Basics of Accounting. Principles and concepts of Accounting
what is Double Entry System of Accounting?what Financial Statements?
Accounting is a process of identifying, recording, summarising and reporting economic information
to decision makers in the form of financial statements.
meaning of accounting
meaning of book-keeping
difference between accounting and book-keeping
meaning of double entry system of book-keeping
accounting equation
accounting principles, concepts and conventions
parties interested in accounting information
accounting cycle
classification/types of accounts
golden rules of accounting
meaning of accounting
meaning of book-keeping
difference between accounting and book-keeping
meaning of double entry system of book-keeping
accounting equation
accounting principles, concepts and conventions
parties interested in accounting information
accounting cycle
classification/types of accounts
golden rules of accounting
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.
Trial balance and rectification of errorsItisha Sharma
Trial balance and rectification of errors, Introduction- Specimen of a Trial Balance- Errors and their rectification – Rectification of errors Rectification of errors detected after the preparation of Trial Balance but before the preparation of Final Accounts- Effect of errors on Profit – Rectification of errors appearing after the preparation of Final Accounts
Financial accounting Meaning . This is useful for, BCOM,MCOM,CA,CS,CMA STUDENTSBibek Prajapati
Financial accounting is a specialized branch of accounting that keeps track of a company's financial transactions. Using standardized guidelines, the transactions are recorded, summarized, and presented in a financial report or financial statement such as an income statement or a balance sheet.
This is useful for, BCOM,MCOM,CA,CS,CMA STUDENTS
Fundamentals of accounting showcased the basic approach to understanding and managing accounting systems in a simplified manner. Personnel in accounting and financial reporting roles would find the presentation a practice and refresher material for successful bookkeeping and financial reports.
This presentation talks about Meaning, of accounting, distinction between book keeping and accounting, Branches of accounting, Objectives of accounting, Uses and users of accounting information, Advantages of Accounting, Is accounting a science or an art, double entry system of financial accounting, limitations of financial accounting, important terms, journal entry, accounting concepts and conventions
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.
Trial balance and rectification of errorsItisha Sharma
Trial balance and rectification of errors, Introduction- Specimen of a Trial Balance- Errors and their rectification – Rectification of errors Rectification of errors detected after the preparation of Trial Balance but before the preparation of Final Accounts- Effect of errors on Profit – Rectification of errors appearing after the preparation of Final Accounts
Financial accounting Meaning . This is useful for, BCOM,MCOM,CA,CS,CMA STUDENTSBibek Prajapati
Financial accounting is a specialized branch of accounting that keeps track of a company's financial transactions. Using standardized guidelines, the transactions are recorded, summarized, and presented in a financial report or financial statement such as an income statement or a balance sheet.
This is useful for, BCOM,MCOM,CA,CS,CMA STUDENTS
Fundamentals of accounting showcased the basic approach to understanding and managing accounting systems in a simplified manner. Personnel in accounting and financial reporting roles would find the presentation a practice and refresher material for successful bookkeeping and financial reports.
This presentation talks about Meaning, of accounting, distinction between book keeping and accounting, Branches of accounting, Objectives of accounting, Uses and users of accounting information, Advantages of Accounting, Is accounting a science or an art, double entry system of financial accounting, limitations of financial accounting, important terms, journal entry, accounting concepts and conventions
Introduction to Accounting
Theory base of Accounting
Recording of Transactions – I
Recording of Transactions – II
Bank Reconciliation Statement
Trial Balance and Rectification of errors
Depreciation, Provisions and Reserves
Bill of Exchange
Financial Statements -I
Financial Statements -II
Accounts from Incomplete Records
Application of Computers in Accounting
Computerised Accounting System
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1) Configure Tally.ERP 9 to create POS Invoice
2) Create POS invoice with / without voucher class
3) Generate POS Invoice for single and multi-mode payment
4) Enter zero valued entries in POS invoice
5) Record batch-wise details in a POS Invoice
6) Print the POS Invoice
7) Generate and print POS Register
POS system is a computerised cash register which adds up the sales totals, calculates the
balance to be returned to buyer and automatically adjusts the inventory levels to reflect the
quantity sold. The equipment required for POS to work effectively are cash registers, card
readers, bar-code scanners and so on.
