posting transactions, preparing an adjusted trial balance, preparing financial statements and reports, and closing temporary accounts to retain earnings at the end of the accounting period in order to start the next period with updated balance sheet account balances.
This document provides an overview of AkzoNobel, a Dutch multinational company that operates in decorative paints, performance coatings, and specialty chemicals. It describes AkzoNobel's business units, key customers in various industries, list of suppliers, and product portfolio across its business segments. The product portfolio section details AkzoNobel's offerings in decorative paints, performance coatings including industrial finishes, powder coatings, car refinishes, marine and protective coatings, and packaging coatings. It also outlines AkzoNobel's specialty chemicals portfolio spanning functional chemicals, pulp and paper chemicals, industrial chemicals, and national starches.
This document provides a marketing plan for a South Korean gold and gemstone jewelry company expanding into India. It begins with an analysis of the gold jewelry markets in India and China. India is selected as the target market due to its large population, fast growing economy, cultural traditions involving gold, and more lenient policies for foreign companies compared to China. A PESTLE analysis of India highlights opportunities in the jewelry industry. A competitor analysis identifies major players and applies Porter's Five Forces. The plan then outlines product, place, price, and promotion strategies for entering the Indian market including variety, quality control, design, packaging, retail locations, competitive pricing, branding, and both online and offline advertising approaches.
This document summarizes a presentation on customer relationship management (CRM) at SIBM Bengaluru. It lists the group members who presented and identifies various touchpoints customers have with a bank, including advisors, statements, events, products, reports, websites, and more. It then discusses improving customer touchpoints by analyzing their value and impact from the customer perspective. The presentation emphasizes understanding customer needs and expectations, using technology to improve the customer experience, and conducting touchpoint analysis to catalyze positive change.
This document appears to be a project report submitted by a student named Advait Bhobe to Symbiosis Institute of Business Management in Bengaluru, India to fulfill requirements for an internship program. The report examines a survey conducted for a telecom company on broadband internet services and includes sections on the company and industry analysis, objectives of the study, research methodology, findings, and conclusions. The student conducted the survey and market research on broadband services under the guidance of a faculty member.
This document provides an overview of Jubilant FoodWorks Limited, the operator of Domino's Pizza and Dunkin' Donuts brands in India. It discusses the company's operations, including the number of stores and daily pizza sales. It then describes problems faced with the initial supply chain model and outlines the new supply chain initiative. Key aspects of the new strategy include outsourcing procurement, identifying specialty crop regions, establishing regional commissaries, implementing temperature-controlled transportation and logistics to stores, and establishing a goal of delivery within 30 minutes. The initiative has led to lower costs, improved efficiency, increased sales and quality assurance across the company's supply chain.
Intel has a global supply chain that manufactures computer processors. It faces challenges from shifting markets and new technologies. Intel IT has helped transform Intel's supply chain through programs like Just Say Yes from 2005-2010. This included improving demand forecasting, reducing order changes, and shortening order timelines. Intel IT consolidated data systems and implemented a standardized ERP system. These changes led to faster response times to customers, higher productivity, reduced inventory levels, and improved ability to launch new manufacturing processes.
Discriminant analysis is a statistical technique used to classify cases into categories based on a set of predictor variables. It can be used to determine which factors influence whether consumers make different choices. The document provides an example using discriminant analysis on survey data to predict whether consumers purchase chicken from a butcher's shop or not, based on variables like spending on chicken, age, beliefs about safety and trust in supermarkets. It also discusses extensions to multiple discriminant analysis when there are more than two categories to classify cases into.
This document provides details on several radio advertising campaigns run by different companies in both national and international markets. It discusses campaigns by BSNL in India to promote its telecom services, the Vodafone Live Hour radio show in the UK, Coca-Cola's promotion of the 2010 FIFA World Cup through radio, and Kaya Skin Clinic's radio ads in India. For each campaign, it describes the objectives, target audiences, executions, and results. The case studies demonstrate how radio advertising was used strategically by these brands to build awareness, promote events, and engage specific demographics.
Case study group 6 retailing in india-the impact of hypermarketsAdvait Bhobe
This document discusses the impact of hypermarkets in India on retailing. It notes several major hypermarket chains operating in India. While growth declined in 2012 due to high interest rates, the government proposed reforms to boost the economy, including liberalizing foreign investment in retail. To appeal to Indian consumers, hypermarkets need to differentiate themselves from local stores by making shopping an experience through various strategies. The government spending $500 billion to improve infrastructure will benefit international retailers by reducing costs and providing healthy competition. Key changes in the Indian consumer demographic include a young population with rising disposable incomes and nuclear working families having less time to shop. International retailers can learn more about India's youth by studying trends in migration, demographics, existing retail organizations,
Food retail in India includes various store formats like malls, department stores, hypermarkets, supermarkets, convenience stores, discount stores, and dollar stores. Rural retail is also growing with formats operated by companies like ITC, Godrej Agrovet, and Mahindra & Mahindra. Internet retailing is expanding rapidly in India at a projected CAGR of 48% and expected sales of INR 60 billion by 2015.
