Commerce: Commerce is started with human activities. Human activities are divided into 2 groups. 1. Economic activities 2.

Non-Economic activities 1 Economic activity: Economic activities are those activities in which money is involved. Economic activities are divided into 3 groups. 1. Business 2. Profession 3. Employment 2 Non-Economic activities: Non-Economic activities are those activities in which money is not involved. Ex: Love and affection

1.1 Business: Business is an economic activity which is carried on with the intention of
earning profit by doing business. Business means a state of being busy. Industry: Industry is the place where goods are manufactured and produced Industry is the back bone for business 1.2 Profession: Profession means rendering special services of exports in terms of money is called profession Professionals will get money in the form of Fee, remuneration 1.3 Employment: Employment means rendering services to the employer under agreement in terms of money is called employment. In employment employee will get money in the mode of salary. Commerce: The Exchange and Distribution of goods or services in terms of money is called commerce. Commerce includes Trade and Aids to Trade. Exchange: Exchange means transferring goods or services from one person to another person in terms of money with in a place. In the method of exchange only one place of people will get benefit. Distribution: Distribution means transporting goods or services from one place to another place in terms of money. In the method of distribution so many places of people will get benefit. Ex: Production - distribution (so many places) - exchange (one place) consumers Goods: Goods means Articles, Commodities, and Things which are purchased for resale in the business. In other countries Goods are called as merchandise.

Services: Services means Doing or Offering or Rendering some thing in terms of money is called Services. Ex: Hotel, Transportation, Currency: Currency is administrative money of one country. Trade: Trade means buying and selling goods or services in terms of money. Trade is divided into 3 groups. 1. International trade 2. Domestic trade 3. Re entry port trade. Aids to trade: Aids to Trade means the facilities which are very use full to run the Trade. Ex: Transporting, Warehouse, Godown, Banking, Insurance and so on. Business: Business is divided into 3groups 1. Sole trade ship. 2. Partner ship. 3. Company. 1 Sole Trade ship: The Business which is owned and controlled by single individual person is called Sole Trade Ship Business. Sole trade ship is also called as proprietor ship. In sole trade ship the liability of the proprietor is un limited In sole trade ship business the proprietor is a responsibility for all profits and losses whatever incurred in the business.

2 Partner ship business: Partner ship business is the business which is carried on by two or
more persons who joined to gather to share profits and losses whatever incurred in the business. In partner ship business the liabilities of the partners is un limited In the partner ship business the minimum number is 2 and maximum number for general business 20, bank business 10.

3 Company: Company is a voluntary association of persons who contributes capital to

company Company is an artificial person which created by law, having a Common Seal and a separate legal entity. A Company which is framed established and registered according to companies Act 1956is called company Companies are divided into 2 types 1. National companies 2. Multinational companies. 1 National companies: National companies are those companies which are located with in the boundaries of a country are called national companies.

National companies are divided into 2 groups. 1.1 Government Sector 1.2 Private Sector Private sector also divided into 2 groups 1.2.1. Private company 1.2.2. Public company 1.2.1 Private company: Private company is a company which is not a public company and a company by which its articles of association. Limits-its members are maximum to 50 Restricts-The rights to transfer its shares and debentures to any one. Prohibits-Issuing prospectus to the public to subscribe its shares and debentures Private Ltd: private means private company Ltd means our liability is limited to par value of share Ex: We purchased one share of Rs 100 in private company then our liability Ltd is 100. If we paid only 50 R s then we have to pay again 50 R s when the company is in loss or liquidation Common seal: Common seal is a seal or a stamp having company name and it used for every business paper and kept under authorized person. Legal entity: Legal entity means company is separated from the share holders. Company can sue on share holders and share holders can sue on company Ltd: Ltd means our liability is limited to extend of share value. 1.2.2 Public company: Public company is a company which is not a private company and a company by which its articles of association. Ex: Reliance, Satyam, Infosys, wipro. Does not restricts, the rights to transfer its shares and debenture to any one. Does not limits its maximum numbers its depends upon its capital, minimum numbers is 7. Does not prohibits issuing prospectors to the public to subscribe its shares and debentures. Public Ltd: Here Ltd means the liability of the share holder is Ltd to the extend of share par value 1 Government sector: 1.1.1Public enterprises (Govt company) 1.1.2Corporation.

1.1.1 Govt company: Govt company is the company which is established for the welfare of
general public. A company is called as a govt company if 51%of Its share capital is held either state govt of or central govt Ex: IDPL ECIL BSNL HMT.