1) TallyVault a Company
2) Activate Security Control for a Company
3) Create Security Levels and Assign Passwords
4) Activate TallyAudit and View the TallyAudit list of Vouchers/Ledgers
5) Backup and Restore Tally.ERP 9 Data
6) Split Company Data
7) Export and Import Data and Vouchers
8) Export Reports using ODBC
9) Use Web-Enabled, Print Preview and Online Help Features
10) Print Reports and Cheques
11) Tally.NET Features
12) Control Centre Capabilities
13) Advantages of Support Centre
Configure Tally.NET Features
1) Connect Company on Tally.NET
2) Create and Authorise Remote Users
3) Access Company data Remotely
Tally.NET is an enabling framework which establishes a connection through which the remote
user can access the Client's data without copying / transferring the data. In other words, the
remote user can access the company data, provided the Company is open and connected on
Tally.NET.
Concept of Control Centre
Tally.ERP 9 provides a powerful feature named Control Centre to its users, which works as an
interface between the user and Tally.ERP 9 installed at different sites, it enables the user to
centrally configure and administer Site/User belonging to an account.
1) Manage Licenses
2) Central Configuration
3) Manage Users
4) Manage Company Profile
5) Manage Accounts (using My Tally.NET Accounts)
6) Change Passwords
7) Activity History
8) Jobs and Recruitments (Coming Soon)
9) Shop
1)Record orders placed/received
2) Make a reorder analysis of inventory
3) Create and maintain batch wise details, bill of materials and price lists
4) Display reports on various stock valuation methods and inventory ageing
analysis
5) Record zero valued entries
6) Record transactions using different actual and billed quantities
Access Support Centre
Use Support Centre
Tally.ERP 9 provides a new capability to its users known as Support Centre, wherein a user can
directly post his support queries on the functional and technical aspects of the Product. Using
Support Centre feature, the user can view all the support queries reported via Support Centre and
also through other modes viz., Email, Chat, Calls, etc.
Payroll is the process of maintaining records of all employees’ salaries.
1) The Payroll function in Tally.ERP 9 facilitates accurate and timely
employee payments.
2) The Attendance/Production Type is used to record attendance and production
data.
3) Salary components constituting Pay Structures are called Pay Heads.
4) Gratuity is a monetary benefit paid by an employer to an employee, at
the end of the employment, for the services rendered over the period of
employment.
5) Attendance voucher is a voucher type used to record attendance, overtime,
leave or production details.
6)Payroll voucher is used to record employees’ payroll related transactions.
7)Payslip is a document, issued to an employee, that itemises each component
of his/her earnings and deductions.
8)Pay Sheet is a matrix report with details of pay heads pertaining to
employees.
9) Payroll Statement helps to generate reports for specific pay heads.
10) Attendance Sheet displays information relating to employees’ attendance
or production data.
11) Gratuity Summary Report calculates the liability of a company in terms
of gratuity.
The Multilingual capabilities of Tally.ERP 9
How to change the Interface for different languages
Generating reports and invoices in different languages
Shortcut Keys in Tally ERP 9
Tally ERP 9 provides a selection of keyboard Tally Shortcuts to access menu functionalities to increase data entry speed. You are able to either click the button in the button bar or press the appropriate function key or character underlined/double-underlined. Some links have a double-underlined means you must press CTRL + the character key. For example, in the voucher entry screen, to change the voucher type Credit Note, press CTRL + F8. (note double line under F8 Key)
Salient Features of Tally.ERP 9
Key Components of Tally.ERP 9
How to start and exit Tally.ERP 9
Setting up a company in Tally.ERP 9
Working with companies in Tally.ERP 9
Financial Statements and Reports
Account Books and Registers
Inventory Registers and Reports
Job Costing Registers and Reports
Payroll Registers and Reports
POS Registers and Reports
The basic functions of Tally.ERP 9
F11: Features & F12: Configurations
Creating and Maintaining Chart of Accounts
Entering the opening balances for Ledgers
The basic functions of the Tally.ERP 9 Inventory System
Creating and maintaining Inventory Masters
Creating and maintaining stock details
Creating stock items and entering opening balances.