It industry tcs group 7_ssm assignmentAdvait Bhobe
The document discusses the Indian IT industry and Tata Consultancy Services (TCS). It provides an overview of the growth of the Indian IT industry, trends in the industry such as increasing internet usage and employment. It also discusses the various components of the IT industry in India. Finally, it gives details about TCS, the largest IT company in India, including its history, services provided, and size.
Current indian automobile insurance industryAdvait Bhobe
Motor insurance premiums in India have grown substantially over the past three years, increasing by 46% in policies and 55% in premium amounts. Auto insurance provides liability coverage for theft or accidents and own damage coverage, and is mandatory in India by law. While auto insurance was previously unprofitable due to low prices and high claims, prices have recently increased by 70-150% to help reduce losses. Motor insurance currently accounts for about 41% of non-life insurance premiums in India, representing over Rs. 14566 crores in premiums written and more than 4 crore policies.
FedEx was the leader in overnight air delivery services. UPS attacked this market by launching its own overnight air delivery service in the 1980s. In response, FedEx launched a counteroffensive strategy. It invested heavily in improving both its air and ground delivery services through strategic acquisitions. This helped FedEx gain back some lost market share and grow its package volumes and daily ground deliveries. The counterattack allowed FedEx to successfully defend its position as the market leader in the overnight delivery space.
Marico Limited is an Indian consumer goods company founded in 1857 and headquartered in Mumbai. It produces coconut and edible oils, hair oils, hair care products, fabric care products, and personal care products which it sells in India and internationally. The company aims to put consumers first, promote excellence and innovation, and generate wealth for shareholders and growth. Its brand portfolio includes Parachute, Saffola, Hair & Care, Shanti Amla, and others. Managing its brand portfolio effectively allows it to utilize resources optimally, prioritize growth areas, increase efficiency, provide clarity to customers, and create leverage across brands.
Gucci and Louis Vuitton are luxury brands known for their high quality craftsmanship and iconic designs. Gucci is associated with royalty and tradition through signatures like the Diamante pattern and Horsebit logo. Louis Vuitton emphasizes creativity through artist collaborations and balancing tradition with modernity. Both brands sell selective products through exclusive distribution.
Zara differentiates through high fashion velocity, understanding customer needs, and creating exclusivity through limited production. Zara focuses on prime locations and window advertising rather than traditional marketing. The brand delivers new collections twice monthly at affordable prices for young, fashion-conscious customers.
This document summarizes and provides feedback on advertisements from several major banks in India. It notes that some ads lack important details like terms and conditions or the name of the bank. However, it praises a Bank of Baroda ad for effectively promoting customized solutions for small and medium businesses and an Union Bank of India ad for its appealing co-branding initiative with Nokia.
The document discusses Kaizen costing practices at Boeing. [1] Kaizen costing focuses on continuous small cost reductions through incremental improvements to manufacturing processes. [2] At Boeing, cost reduction targets are set for divisions and work cells, who have freedom to achieve the targets through various means. [3] Key factors for successful Kaizen costing include holding work cells accountable to targets and having a consistent, repeatable process for cost reductions.
The document provides an overview of corporate governance standards in Japan. It discusses how Japan historically had a bank-centered system dominated by large conglomerates called zaibatsu. While reforms have been implemented, issues remain like a lack of independent directors and transparency. The Olympus scandal is presented as an example of these ongoing problems. Overall, the document analyzes both historical context and current issues, as well as proposals to strengthen rules regarding boards and improve standards going forward in Japan.
This document provides an overview of corporate governance practices at three major Japanese companies - Honda, Toyota, and Mitsubishi Corporation. It discusses how each company has different boards and committees to oversee management, ensure transparency, comply with laws, and protect shareholder interests. Key elements include boards of directors, boards of corporate auditors with outside members, disclosure committees, compliance officers, and other groups focused on risk management, business ethics, and more. The companies aim to increase long-term corporate value through robust governance.