1.1.2 Corporations: Corporation is an autonomous body which is created by the parliament

act Ex: RBI FCI LIC. Which is the 1st corporation in India RBI. MNC: It is a company which is framed established and registered in one country and having its number of places of business in so many countries. Ex: IBM, Microsoft, Foreign company: Foreign Company is a company which is framed established and registered in one country and having its establishment place of business in another country is called Foreign Company. BPO: It means BUSINESS PROCESS OUTSOURCING

In BPO we provide services to the customers through online. By providing services to the customer we get services charge. Now a day BPOs are providing so many Job opportunities to the Job aspirants
Ex: Genpact, Accenture BPO = Business Process Out sources It is established framed and registered in one country and having its operational functions in other country It is one of the booming sector in India The main intention of the BPO is bringing projects from other countries and providing services to them and earning money In Indian economy BPO plays a vital role there are many BPOs providing jobs to the job aspirants BPOs are changing the life style of the people thats why Indian economy is increasing day by day ACCOUNTING PRINCIPLES Principle: Principle means a fundamental belief or a general truth, which is ones established does not change in future. Accounting Principles includes. Accounting concepts, accounting conventions.

Accounting Concepts: Accounting concepts means Basic assumption or basic conditions based on the accounting is done. Concept: Concept means an Idea, Notion, or a thought which is universally accepted. A: Accrual concept, Account period concept. B: Business entity concept. C: Cost concept. D: Dual aspect concept. M: Money measurement concept, matching concept. G: Going concern concept. R: Realization concept. H: Historical concept. Accrual concept: (Accrual means outstanding): According to accrual concept all the business transactions even though not yet settled in cash must be taken into the Books of Accounts. This concept is the base for Accrual bases or mercantile bases. Based on this concept we are taking all credit transaction in the Books of Accounts. Ex: Salary Payable, Rent payable, Interest receivable, Dividend receivable, Goods purchases on credit (Accounts payables) Goods sold on credit (Accounts Receivables) Accrual concept is recognized by the companies Act 1956. Here all the business transaction means Credit transaction and priority is given to credit transactions. On 1st April goods purchased from tulasi 50,000, on 15th April cash paid 50,000 to Tulasi. st 1 Purchase a/c Dr 50,000 To Tulasi a/c 50,000 15th Tulasi a/c Dr To cash a/c 50,000 50,000,

Accounting period concept: According to accounting period concept all the Business transactions should be recorded in the Books of Accounts for the period of 12 months that is April 1st to 31st March. Based on this concept we are preparing Final Accounts that is Trading, P&L A/c Balance sheet. Business Entity Concept: According to business entity concept the business is treated as a separate entity or a person Business is separated from the proprietor Proprietor is the owner of the business Based on this concept the capital is treated as a liability to the business Net profit is treated as liability to the business because it belongs to owners

 If the business is a sole tradeship or partnership business then the net profit is added
to their capital If the business is a company then net profit (undistributed) is kept under the Reserves and Surplus in balance sheet at liability side. Cost Concept: According to cost concept all the business transactions should be recorded in the books of accounts at cost price only (actual amount involved) ignoring market price. Cost price should be considered for all the transactions except closing stock Closing stock is calculated at cost price or market price which ever is less we have taken into the books of accounts Dual aspect concept: According to dual aspect concept every business transaction shall have two aspects one is debit aspect and another one is credit aspect Based on this concept all the business transactions are classified into debit and credit Based on this concept accounting systems, accounting equation are implemented and balance sheet is tallied. Accounting systems: are those systems in which all the business transactions are recorded into the books of accounts after classifying them into debit and credit Accounting systems are two types 1) Single entry system 2) Double entry system Single entry system: Every business transactions shall have two aspects one is debit aspect another one is credit aspect The system of recording only one aspect of the business transactions is called single entry system This system is universally accepted and in this only cash transactions are recorded and it followed by the professionals (e.g. Lawyers, Doctors etc.,) If this system implemented in business then we will not prepare balance sheet and we do not know the profitability and financial position of the business Double entry system: Every business transactions shall have two aspects one is debit aspect another one is credit aspect The system of recording both aspect of the business transactions is called double entry system Based on this concept accounting systems are implemented and it is scientific and universally accepted The whole accounting is based on double entry system as well as GAAP. Based on this system the double entry system of book keeping is implemented If this system is implemented in the business then we will prepare balance sheet and we will know the true profitability and the financial position of the business. Money Measurement Concept: According to money measurement concept all the business transactions which are being expressed in monetary terms should be recorded in the books of accounts ignoring the non-monetary transactions

 Based on this concept we are recording all the business transactions in the books of accounts in which money is included E.g.: goods sold for cash (credit) Based on this concept all the business transactions should be recorded in the books of accounts in the uniform monetary terms

Matching concept: According to matching concept all the expenses whatever incurred in the business should be compared with the revenues whatever earned by the business for the particular period Based on this concept we are preparing trading and profit and loss accounts This concept is based for accounting period concept Going concern concept: According to going concern concept the business is assumed to run for a longer period This concept is also called as a continuous concept If we implemented this concept in the business first we will get credit regular costumers, faith and stability Based on this concept depreciation is provide on fixed assets. Based on this concept Prepaid expenses are treated as a current assets. Realization concept: According to Realization concept the income is considered and recorded in the books of accounts when it is realized (when it comes in the form of cash) Revenue is considered as income when sales is affected Historical concept: According to Historical concept all the business transactions are recorded into the books of accounts as a systematically like date wise

Accounting conventions: Accounting conventions means traditions, customs and

circumstances which are adopted in preparation of final accounts. They are CMCD. C =consistency M =Materiality C =Conservatism D =Disclosure.