Maintain Bill-wise Details
Create and maintain cost Centers
Create and maintain Multiple Currencies
Configure and compute Interest Calculations
Create and maintain Budgets and Scenarios
Generate and print various reports
Advanced voucher entry tutorial in Tally ERP 9Accounts Arabia
Describe the purpose of the Tally.ERP 9 Accounting Vouchers Create and alter Accounting Vouchers
Use vouchers to enter Accounting transactions
Describe the use of Non-Accounting Vouchers
Describe the purpose of the Tally.ERP 9 Inventory vouchers
Create and alter Inventory Vouchers
Using vouchers to enter Inventory transactions
In accounting terms, a voucher is a document containing the details of a financial transaction. For
example, a purchase invoice, a sales receipt, a petty cash docket, a bank interest statement, and
so on. For every such transaction made, a voucher is used to enter the details into the ledgers to
update the financial position of the company. This feature of Tally.ERP 9 will be used most often.
The world’s first concurrent multi-lingual business Accounting & Inventory Management Software is now available in your local language ARABIC. Tally.ERP 9 is the No. 1 Business Management, Accounting and Inventory Management Software for the last 25 years and present in the Kingdom of Saudi Arabia for the last 15 years. Awards & Recognition
1. Winner of PC Quest Users' Choice Award 12 times in a row.
2. Winner of Windows Editor's Choice Award for The Best Accounting & Inventory Management Software for Small and Medium Business Enterprises in the Middle East.
3. Tally was one of the first few software products to be accredited by the Institute of Chartered Accountants of England & Wales.
RMD24 | Debunking the non-endemic revenue myth Marvin Vacquier Droop | First ...BBPMedia1
Marvin neemt je in deze presentatie mee in de voordelen van non-endemic advertising op retail media netwerken. Hij brengt ook de uitdagingen in beeld die de markt op dit moment heeft op het gebied van retail media voor niet-leveranciers.
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RMD24 | Retail media: hoe zet je dit in als je geen AH of Unilever bent? Heid...BBPMedia1
Grote partijen zijn al een tijdje onderweg met retail media. Ondertussen worden in dit domein ook de kansen zichtbaar voor andere spelers in de markt. Maar met die kansen ontstaan ook vragen: Zelf retail media worden of erop adverteren? In welke fase van de funnel past het en hoe integreer je het in een mediaplan? Wat is nu precies het verschil met marketplaces en Programmatic ads? In dit half uur beslechten we de dilemma's en krijg je antwoorden op wanneer het voor jou tijd is om de volgende stap te zetten.
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Business Valuation Principles for EntrepreneursBen Wann
This insightful presentation is designed to equip entrepreneurs with the essential knowledge and tools needed to accurately value their businesses. Understanding business valuation is crucial for making informed decisions, whether you're seeking investment, planning to sell, or simply want to gauge your company's worth.
As a business owner in Delaware, staying on top of your tax obligations is paramount, especially with the annual deadline for Delaware Franchise Tax looming on March 1. One such obligation is the annual Delaware Franchise Tax, which serves as a crucial requirement for maintaining your company’s legal standing within the state. While the prospect of handling tax matters may seem daunting, rest assured that the process can be straightforward with the right guidance. In this comprehensive guide, we’ll walk you through the steps of filing your Delaware Franchise Tax and provide insights to help you navigate the process effectively.
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Memorandum Of Association Constitution of Company.pptseri bangash
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A Memorandum of Association (MOA) is a legal document that outlines the fundamental principles and objectives upon which a company operates. It serves as the company's charter or constitution and defines the scope of its activities. Here's a detailed note on the MOA:
Contents of Memorandum of Association:
Name Clause: This clause states the name of the company, which should end with words like "Limited" or "Ltd." for a public limited company and "Private Limited" or "Pvt. Ltd." for a private limited company.
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Registered Office Clause: It specifies the location where the company's registered office is situated. This office is where all official communications and notices are sent.
Objective Clause: This clause delineates the main objectives for which the company is formed. It's important to define these objectives clearly, as the company cannot undertake activities beyond those mentioned in this clause.