The document discusses human resource management (HRM) and its role in creating shareholder value. It provides an overview of traditional and modern views of HRM, describing how HRM has shifted from a cost center to a strategic function. The document also discusses several HRM best practices that can increase shareholder value such as implementing a high-performance work system, developing core organizational capabilities, and managing intangible assets through practices like an intangibles audit. Overall, the document argues that properly implementing strategic HRM practices can enhance organizational performance and increase shareholder value.
1. 1 2 3 OF ACCOUNTING
By. Prof. Naveen.N
Chartered Accountant
2. NEED FOR INFORMATION
INFORMATION
NON QUANTITATIVE QUANTITATIVE
INFORMATION INFORMATION
ACCOUNTING NON ACCOUNTING
INFORMATION INFORMATION
OPERATING FINANCIAL MANAGEMENT
INFORMATION ACCOUNTING ACCOUNTING
3. DEFINITION OF ACCOUNTING
THE process of identifying, measuring and
communicating economic information to
permit informed judgments and decisions by
users of the information.
-American Accounting Association Committee
4. ACCOUNTING – HISTORICAL ANTECEDENTS
When humans began keeping accounting records in their head ?
Symbols recording transactions
3200BC – Sumerian civilisation in Mesopotamia kept records in clay
tablets.
1400BC – In Greece slaves used as scribes and auditors, it was assumed
that statements from slaves who could be tortured would be more reliable
that those from freemen
990BC – Scribes in Babylonia and Egypt received formal accounting
training in school.
521-486BC – Persia under Darius had government scribes who performed
surprise audits of accounts of the province
4AD – In Byzantine empire, Constantine founded a public administration
school in which accounting was taught.
642-814AD - Roman empire under Charlemagne continued examples of
government accountants and auditors.
In the 15th century, branches of the Medici Bank were required to submit
annual balance sheets to the main office in Florence.
5. ACCOUNTING – A LANGUAGE
ACCOUNTING – LANGUAGE OF BUSINESS.
COMPLICATION SIMILAR TO TASK OF LEARNING NEW LANGUAGE.
WORDS USED IN A DIFFERENT SENSE IN ACCOUNTING THAN IN
THEIR COLLOQUIAL MEANING (EG: NET WORTH).
SOME ACCOUTING RULES ARE DEFINITE OTHERS ARE NOT.
ACCOUNTING NOT STATIC – RULES SUBJECT TO CHANGE
6. BASIC CONCEPTS
1. Money measurement.
Record is made only of information that can be expressed in monetary terms.
2. Entity.
Accounts kept for entities, as distinguished from the persons who are
associated with these entities.
3. Going concern.
Entity will continue to operate for an indefinitely long period in the future.
4. Cost concept.
The economic resources of an entity is ordinarily entered in the accounting
records at the price paid to acquire it.
5. Dual aspect.
Since all of the assets of a business are claimed by someone and since the
total of these claims cannot exceed the amount of assets to be claimed it
follows that ASSETS = LIABILITIES & EQUITIES
7. BASIC CONCEPTS
6. Accounting period.
Accounting measures activities for a specified interval of time called
accounting period. (Pacioli, first author of an accounting text, wrote in 1494:
“ Books should be closed each year, especially in a partnership, because frequent
accounting makes for long partnership.”)
7. Conservatism.
Recognition of revenues requires better evidence than does recognition of
expenses.
8. Consistency.
All the policies adopted for preparing financial statements should be consistently
Followed by the entity.
9. Materiality.
Insignificant events may be disregarded, but there must be full disclosure of all
important information.
8. ACCOUNTING PROCESS
ACCOUNTING PROCESS
IDENTIFICATION OF THE ECONOMIC EVENTS
CLASSIFYING THE BUSINESS TRANSACTIONS
MEASUREMENT IN RUPEES
RECORDING THE BUSINESS TRANSACTIONS
ANALYSING AND INTERPRETING THE BUSINESS TRANSACTIONS
9. ACCOUNTING CYCLE
TRANSACTIONS
PREPARATION OF JOURNAL AND SUBSIDIARY BOOKS
LEDGER POSTINGS
EXTRACTING TRIAL BALANCE
PREPARING FINANCIAL STATEMENTS, TRADING AND PROFIT AND
LOSS ACCOUNTS AND BALANCE SHEET
11. FORMAL ACCOUNTING - DOUBLE ENTRY SYSTEM OF BOOK KEEPING
METHOD OF RECORDING TWO-FOLD EFFECTS OF EVERY
TRANSACTION.
BOTH DEBIT AND CREDIT ASPECT OF A TRANSACTION
IS
RECORDED.
FORMAL ACCOUNTING USES A SET OF BOOKS AND
LEDGERS TO RECORD TRANSACTIONS.