Consistency : (Consistency means constantly): According to convention of consistency any rule, policy or method which are adopted in preparation of final accounts should be followed constantly Based on this convention depreciation methods are implemented Materiality: According to convention of Materiality all material information should be disclosed in the financial statements Based on this convention paisa is converted into rupee E g 1.80p = 2.00 rupee 1.30p=1.00 rupee

 Every small expense have to record into the books of accounts under this convention E g; Xerox= printing and stationary Postal stamps = Postage and telegram Tea=staff welfare expense

Conservatism: According to convention of conservatism all expected expenses and losses should be taken into the books of accounts ignoring expected incomes and gains Based on this convention we are providing depreciation on fixed assets (in real time) Based on this convention closing stock is calculated at cost price or market price which ever is less Disclosure: According to convention of Disclosure all the financial information should be disclosed in the financial statements Note: Dual aspect concept is the basic concept of accounting o Fundamental concepts of accounting are Business entity concept and money measurement concept o Fundamental accounting assumptions are Accrual, Going concern Consistency o Accounting assumptions are implemented in preparation of final accounts

GOLDEN RULES OF ACCOUNTANCY: The debit and credit of personal and impersonal accounts are called golden rules of accountancy. Classification of accounts: 1) Personal accounts. 2) Impersonal accounts Accounts are again divided into two groups: Temporary accounts : the accounts which comes in profit and loss accounts under nominal account e g : salaries, int. receivable. Permanent accounts : The accounts which comes in balance sheet under Real, Personnel accounts. E. g: All balance sheet items

Personal accounts: The accounts which deals with only the persons In this only names are reflected. Ex: Ramesh a/c, Laxmi & co, Andhra Bank.
Personal accounts are divided into 3 groups: they are 1) Natural personal account 2) Artificial personal account 3) Representative personal account. Natural personal accounts: The accounts which deals with only human beings E g Ramu a/c Manju a/c

Artificial personal accounts: The accounts which deals with only artificial persons which are created by law and having common seal and separate legal entity. E g: Vardhan & co a/c Tulasi & co a/c ICICI Bank & co a/c

Representative personal accounts: The accounts which deals indirectly with the persons E g: Staff, Union, Salary Payable, Prepaid Rent.

Impersonal account : The accounts which doesnt deals with persons.

These accounts are divided into 2 types: They are 1 Real account 2 Nominal account Real account : The accounts which deals with only the assets. Real account is divided into 2 types: Tangible real account : Tangible real account deals with only Tangible Assets. Theses assets which we can Touch, Feel, and See and measured in value. Eg plant and machinery a/c Land and building a/c Furniture a/c Intangible real account: Intangible real account deals with only Intangible Assets. These assets which we cannot Touch, Feel, and See But measured in value Eg Goodwill a/c Patents a/c 2)Nominal account: Nominal account is an accounts which deals with only Expenses & Losses and Incomes &gains. Eg Rent a/c Salary a/c Interest receivable a/c Depreciation a/c Account principles: Personal account Real account Nominal account

Personal account: Personal accounts are those accounts which deals with only the persons Debit = the receiver Credit = the giver Real account : Real account is an account which deals with only the assets Debit = what comes in Credit=what goes out

Nominal account: Nominal account is an account which deals with only expenses & loses and Incomes & gains Debit-=all expenses and losses Credit =all incomes and gains

Note:

o Personal accounts are opened in the books of accounts only for credit transactions or
liabilities or dues o Every transaction are recorded in the books of accounts in customer point of view o Personal accounts are natural, artificial and Representative Accounting methods (basis): Cash basis Mercantile basis or Accrual basis Mixed basis

Cash basis: In this system only cash transactions (cash receipts and cash payments) are recorded in the books of accounts Implementation: Lawyers, chartered accounts, doctors, government, professional experts Mercantile (accrual) basis: In this is system only credit transactions are recorded in the books of accounts o In this system cash will come in future so present this method is not used Mixed basis: In this system cash and credit transactions are recorded in the books of accounts o This system is follows so many companies. Accounting transactions: Cash transactions Credit transactions Non-cash transactions Cash transactions: If the cash receipt or cash payment is made immediately after the completion of business transaction is called cash transactions E g: Goods purchased for cash Goods sold for cash Credit transaction: If the cash payment or cash receipt of a transaction is postponed to the future date is called credit transaction E.g.: Goods purchased on credit Goods sold on credit