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Liability Clause: It outlines the extent of liability of the company's members. In the case of companies limited by shares, the liability of members is limited to the amount unpaid on their shares. For companies limited by guarantee, members' liability is limited to the amount they undertake to contribute if the company is wound up.
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Capital Clause: This clause specifies the authorized capital of the company, i.e., the maximum amount of share capital the company is authorized to issue. It also mentions the division of this capital into shares and their respective nominal value.
Association Clause: It simply states that the subscribers wish to form a company and agree to become members of it, in accordance with the terms of the MOA.
Importance of Memorandum of Association:
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Protection of Members: It protects the interests of the company's members by clearly defining the objectives and limiting their liability.
External Communication: It provides clarity to external parties, such as investors, creditors, and regulatory authorities, regarding the company's objectives and powers.
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While the MOA lays down the company's fundamental principles, it is not entirely immutable. It can be amended, but only under specific circumstances and in compliance with legal procedures. Amendments typically require shareholder
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Accounting Basics
1. 1
Lesson 1: Basics of Accounting
1.1 Introduction
Accounting is a process of identifying, recording, summarising and reporting economic informa-
tion to decision makers in the form of financial statements. Financial statements will be useful to
the following parties:
Suppliers
Customers
Employees
Banks
Suppliers of equipments, buildings and other assets
Lenders
Owners
1.1.1 Types of Accounts
There are basically three types of Accounts maintained for transactions :
Real Accounts
Personal Accounts
Nominal Accounts
Lesson Objectives
On completion of this lesson, you will be able to understand
Principles and concepts of Accounting
Double Entry System of Accounting
Financial Statements
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2. Basics of Accounting
2
Real Accounts
Real Accounts are Accounts relating to properties and assets, which are owned by the business
concern. Real accounts include tangible and intangible accounts. For example,
Land
Building
Goodwill
Purchases
Cash
Personal Accounts
Personal Accounts are Accounts which relate to persons. Personal Accounts include the follow-
ing.
Suppliers
Customers
Lenders
Nominal accounts
Nominal Accounts are Accounts which relate to incomes and expenses and gains and losses of a
business concern. For example,
Salary Account
Dividend Account
Sales
Accounts can be broadly classified under the following four groups.
Assets
Liabilities
Income
Expenses
The above classification is the basis for generating various financial statements viz., Balance
Sheet, Profit & Loss A/c and other MIS reports. The Assets and liabilities are taken to Balance
sheet and the Income and Expenses accounts are posted to Profit and Loss Account.
1.1.2 Golden Rules of Accounting
Real Accounts Personal Accounts Nominal Accounts
Debit What Comes in The Receiver Expenses and Losses
Credit What Goes out The Giver Incomes and Gains
3. Basics of Accounting
3
1.1.3 Accounting Principles, Concepts and Conventions
The Accounting Principles, concepts and conventions form the basis for how business transac-
tions are recorded. A number of principles, concepts and conventions are developed to ensure
that accounting information is presented accurately and consistently. Some of these concepts are
briefly described in the following sections.
Revenue Realisation
According to Revenue Realisation concept, revenue is considered as the income earned on the
date, when it is realised. As per this concept, unearned or unrealised revenue is not taken into
account. This concept is vital for determining income pertaining to an accounting period. It
reduces the possibilities of inflating incomes and profits.
Matching Concept
As per this concept, Matching of the revenues earned during an accounting period with the cost
associated with the respective period to ascertain the result of the business concern is carried out.
This concept serves as the basis for finding accurate profit for a period which can be distributed to
the owners.
Accrual
Under Accrual method of accounting, the transactions are recorded when earned or incurred
rather when collected or paid i.e., transactions are recorded on the basis of income earned or
expense incurred irrespective of actual receipt or payment. For example, a seller bills the buyer at
the time of sale and treats the bill amount as revenue, even though the payment may be received
later.
Going Concern
As per this assumption, the business will exist for a long period and transactions are recorded
from this point of view.
The cash basis of accounting is a method wherein revenue is recognised
when it is actually received, rather than when it is earned. Expenses are
booked when they are actually paid, rather than when incurred. This method
is usually not considered to be in conformity with accounting principles and
is, therefore, used only in select situations such as for very small busi-
nesses.