LEDGER ( T-ACCOUNTS) ARE PREPARED FROM WHICH
TRIAL BALANCES AND FINANCIAL STATEMENTS ARE
DRAWN.
12. RULES OF DEBIT AND CREDIT
T - ACCOUNT
DEBIT SIDE CREDIT SIDE
ASSET
INCREASE OR ADDITIONS DECREASE OR DEDUCTION
ON THE DEBIT SIDE ON THE CREDIT SIDE
" + " ON LEFT HAND SIDE “ - " ON RIGHT HAND SIDE
13. RULES OF DEBIT AND CREDIT
T - ACCOUNT
DEBIT SIDE CREDIT SIDE
LIABILITY (EXTERNAL) & CAPITAL(INTERNAL)
DECREASE OR DEDUCTION INCREASE OR ADDITIONS
ON THE DEBIT SIDE ON THE CREDIT SIDE
“ - " ON LEFT HAND SIDE " + " ON RIGHT HAND SIDE
14. RULES OF DEBIT AND CREDIT
T - ACCOUNT
DEBIT SIDE CREDIT SIDE
EXPENSES / LOSSES
INCREASE OR ADDITIONS DECREASE OR DEDUCTION
ON THE DEBIT SIDE ON THE CREDIT SIDE
" + " ON LEFT HAND SIDE “ - " ON RIGHT HAND SIDE
15. RULES OF DEBIT AND CREDIT
T - ACCOUNT
DEBIT SIDE CREDIT SIDE
REVENUES / GAINS
DECREASE OR DEDUCTION INCREASE OR ADDITIONS
ON THE DEBIT SIDE ON THE CREDIT SIDE
“ - " ON LEFT HAND SIDE " + " ON RIGHT HAND SIDE
17. GREEN COMPANY – Transaction 1
RAMASWAMY STARTED BUSINESS WITH CASH RS 1,00,000
Dr CASH (ASSET)
Cr
Capital Rs 1,00,000
Dr RAMASWAMY CAPITAL (EQUITY AND LIABILITY)
Cr
Cash Rs
1,00,000
18. GREEN COMPANY – Transaction 2
GREEN COMPANY RAISED BANK LOAN OF RS 50,000
Dr CASH (ASSET)
Cr
Capital 1,00,000
Bank loan
50,000
Dr BANK LOAN (EQUITY AND LIABILITY)
Cr
Cash
50,000
19. GREEN COMPANY – Transaction 3
GREEN COMPANY BOUGHT A BUILDING FOR RS 25,000 AND PAID IN CASH.
Dr CASH (ASSET)
Cr
Capital 1,00,000 Building
Bank loan 25,000
50,000
Dr BUILDING (ASSET)
Cr
Cash
25,000
20. GREEN COMPANY – Transaction 4
GREEN COMPANY BOUGHT STOCK OF SUGAR FOR RS 10,000
Dr CASH (ASSET)
Cr
Capital 1,00,000 Building
Bank loan 25,000
50,000 Stock
10,000
Dr STOCK (ASSET)
Cr
Cash
10,000
21. GREEN COMPANY – Transaction 5
GREEN COMPANY SOLD THE ENTIRE STOCK OF SUGAR FOR RS 12,000
Dr CASH (ASSET)
Cr
Capital 1,00,000 Building
Bank loan 25,000
50,000 Stock
Sales 10,000
Dr STOCK (ASSET)
12,000
Cr
Cash Cost of goods sold 10,000
10,000
Dr COST OF GOODS SOLD (EXPENSE)
Cr
Stock
10,000
Dr SALES (INCOME)
Cr
Cash
12,000
22. GREEN COMPANY
RECOLLECT HOW MANY T – ACCOUNTS HAVE WE PREPARED
1. CASH ACCOUNT (Asset)
2. RAMASWAMY CAPITAL ACCOUNT (Liability)
3. BANK LOAN ACCOUNT (Liability)
4. BUILDING ACCOUNT (Asset)
5. STOCK ACCOUNT (Asset)
6. COST OF GOODS SOLD ACCOUNT (Expense)
7. SALES ACCOUNT (Income)
24. YELLOW COMPANY – Transaction 1
RAMASWAMY STARTED BUSINESS WITH CASH RS 50,000 AND AVAILED
LOAN OF RS 75,000
Dr CASH (ASSET)
Cr
Capital Rs 50,000
Loan Rs 75,000
Dr RAMASWAMY CAPITAL (EQUITY AND LIABILITY)
Cr
Cash Rs
50,000
Dr MRS RAMASWAMY LOAN(EQUITY AND LIABILITY)
Cr
Cash Rs
75,000
25. YELLOW COMPANY – Transaction 2
YELLOW COMPANY BOUGHT A BUILDING FOR RS 10,000 AND PAID IN
CASH.