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Non cash transitions: It is a transaction in which cash is not involved but the books are adjusted. Generally this transactions are effected the financial statements Ex: Bad debts. Depreciation. Financial transactions: Financial transactions are those transactions in which money is included. Business transactions: Business transactions are those transactions which belongs to business. Accounting branches: Cost accounting Financial accounting Management accounting Cost accounting: Cost accounting is an accounting in which we will know the cost price of 1 unit produced In cost accounting we will prepare only cost sheet In cost accounting we do not prepare financial statements Financial accounting: Financial accounting is an accounting in which we will know the profitability by preparing profit & Loss account for the particular period. And we will know the financial position by preparing balance sheet for the particular date. In financial accounting we will prepare the financial statements (final accounts i.e., p & L a/c, and balance sheet)

What are financial Statements?

The financial statements are two types they are: o P & L account (income statement) o Balance sheet (position statement) o Audit Report. o According sec 210 of the companies act 1956 Management accounting: It is an accounting in which we will take rational management decisions by analyzing the recorded data It is also called decision making accounting Accounting subfields: Financial accounting Management accounting Book keeping accounting

Book keeping accounting: keeping the books in the business to recording day to day business transactions In book keeping clerical work is involved Object of book keeping

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Books of accounts: o The books which are used only to record business transactions and kept in the business are called books of accounts o Purchase book o Purchase returns book o Sales book o Sales returns book o Cash book and so on.

Account: It is a statement summarizing the record of business transactions in the form of Debit and Credit. According to Bank point of view: account: It is a statement which is setting out for the particular period all the transactions relating to a person or any other subject and the benefits which received are mentioned at one side and the benefits given are mentioned other side Ex: Pass book, Bank statement, Universally definition: Account is a consolidated statement of picture of all the business transactions. Note: All the business transactions are recorded in accounts only. Accounts are 3types Personal, Nominal, Real accounts. All Accounts are opened in Ledger only except cash account Accounts are prepared based on accounts Principles. Statement: Statement is that which contains, all the information regarding accounts Statements are prepared to know the position is profitability of accounts Accounts Vs Statement: o Accounts are created depends upon business transactions But statements are not created Ex: Purchased goods for cash, Purchase a/c Dr To Cash a/c o Statements are prepared based on accounts. o Accounts are prepared based on accounts principles but Statements are prepared based on accounts o Account contains Debit and Credit columns but Statement does not contain Debit and Credit. o Accounts are prepared for the particular period and statements are prepared for the particular date. o Ex: Trading Account, P&L account Balance sheet, Trail balance o Every business transaction is entered in account but not in Statement o Generally account contains opening balance but Statement does not contain opening balance

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o Accounts are balanced for the particular period but Statements are closed for o Statement contains generally addition and deduction but accounts doe snot
contains Debit: The left hand column of an account is called Debit. Credit: The right hand column of an account is called Credit The reputation of a person or firm Credit is the power full instrument to promote the sales Credit means cash receipts or payment is postponed to future date Transaction: Transaction means An act of performance in terms of money Event: The event means the end result of the business transaction Ex: closing stock, Balance sheet. Birth is transaction Death is an event All the transactions becomes events But event are not becomes transaction. ACCOUNTING: Accounting is the language of business (accounting is the commercial language) Accounting is very important to know the status of the firm. Accounting means the process of R=Recording (journal) C=Classifying (ledger) S=Summarizing (trail balance) A=Analyzing I=Interpreting R=Reporting Business transactions. Recording: Recording is the basic function of accounting. Recording is the first function of accounting process. All the business transactions are financial characters has evidence by supporting documents and entering into Books of Accounts is called recording. Recording is done in the Journal. Q) Which type of transactions we have to record into the Books of Accounts? We have to record only Business transactions which includes money into the Books of Accounts Classifying: Classifying means the systematic analyzing of the recorded data. In classifying we group all the Business transaction of one nature at one place Classifying is done in Ledger. Summarizing: The preparation of a trail balance is called a summarizing. In summarizing we keep all closing balances of ledger accounts ion one sheet the particular date

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 Summarizing leads to prepare trail balance, trading account, P&l account, Balance
sheet. Analyzing: The establishment of relationship between P&l account And Balance sheet is called analyzing. Interpreting: Interpreting means input the data in correct manner while preparing final account Reporting: Reporting means disclosing the financial statement to interested parties. Ex: Share holders, Board of directors, Management, employees.