4. Basics of Accounting
4
Accounting Period
The users of financial statements required periodical reports to ascertain the operational and the
financial position of the business concern. Thus, it is essential to close the accounts at regular
intervals. viz., 365 days or 52 weeks or 1 year is considered as the accounting period.
Accounting Entity
According to this assumption, a business is considered as a unit or entity apart from its owners,
creditors and others. For example, in case of a Sole Proprietor concern, the proprietor is treated
to be separate and distinct from the business, which he controls. The proprietor is treated as a
creditor to the extent of his capital and all the business transactions are recorded in the books of
accounts from the business stand point.
Money Measurement
In accounting, only business transactions and events of financial nature are recorded. Only trans-
actions that can be expressed in terms of money are recorded.
1.1.4 Double Entry System of Book Keeping
As per Double Entry System of book-keeping, all the business transactions recorded in accounts
have two aspects - Debit aspect (receiving) and Credit aspect (giving). For example, when a
business acquires an asset (receiving) and pays cash (giving) for it. This accounting technique
records each transaction as debit and credit, where every debit has a corresponding credit and
vice versa.
Features of Double Entry System of Book Keeping
The Double entry system of book keeping comprises of the following features :
Every business transaction affects two accounts
Each transaction has two aspects, i.e., debit and credit
Maintains a complete record of all business transactions
Helps to check the accuracy of the accounting transactions, by preparation of trial balance
Helps ascertaining profit earned or loss occured during a period, by preparation of Profit &
Loss Account
Helps ascertaining financial position of the concern at the end of each period, by prepara-
tion of Balance Sheet
Helps timely decision making based on sufficient information
Minimises the possibilities of fraud due to its systematic and scientific recording of business
transactions
5. Basics of Accounting
5
The following chart explains the way in which accounting transactions are recorded in the Double
Entry system and financial statements are prepared.
Figure 1.1 Double Entry System
1.1.5 Mode of Accounting
Accounting process begins with identifying and recording the transactions in the books of
accounts i.e., the first step in the Accounting Process is recording of transactions in the books of
accounts. Accounting identifies only those transactions and events which involves money and is
sorted based on various source documents.
The following are the most common source documents.
Cash Memo
Invoice or Bill
Vouchers
Receipt
Debit Note
Credit Note
6. Basics of Accounting
6
Voucher
A voucher is a document in support of a business transaction, containing the details of such trans-
action.
Receipt
When a trader receives cash from a customer against goods sold by him, issues a receipt con-
taining the name of such customer, details of amount received with date.
Invoice or Bill
When a trader sells goods to a buyer, he prepares a sales invoice containing the details of name
and address of buyer, name of goods, amount and terms of payments and so on. Similarly, when
the trader purchases goods on credit receives a Invoice/bill from the supplier of such goods.
Journals and Ledgers
A journal is a record in which all business transactions are entered in a chronological order. A
record of a single business transaction is called a journal entry. Every journal entry is supported
by a voucher, evidencing the related transaction.
Account
An account is a statement of transactions affecting any particular asset, liability, expense or
income.
Ledger
A Ledger is a book which contains all the accounts whether personal, real or nominal, which are
entered in journal or subsidiary books.
Chart of Accounts
A chart of accounts is a list of all accounts used by an organisation. The chart of accounts also
displays the categorisation and grouping of its accounts.
Posting
Posting is the process of transferring the entries recorded in the journal or subsidiary books to
the respective accounts opened in the ledger i.e., grouping of all the transactions relating to a par-
ticular account to a single place.
Accounting Period
Generally, the financial statements are generated for a regular period such as a quarter or a year,
for timely and accurate ascertainment of operating and financial position of the organisation.
Trial Balance
Trial balance is a statement which shows debit balances and credit balances of all Ledger
accounts. As per the rules of double entry system, every debit should have a corresponding
7. Basics of Accounting
7
credit, the total of the debit balances and credit balances should agree. A detailed trial balance
has columns for
Account name
Debit balance
Credit balance
1.1.6 Financial Statements
Financial statements are final result of accounting work done during the accounting period.