Dr CASH (ASSET)
Cr
Capital 50,000 Furniture 10,000
Loan 75,000
Dr FURNITURE(ASSET)
Cr
Cash
10,000
26. YELLOW COMPANY – Transaction 3
YELLOW COMPANY BOUGHT RS 50,000 WORTH OF CEMENT ON CREDIT.
Dr STOCK(ASSET)
Cr
Creditors 50,000
Dr CREDITORS (LIABILITY)
Cr
Stock 50,000
27. YELLOW COMPANY – Transaction 4
YELLOW COMPANY SOLD ENTIRE STOCK OF CEMENT FOR RS 60,000 ON CREDIT.
Dr STOCK(ASSET)
Cr
Creditors 50,000 Cost of goods sold 50,000
Dr DEBTORS (ASSET)
Cr
Sales
60,000
Dr COST OF GOODS SOLD (EXPENSE)
Cr
Stock
50,000
Dr SALES (INCOME)
Cr
Debtors 60,000
28. YELLOW COMPANY – Transaction 5
YELLOW COMPANY RECEIVED FROM CEMENT PURCHASER RS 60,000
Dr CASH (ASSET)
Cr
Capital 50,000 Furniture 10,000
Loan 75,000
Debtor
60,000
Dr DEBTORS (ASSET)
Cr
Sales Cash
60,000 60,000
29. YELLOW COMPANY – Transaction 6
YELLOW COMPANY PAID RS 50,000 TO SUPPLIER
Dr CASH (ASSET)
Cr
Capital 50,000 Furniture 10,000
Loan 75,000 Creditor
Debtor 60,000 50,000
Dr CREDITORS (LIABILITY)
Cr
Cash Stock 50,000
50,000
30. YELLOW COMPANY – Transaction 7
YELLOW COMPANY REPAID LOAN RS 25,000
Dr CASH (ASSET)
Cr
Capital 50,000 Furniture 10,000
Loan 75,000 Creditor
Debtor 60,000 50,000
Loan
25,000
Dr MRS RAMASWAMY LOAN(EQUITY AND LIABILITY)
Cr
Cash Cash Rs
25,000 75,000
31. GREEN COMPANY
RECOLLECT HOW MANY T – ACCOUNTS HAVE WE PREPARED
1. CASH ACCOUNT (Asset)
2. RAMASWAMY CAPITAL ACCOUNT (Liability)
3. MRS RAMASWAMY LOAN ACCOUNT (Liability)
4. FURNITURE ACCOUNT(Asset)
5. STOCK ACCOUNT (Asset)
6. CREDITOR ACCOUNT (Liability)
7. DEBTOR ACCOUNT (Asset)
8. COST OF GOODS SOLD ACCOUNT (Expense)
9. SALES ACCOUNT (Income)
33. IN THE BOOKS OF WOODCRAFT COMPANY
1. Sept 1, Began business by investing cash Rs 10,000 in company’s share capital.
DR 1. CASH A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
1.9.XX To Capital 10,000
DR 2. CAPITAL A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
1.9.XX By Cash 10,000
34. IN THE BOOKS OF WOODCRAFT COMPANY
2. Sept 4, Paid two months rent in advance for a shop Rs 2,000.
DR 1. CASH A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
1.9.XX To Capital 10,000 4.9.XX By Rent advance 2,000
DR 3. RENT IN ADVANCE A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
4.9.XX To Cash 2,000
Capital account (2) opened earlier continues.
35. IN THE BOOKS OF WOODCRAFT COMPANY
3. Sept 5, Bought equipment for cash Rs 1,200.
DR 1. CASH A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
1.9.XX To Capital 10,000 4.9.XX By Rent advance 2,000
5.9.XX By Equipment 1,200
DR 4. EQUIPMENT A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
5.9.XX To Cash 1,200
Capital account (2), Rent in advance account (3) opened earlier continues.
36. IN THE BOOKS OF WOODCRAFT COMPANY
4. Sept 7, Bought supplies on credit, Rs 700
DR 5. SUPPLIES A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
7.9.XX To Creditors 700
DR 6. CREDITORS A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
7.9.XX By Supplies 700
Capital account (2) , Rent in advance account (3), Cash account (1), Equipment account (4)
opened earlier continues.