JOURNAL: Journal is a preliminary Book, in which all the Business transactions are first recorded in chronological order after classifying them into Debit and Credit. Journal is the first step (book)of accounting process Journal is the base for ledger preparation Journal is also called Preliminary Book Primary Book Book of first entry Book of original entry Day book Prime Book Prime entry Book Note: Before writing entry in Journal

First identify those transactions whether it is business transactions or non business

transaction. After identifying then analyses the business transaction whether it is cash transactions and identity accounts which involved the accounts. After analyzing then classify that transaction into Debit and Credit. Procedure of Journal: Identify (B tror non Btr) Analyzing (cash/ credit or accounts involved) Classifying (Dr Cr) Recording (Journal) Chronological order. Entry: Entry means entering a Business transaction in Journal after analyzing and classifying Entry shall have 3 lines 1st Debit line 2nd Credit line

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Narration means explanation of transaction giving a small description. Date Particulars L.F Debit amnt Credit amnt

Journal entry: The format in which a transaction is recorded that is journal entry.

Q) Which transaction is recorded in systematically is called journal entry. Chronological order: Date Particulars L.F Debit Credit

Journalizing: Recording a business transaction in journal is called journalizing LEDGER: The Book which contained classified accounts information is called ledger. Ledger is a book which facilities recording of all types of transactions related to personal real and nominal accounts separately in related accounts The group of accounts recorded in a book is called ledger Ledger is the second step of accounting process. Ledger is prepared based on journal. Ledger is the base to prepare trail Balance Ledger is also called Book of final entry Final Book Principle Book Main Book The King of Books of Accounts. Secondary Book.

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 Ledger is the permanent source for all accounting information for the future purpose We will open all account in ledger except cash account because cash transactions are
numerous. It transactions are heavy then we will open separate Book (ledger)(sub ledger) Ledger Posting: Transferring the debit and credit items from the journal into their respective accounts in the Leger is called Ledger Posting. Format of Ledger Account Date particulars L.F Amount Date particulars L.F Amount

Types of ledgers: Debtors ledger (trade debtors/customers) Creditors ledger (trade suppliers/vendors) General ledger Self ledger (proprietor)

Debtors ledger: When all the debtors accounts are recorded in one book that is known as Debtors Ledger It shows always debit balance The total balance of these accounts indicates the total amount to be received from the customers Creditor ledger: When all the creditors accounts are recorded in one book that is known as creditors ledger It shows always credit balance The total balance of these accounts indicates the total amount to be paid by the company to the suppliers General ledger: When the company records all accounts related to the assets income and expenditure in one book that book is known as General Ledger. Accounts payables (trade suppliers/venders) Accounts receivables (customer) Expense accrual (Payable) Income accrual (receivables) Fixed assets Current assets

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Self ledger: When all accounts which indicate the relation ship between proprietor and the business firm are recorded in one book that book is known as Self ledger. Discount: Discount is an amount reduction in the sales price. Cash discount: Cash discount is an allowance which is given to attractive quick payments Cash discount should be shown in the books of accounts The percentage of cash discount is very low like 1%, 2%, 3%. Drawings: Drawings means the amount goods or services withdrawn by the proprietary from the business for his personal use Drawings may be Cash drawings, Goods drawings, Services drawings. Entry for Cash Drawing: Drawing a/c Dr xxx To Cash a/c xxx Capital a/c Dr xxx To Drawing a/c xxx Capital a/c Dr xxx To Cash a/c xxx Entry for Goods Drawing: Drawing a/c xxx To Purchase a/c xxx Entry for Service Drawing:

TRIAL BALANCE Q) What is mean by Trial Balance? Trial balance is a statement which contain of ledger accounts closing balances (or) Trial balance is the summery of ledger accounts closing balances. Q) Why should prepare the Trial Balance? We should prepare the trial balance to check the arithmetically accuracy of Books of Accounts. Q) What is mean by Arithmetically accuracy? Accuracy means to verify all the transactions correctly entered in accounts or not. Q) What is the important of Trial Balance? The importance of the trial balance is base to prepare final accounts Trial balance is prepared with all ledger accounts closing balances In trial balance all types of accounts will be shown. Preparation of trial balance methods: Total Method: In this Method

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Net balance method:

Balancing method is universally accepted method Trial balance is prepared based on Real, Nominal, and Personal accounts. While preparing of trial balance show all assets, expenses, and losses at Debit column, and all liabilities, incomes, and gains at Credit column Trial balance is a statement not an account. Generally closing stock will not come in trial balance because it is not closing balance of account Revised trial balance: A trial balance which is prepared with standing entries like salary payables, rent payables, sales tax, is called Revised T/B Suspense account: Due to some reasons trial balance may not agree and mistakes cannot be rectify them and preparation of Final account is very urgent that time the difference amount will be transferred to temporarily one separate account such account is called suspense account