Financial statement serves a significant purpose to users of accounting information in knowing
about the profitability and financial position of the organisation. Financial statements normally
include
Trading
Profit and Loss Account
Balance Sheet
Trading Account
Trading refers to buying and selling of goods. The trading account displays the transactions per-
taining to buying and selling of goods.
The difference between the two sides of the Trading Account indicates either Gross Profit or
Gross Loss. If the credit side total is in excess of the debit side total, the difference represents
Gross Profit. On the other hand, if the total of the debit side is in excess of the credit side total, the
difference represents Gross Loss. Such Gross Profit / Gross Loss is transferred to Profit & Loss
Account. The Gross Profit is expressed as :
Gross Profit = Net Sales – Cost of Sales
Profit and Loss Account
The profit and loss account helps to ascertain the net profit earned or net loss suffered during a
particular period. after considering all other incomes and expenses incurred over a period. This
helps the company to monitor and control the costs incurred and improve its efficiency. In other
words, the profit and loss statement shows the performance of the company in terms of profits or
losses over a specified period.
The Net Profit is expressed as :
Net Profit = (Gross Profit + Other Income) – (Selling and Administrative Expenses + Depre-
ciation + Interest + Taxes + Other Expenses)
A key element of the Profit and Loss Account, and one that distinguishes it from a balance sheet,
is that the amounts shown on the statement represent transactions over a period of time, while
the items represented on the balance sheet show information as on a specific date.
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All revenue and expense accounts are closed once the profit and loss account is prepared. The
Revenue and Expenses accounts will not have an opening balance for the next accounting
period.
Balance Sheet
The balance sheet is a statement that summarises the assets and liabilities of a business. The
excess of assets over liabilities is the net worth of a business. The balance sheet provides infor-
mation that helps in assessing
A company’s Long-term financial strength
A company’s Efficient day-to-day working capital management
A company’s Asset portfolio
A company’s Sustainable long-term performance
The balances of all the real, personal and nominal (capital in nature) accounts are transferred
from trial balance to balance sheet and grouped under the major heads of assets and liabilities.
The balance sheet is complete when the net profit/ loss is transferred from the Profit and Loss
account.
1.1.7 Transactions
A transaction is a financial event that takes places in the course or furtherance of business and
effects the financial position of the company. For example, when you deposit cash in the bank,
your cash balance reduces and bank balance increases or when you sell goods for cash, your
cash balance increases and your stock reduces.
Transactions can be classified as follows :
Receipts – cash or bank
Payments – cash or bank
Purchases
Sales
1.1.8 Recording Transactions
The important aspect of accounting is to record transactions promptly and correctly to ascertain
the financial status of a company as on a particular date.
Generally, the business transactions may be of the folowing nature :
Purchase of goods either as raw materials for processing or as finished goods for resale
Payment of expenses incurred towards business
Sale of goods or services
Receipts (in Cash or by Cheques)
Payments (in Cash or Cheques)
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The Accounting information is useful to various interested parties, both internal and external viz.,
Suppliers, who supply goods and services for cash or on credit
Customers, who buy goods or services for cash or on credit
Employees, who provide services in exchange of salaries and wages.
Banks, with whom accounts are maintained
Suppliers of equipment, buildings and other assets needed to carry on the business.
Lenders from whom, you borrow money to finance your business
Owners, who hold a share in the capital of your business
Figure 1.2 Parties dealt with in a business process
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Points to Remember
Accounting is a comprehensive system to collect, analyse and commu-
nicate financial information.
Double Entry accounting is a system of recording transactions in a way
that maintains the equality of the accounting equation.
The three types of accounts maintained for transactions are real
accounts, personal accounts and nominal accounts.
Entity is the organisational unit for which accounting records are main-
tained.
Journal entry is a record of a single business transaction.
Voucher is a document evidencing the details of a financial transaction.
Ledger is a book in which accounts are maintained.
Trial balance is a list of the balances of all the ledger accounts.
Profit and loss statement shows the performance of the company in
terms of profits or losses made by it over a specified period.
Balance sheet gives an overview of the financial position of a company
as on a specific date.