37. IN THE BOOKS OF WOODCRAFT COMPANY
5. Sept 10, Received payment for remodeling a kitchen Rs 8,600
DR 1. CASH A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
1.9.XX To Capital 10,000 4.9.XX By Rent advance 2,000
10.9.XX To Revenue 8,600 5.9.XX By Equipment 1,200
DR 7. REVENUE FROM SERVICE A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
10.9.XX By Cash 8,600
Capital account (2) , Rent in advance account (3), Equipment account (4), Supplies account
(5), Creditors account (6) opened earlier continues.
38. IN THE BOOKS OF WOODCRAFT COMPANY
6. Sept 14, Paid for advertisement that appeared in local newspaper Rs 1,400.
DR 1. CASH A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
1.9.XX To Capital 10,000 4.9.XX By Rent advance 2,000
10.9.XX To Revenue 8,600 5.9.XX By Equipment 1,200
14.9.XX By Advertisement 1,400
DR 8. ADVERTISEMENT A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
14.9.XX To Cash 1,400
Capital account (2) , Rent in advance account (3), Equipment account (4), Supplies account
(5), Creditors account (6), Revenue account (7) opened earlier continues.
39. IN THE BOOKS OF WOODCRAFT COMPANY
7. Sept 17, Received payment for furnishing office room Rs 11,200
DR 1. CASH A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
1.9.XX To Capital 10,000 4.9.XX By Rent advance 2,000
10.9.XX To Revenue 8,600 5.9.XX By Equipment 1,200
17.9.XX To Revenue 11,200 14.9.XX By Advertisement 1,400
DR 7. REVENUE FROM SERVICE A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
10.9.XX By Cash 8,600
17.9.XX By Cash 11,200
Capital account (2) , Rent in advance account (3), Equipment account (4), Supplies account
(5), Creditors account (6), Advertisement account (8) opened earlier continues.
40. IN THE BOOKS OF WOODCRAFT COMPANY
8. Sept 23, Billed customers for work done other than on cash terms Rs 13,100
DR 7. REVENUE FROM SERVICE A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
10.9.XX By Cash 8,600
17.9.XX By Cash 11,200
23.9.XX By Debtors 13,100
DR 9. DEBTORS A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
23.9.XX To Revenue 13,100
Capital account (2) , Rent in advance account (3), Equipment account (4), Supplies account
(5), Creditors account (6), Advertisement account (8) , Cash account (1) opened earlier
continues.
41. IN THE BOOKS OF WOODCRAFT COMPANY
9. Sept 25, Paid wages to assistant Rs 1,500
DR 1. CASH A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
1.9.XX To Capital 10,000 4.9.XX By Rent advance 2,000
10.9.XX To Revenue 8,600 5.9.XX By Equipment 1,200
17.9.XX To Revenue 11,200 14.9.XX By Advertisement 1,400
25.9.XX By Wages 1,500
DR 10. WAGES A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
25.9.XX To Cash 1,500
Capital account (2) , Rent in advance account (3), Equipment account (4), Supplies account
(5), Creditors account (6), Revenue account (7), Advertisement account (8) , Debtors account
(9) opened earlier continues.
42. IN THE BOOKS OF WOODCRAFT COMPANY
10. Sept 28, Paid electricity charges Rs 240
DR 1. CASH A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
1.9.XX To Capital 10,000 4.9.XX By Rent advance 2,000
10.9.XX To Revenue 8,600 5.9.XX By Equipment 1,200
17.9.XX To Revenue 11,200 14.9.XX By Advertisement 1,400
25.9.XX By Wages 1,500
28.9.XX By Electricity 240
DR 11. ELECTRICITY CHARGES A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
28.9.XX To Cash 240
Capital account (2) , Rent in advance account (3), Equipment account (4), Supplies account
(5), Creditors account (6), Revenue account (7), Advertisement account (8) , Debtors account
(9), Wages account (10) opened earlier continues.
43. IN THE BOOKS OF WOODCRAFT COMPANY
11. Sept 29, Received from customers billed amount of Rs 4,800
DR 1. CASH A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
1.9.XX To Capital 10,000 4.9.XX By Rent advance 2,000
10.9.XX To Revenue 8,600 5.9.XX By Equipment 1,200
17.9.XX To Revenue 11,200 14.9.XX By Advertisement 1,400
29.9.XX To Debtors 4,800 25.9.XX By Wages 1,500
28.9.XX By Electricity 240
DR 9. DEBTORS A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
23.9.XX To Revenue 13,100 29.9.XX By Cash 4,800
Capital account (2) , Rent in advance account (3), Equipment account (4), Supplies account
(5), Creditors account (6), Revenue account (7), Advertisement account (8) , Wages account
(10), Electricity account (11) opened earlier continues.