FORMATE OF TRIAL BALANCE

Date Particulars L.F Debit Credit

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Personal Accounts: Sundry Debtors Sundry Creditors Capital Drawings Outstanding Expenses Prepaid Expenses Outstanding incomes Income received in advance Bills payables Bills receivables Bank Real Accounts: All type of assets and properties Good will Trade Marks Preliminary Expenses Purchases Purchase Returns Sales Sales returns Opening stock Closing stock Nominal Accounts: All types of Expenses and losses (Salaries, Wages, Rent ets) All types of incomes and profits Provisions and Reserves: All types of provisions and reserves Discount on Creditors Discount on Debtor General Reserve Special reserve and fund xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx Xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx

Opening stock: Opening stock means last year closing stock. Closing stock: Closing stock means unsold goods and left in the godown at the time of preparation of final accounts. If closing stock is given only in the trial balance then we will take in balance sheet at asset side. Closing stock a/c Dr To Purchase a/c If closing stock is given only adjustments then we will take in trading account at credit side and balance sheet at asset side.

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 If closing stock is given in trial balance and adjustments also then we will take which ever is less we have to take into Books of Accounts. Godown: Godown is a place which is used to kept all produced goods Warehousing: Warehousing is the place which is created with artificial facilities to kept a specified goods. Ex: medicines, egg, vegetables, TRADING ACCOUNT: Trading account is an account it is prepared at the end of accounting period to asses the Gross Profit or Gross Loss is called Trading account. Trading account is an account which is prepared to know the gross profit or loss Trading account is a account it is not a statement Trading account is prepared based on Nominal and Real account. While preparing the Trading account, Opening Stock, Purchase, and Direct Expenses are Debited to Trading account and Sales, Closing Stocks are Credited to Trading account FORMATE OF TRADING ACCOUNT Dr Date Particulars Amount Date In R.s To Opening Stock xxxx To Purchases xxxx To Sales Returns xxxx To Wages xxxx To Carriage inwards xxxx To Freight xxxx To Duty and Clearing xxxx charges To Marine insurance xxxx To Gross profit (Transferred to P and L account) xxxxx Cr Amount In R.s xxxx xxxx xxxx

Particulars By Sales By Purchase Returns By Closing Stock

By Gross Loss (Transferred xxxx to P and L account)

Gross profit: The net sales are more than the cost of goods sold, then the difference amount is called gross profit Gross loss: The net sales are less then cost of goods sold then the different amount is called gross loss

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PROFIT AND LOSS ACCOUNT Profit and Loss Account it is prepared to know the Net profit or Net loss for the particular period. To profit and loss account as it is called profit and loss account because generally the business man expects profit only. It is a 100% Nominal account. Profit and Loss account is an account it not a statement Generally profit and loss account starts with Gross profit at credit side It is also called as income statement While preparing profit and Loss account Debit all expenses and losses Credit all incomes and gains It is prepared based on matching concept (Nominal account) Profit and loss account will not contain any opening balance but its started with gross profit or gross loss NP=GP+OIIE Net profit is a profit which comes after deducting all indirect expenses and losses from gross profit + other incomes. Net profit: The Revenue and Gross Profit is more then Indirect Expenses then the difference amount is called Net profit Net loss: The Revenue and Not Profit is less then Indirect Expenses then the difference amount is called Net loss

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Dr
Date Particulars To Administrative/Office Management Expenses: To Office salaries Office rent Rates and Taxes Office Lighting Office Insurance Printing and Stationery Legal Expenses Audit Fee General Expenses Repair and Renewals Bank charges and commission Telephone charges Staff Expenses To Selling and Distribution Expense: Godown rent& Insurance Packing Exp Advertising Agents Commission Bad debts Traveling Exp Discount allowed Brokerage Free samples Trade exp Sales mans salary Carriage outwards Delivery charges Subscriptions To Financial Exp: Discount allowed Interest on capital Interest on loans ToMaintenanceand Depreciation Repairs to building Repairs to furniture Amount Date Particulars By Gross profit b/d Discount received Commission received Interest received Dividends Income from Investments Reserve for discount on Creditors Bad debts recovered Apprentice premium Profit on sale of asset other incomes Net loss

Cr
Amounts

TYPES OF EXPENSES, EXPENDITURES, GAINS, AND LOSSES

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Expense: Expense is an amount which is spent to get a short term benefit Or from day to day business operations (or) Expense is an amount with the hope of getting something. Expenses reduce the owners capital Expenses are debited to Profit and loss account Expenses are 2 types: 1 Direct Expense 2 Indirect expenses