44. IN THE BOOKS OF WOODCRAFT COMPANY
12. Sept 30, Paid a dividend Rs 2,500
DR 1. CASH A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
1.9.XX To Capital 10,000 4.9.XX By Rent advance 2,000
10.9.XX To Revenue 8,600 5.9.XX By Equipment 1,200
17.9.XX To Revenue 11,200 14.9.XX By Advertisement 1,400
29.9.XX To Debtors 4,800 25.9.XX By Wages 1,500
28.9.XX By Electricity 240
30.9.XX By Dividend 2,500
DR 12. DIVIDEND A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
30.9.XX To Cash 2,500
Capital account (2) , Rent in advance account (3), Equipment account (4), Supplies account
(5), Creditors account (6), Revenue account (7), Advertisement account (8) , Wages account
(10), Electricity account (11), Debtors account (9) opened earlier continues.
45. IN THE BOOKS OF WOODCRAFT COMPANY
Ascertaining the closing balance
DR 1. CASH A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
1.9.XX To Capital 10,000 4.9.XX By Rent advance 2,000
10.9.XX To Revenue 8,600 5.9.XX By Equipment 1,200
17.9.XX To Revenue 11,200 14.9.XX By Advertisement 1,400
29.9.XX To Debtors 4,800 25.9.XX By Wages 1,500
28.9.XX By Electricity 240
30.9.XX By Dividend 2,500
30.9.XX By Balance 25,760
34,600 34,600
DR 2. CAPITAL A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
30.9.XX To balance 10,000 1.9.XX By Cash 10,000
10,000 10,000
46. IN THE BOOKS OF WOODCRAFT COMPANY
Ascertaining the closing balance
DR 3. RENT IN ADVANCE A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
4.9.XX To Cash 2,000 30.9.XX By Balance 2,000
2,000 2,000
DR 4. EQUIPMENT A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
5.9.XX To Cash 1,200 30.9.XX By Balance 1,200
1,200 1,200
DR 5. SUPPLIES A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
7.9.XX To Creditors 700 30.9.XX By Balance 700
700 700
DR 6. CREDITORS A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
30.9.XX To balance 700 7.9.XX By Supplies 700
700 700
47. IN THE BOOKS OF WOODCRAFT COMPANY
Ascertaining the closing balance
DR 7. REVENUE FROM SERVICE A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
30.9.XX To balance 32,900 10.9.XX By Cash 8,600
17.9.XX By Cash 11,200
23.9.XX By Debtors 13,100
32,900 32,900
DR 8. ADVERTISEMENT A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
14.9.XX To Cash 1,400 30.9.XX By Balance 1,400
1,400 1,400
DR 9. DEBTORS A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
23.9.XX To Revenue 13,100 29.9.XX By Cash 4,800
30.9.XX By Balance 8,300
13,100 13,100
48. IN THE BOOKS OF WOODCRAFT COMPANY
Ascertaining the closing balance
DR 10. WAGES A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
25.9.XX To Cash 1,500 30.9.XX By Balance 1,500
1,500 1,500
DR 11. ELECTRICITY CHARGES A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
28.9.XX To Cash 240 30.9.XX By Balance 240
240 240
DR 12. DIVIDEND A/C CR
DATE PARTICULARS J.F AMOUNT(RS) DATE PARTICULARS J.F AMOUNT (RS)
30.9.XX To Cash 2,500 30.9.XX By Balance 2,500
2,500 2,500
51. VENU’S MUSIC CORNER - PROFIT AND LOSS ACCOUNT
PARTICULARS RS RS
Revenues from services 12,660
Expenses
Salaries 5,600
Electricity 410
Advertisement 130
Rent 300 6,440
Profit for the year 6,220
52. VENU’S MUSIC CORNER – BALANCE SHEET
PARTICULARS
ASSETS
CASH 570
DEBTORS 1,210
SUPPLIES 2,190
EQUIPMENT 25,500 29,470
LIABILITIES
CREDITORS 2,510
UNEARNED INCOME 600
EQUITY
VENUGOPAL CAPITAL
Opening balance 21,140
Add: Additions during the year 3,000
Add: Profit 6,220
30,360
Less: Drawings 4,000 26,360 29,470
60. JOURNAL
WORD JOURNAL HAS BEEN DERIVED FROM THE FRENCH WORD
‘JOUR’ WHICH MEANS A DAY. THEREFORE JOURNAL MEANS DAILY
RECORD.
JOURNAL IS A BOOK IN WHICH DAY TO DAY TRANSACTIONS ARE
RECORDED.