1 Direct expenses: Direct expenses are those expenses which are direct involved in the Purchasing (production) goods or services Ex: wages Factory rent rates taxes. Warehousing rent Gas, fuel, coal clearing Fright inwards Carriage inwards Existed charges 2 Indirect expenses: Indirect expenses are those expenses which are involved to promote the sales or services Indirect expenses are 4 types: 1 Selling and distribution expenses 2 Administration or managerial expenses 3 Financial expenses 4 Non operating expenses All Indirect Expenses and Losses debited to P & L a/c & Incomes and Gains are Credited to P & L a/c Under Nominal account Expense accrual: The expenses are incurred but not yet paid is called expense accrual. EXPENDETURES: Expenditure is an amount which is spent to purchase something Ex: purchasing goods or services and so on Expenditure will give a long term benefit. Expenditure is increases owners capital. Expenditure helps to increase the capital Ex: 1) Purchasing petrol is expenditure Consuming petrol is expense 2) Purchasing stationary is expenditure Consuming stationary is expense 3) Purchasing = Expenditure Consuming = Expense Expenditure is divided.: 1 Capital Expenditure. 2 Revenue Expenditure. 3 Differed Revenue Expenditure.

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1 Capital expenditure: Capital expenditure is an expenditure which is used to acquire fixed asset. Ex: Land and building, Plant and machinery, Furniture. Capital Expenditure is an expenditure which gives the benefits to the business more then years Ex: Purchasing copy rights is comes under capital expenditure (Books) Purchasing patents is comes under capital expenditure (medicines) Purchasing trademarks is comes under capital expenditure (Colleges) Purchasing an old cinema theatre and additional constructions to building comes under capital expenditure Getting license certificates is comes under capital expenditure Registration fee is comes under capital expenditure Business expansion is comes under capital expenditure Revenue Expenditure: Revenue expenditure is an expenditure which is used to purchase goods or services The Expenditure which benefit will expire with in one year The Revenue Expenditure which gives a short term benefit Ex; Purchasing goods is comes under Revenue Expenditure. Purchasing services is comes under revenue Expenditure. Panting an old cinema theatre is come under revenue Expenditure. Differed Revenue Expenditure: It is an Amount which is incurred in the current year but the benefit will come in the subsequent years. ( or ) It means an amount incurred initially but we will get benefit in subsequent years. Ex: Heavy advertisements, Preliminary Expenses. Differed Revenue Expenditure will come in Balance Sheet at Asset side under the head of Miscellaneous Expenses Preliminary expenses: Preliminary Expenses are those expenses which are incurred at the time incorporation of an organization. Ex: registration fee Prepaid Expense: Prepaid expenses are those expenses which have been paid in advance and whose benefit will be available in future Ex: prepaid salaries, rent, Capital receipts: The amount which is recovered for selling fixed assets (machine) Capital gain: The amount which is received for selling fixed assets more then its value Ex; asset sold for 1 00 000 (actual value 80 000), Gain = 20 000. Capital loss: The amount received for selling fixed assets at lower than its value. Ex: Assets sold for 60000 (actual value 100000), Loss = 40 000. Goods loss by fire (not insured) capital loss. If the owners are the responsible for any loss then it comes capital loss.

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Revenue: It means getting amount by selling Goods or Services Revenue is the main source to the business Earning from interest and investments. Revenue receipts: The amount received from selling goods or services is called revenue receipts. Ex: Sold a pen Rs 10. Revenue gain: The amount received from selling goods or services more than its value is called revenue gain. Ex: Sold a pen Rs 10 (Cost price 8) Gain = 2. Revenue loss: The amount received from selling goods or services at lower than its value. Ex: Sold a pen Rs 6 (Cost price 8) Loss = 2. Cash theft by employee is called revenue loss. Income: Income is an amount which comes with efforts. Income accrual: The amount is receivable but not yet received is called Income accrual. Gain: Gain is an amount which comes with out effort. Ex: Received Rent, Dividend. Loss: Loss is an amount which is suffered accidentally in the normal causes of business. Ex: loss by fire, loss by theft Normal Loss: Arises on account of inherent quality in the goods which is unavoidable. Abnormal Loss: The loss which arises on account of the operation of external forces and which is avoidable. Ex: By theft, loss by fire, etc.

Depreciation:

Types of depreciation: 1Depreciation 2Depletion 3Amortization

1 Depreciation: Depreciation means the reduction in the value of fixed assets due to wear and tear. The permanent end gradually decreases in the Quality or Quantity or Value of fixed asset every year. Ex: Fixed Assets Machine, Fixtures. 2 Depletion: Depletion means the reduction in the value of Natural resource due to wear and tear. Ex: Quarries, Mines. 3 Amortization: Amortization means the reduction in the value of Intangible assets Ex: Good will, trademarks.