IN JOURNAL EACH TRANSACTION IS CLASSIFIED INTO DEBIT AND
CREDIT ASPECT AND BOTH THE ASPECT ARE RECORDED
TOGETHER WITH EXPLANATION FOR EACH ENTRY.
THE PROCESS OR ACT OF RECORDING A TRANSACTION IN THE
JOURNAL IS CALLED JOURNALISING. THE RECORD OF A
TRANSACTION IN THE JOURNAL IS CALLED JOURNAL ENTRY.
62. FINANCIAL STATEMENTS
STAGES IN ACCOUNTING
1)Journal
2)Ledger
3)Trial Balance to verify the accuracy of ledger
account balance
4)Preparation of financial statements
63. TYPES OF BUSINESS ESTABLISHMENTS
TYPES
1)TRADING CONCERNS
2)MANUFACTURING CONCERNS
Trading concerns purchase finished goods from market and sell it at a profit. Such
firm prepare
1)Trading account
2)Profit and loss account
3)Balance sheet
Manufacturing concerns are those which purchase raw material and effect certain
productive activities on it and convert the same into marketable goods and then
sell it. Such concern while preparing final accounts prepare
1)Manufacturing account
2)Trading account
3)Profit and loss account
4)Balance sheet
64. TRADING & MANUFACTURING ACCOUNT
Particulars Amount Particulars Amount
To Opening stock By Sales Less Returns
To Purchases Less Returns By Closing stock
To Direct expenses By Gross Loss c/d to profit and
loss account
To Gross profit c/d to profit
and loss account
TOTAL XXX TOTAL XXX
65. PROFIT AND LOSS ACCOUNT FORMAT
Particulars Amount Particulars Amount
To Gross loss c/d from By Gross profit c/d from trading
Trading account account
To Indirect expenses By Interest income
To Interest expenses By Miscellaneous income
To Depreciation By Net loss transferred to capital
account
To Net profit transferred to
capital account
TOTAL XXX TOTAL XXX
66. BALANCE SHEET
LIABILITIES Amount ASSET Amount
CAPITAL FIXED ASSETS
LIABILITIES CURRENT ASSETS
TOTAL XXX TOTAL XXX
67. DIFFERNCE – TRADING AND P&L ACCOUNT
TRADING ACCOUNT PROFIT AND LOSS ACCOUNT
FIRST STAGE OF FINAL ACCOUNT SECOND STAGE OF FINAL ACCOUNT
IT RECORDS SALES AND DIRECT THIS ACCOUNT RECORDS GROSS
COSTS PROFIT, INCOMES, INDIRECT COSTS
AND LOSSES
IT DISCLOSES GROSS PROFIT OR IT DISCLOSES NET PROFIT OR NET
GROSS LOSS LOSS
68. DIFFERNCE BETWEEN GP AND NP
GROSS PROFIT NET PROFIT
It is the difference between sales and direct It is the difference between gross profit and
costs indirect expenses
Gross profit is transferred to profit and loss Net profit is transferred to capital account
account
Drawing of a owner does not depend on the Drawings of the owner depends on the net
gross profit profit
69. ENGLISH SYSTEM OF ACCOUNTING
CLASSIFICATION OF ACCOUNTS
1) PERSONAL ACCOUNTS
2) REAL ACCOUNTS
3) NOMINAL ACCOUNTS
70. PERSONAL ACCOUNTS
ACCOUNTS OF PHYSICAL PERSONS
EG., NAVEEN’S ACCOUNT
ACCOUNTS OF LEGAL PERSONS
EG., CANARA BANK’S ACCOUNT
REPRESENTATIVE PERSONAL ACCOUNTS
EG., OUTSTANDING EXPENSES
71. REAL & NOMINAL ACCOUNTS
REAL ACCOUNTS REPRESENT THE PROPERTY OF THE
BUSINESS.
NOMINAL ACCOUNTS REPRESENT LOSSES OR EXPENSES
OR INCOMES OR GAINS OF A BUSINESS.
72. MATCH THE FOLLOWING
A B
A RAMESH 1 REAL
B DENA BANK 2 PERSONAL
C RENT 3 NOMINAL
D COMPUTER 4 REAL
E LAND 5 NOMINAL
F DISCOUNT 6 PERSONAL
73. CONCEPT OF DEBIT AND CREDIT
PERSONAL DEBIT THE RECEIVER
ACCOUNTS CREDIT THE GIVER
REAL ACCOUNTS DEBIT WHAT COMES IN
CREDIT WHAT GOES OUT
NOMINAL DEBIT ALL EXPENSES AND LOSSES
ACCOUNTS CREDIT ALL INCOMES AND GAINS