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Note: Depreciation methods are implemented based on convention of consistency. Depreciation is providing Based on going concern concept. Depreciation is provided based on convention of conservatism Reasons of Depreciation: Wear and tear Depletion Obsolesce Accidents Lapse of time Natural defects Structural defects. Need of depreciation: To know the actual fixed asset value To know actual profits To know actual financial position of the business To make a provision for replacement of old assets Depreciation is not provided on Land. Methods of depreciation: Straight line method Written down value method Annuity method Depletion method Insurance policy method Sinking fund method Time hour method Revaluation method Machine hour rate method Straight line method: It is also called Fixed Install Method under this method a fixed percentage of Depreciation is a written off every year. Written down value method: It is also called diminishing balance method under this method the depreciation is going down on every year Q) What is difference between straight line method and written down value methods?

In straight line method the profit is decreased, but in written down value method
profit is increased. Q) What is the Entry for Depreciation?

26

Depreciation a/c Dr xxxx To Fixed asset a/c xxxx.

Q) What is the Entry for provide Depreciation? Depreciation a/c Dr xxxx To provision for depreciation a/c xxxx. Q) What is the final Entry Provision for depreciation a/c Dr To Fixed asset a/c xxxx xxxx

Principle of depreciation: Annual depreciation = Asst total value scrap value No of years of asset Depreciation rate of percentage = Annual depreciation Total asset value *100

Q) If depreciation rate is given and purchase date is not given? In this case we have to provide depreciation for 6months Q) If purchase date is given implementation date is not given? In this case we have to provide depreciation from purchase date. Q) If purchase date is not given and implemented date is given? Depreciation is calculate from implementation date Rate of Depreciation is imposed on various articles Equipment 15% Fixed assets 10% Vehicle 15% Plastic item 50% Computers 60% Temporary items 100%

Provisions and reserves:

Provisions: Provision means any amount written By way of providing Depreciation due to wear and tear or Bad debts. Provisions are created before calculating the Net profit. All provisions are shown in the profit and loss account at debit side. Creation of provision is compulsory. Provisions are reduced the net profit. Reserves: Reserves means the amount kept a side out of the profit to face future risk.

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Reserve means an amount kept in the business for its future risks. Creation of reserves is possible when there are net profits. It is not compulsory Reserves are debited to profit and loss appropriation account.

PROFIT AND LOSS APPROPRIATION ACCOUNT P&L appropriation A/c: To know how much net profit is available to the equity share holders Preparation of P&L appropriation A/c is possible when there is net profit Generally P&L Appropriation A/c is starts with lost year net profit (If there is ) It is prepared only by the join stock companies ( pvt or pbl) Debit side Transfers to general reserve Transfers to other reserve Dividend paid (declared ) In termed dividend (paid) Tax Bonus Works men compensation The remaining balance is called surplus Credit side Last year profit and present year profit Surplus is an amount which is available to distributed equity share holders E P S = Net profit available to equity share holder No of equity shares Income statement: It is a statement which is prepared to find out net income which is available to equity shares holder Income statement is the mixture of trade account profit and loss account, profit and loss appropriation account This is original statement in real time BALANCE SHEET Balance sheet is a statement which contains liabilities and assets as a particular date Balance sheet indicates the financial position of the business for the particular date Balance sheet also called position statement Balance sheet is a fundamental statement of accounting Basically financial statements are 4 types Position statement Income statement Retained earning statement

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Cash flow statement According to GAAP Balance sheet is a fundamental as well as basic statement Balance sheet is prepared based Real a/c and Personal a/c Marshalling: The arrangement of assets and liabilities in balance sheet is called Marshalling. Liabilities: Liability means borrowing from out side. Liabilities are divided into 2 types: 1 Short term liabilities 2 Long terms liabilities

Short time liabilities: Short time liabilities are those liabilities which are repayable with in one year Short term liabilities are also called as current liabilities. Ex: Sundry Creditors Trade creditors Bills payables Bank over draft Long term liabilities (loans): Long term liabilities are those liabilities which are repayable after one year that is 2year or 3year Ex: Debentures Loans and advances Loans taken from the financial institution. Contingent liabilities: Contagions liabilities are those liabilities which are waiting for judgment under disputes Ex; Workmen compensation Loan: Loan is an amount which is taken from any financial institution or any person. Loan=cash. Total liabilities: Total liabilities include capital +s hare premium + reserves and surplus + long term liabilities + short term liabilities. Total liabilities mean all the liabilities including Capital which are mentioned at the liabilities side of the Balance sheet. Total liabilities mean all the liabilities which are mentioned at left hand column of Balance sheet. CAPITAL: Capital is the contribution of the businessmen to the business, which is invested with the intention of earn profit by doing business. Capital is the primary investment to the business by proprietor/Partners/share holders Capital is divided into 2: 1 Fixed capital 2 Working capital Fixed capital: Fixed capital is that which is used to purchase fixed assets

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L&B P&M Furniture Computer Fixed capital which will stay forever in the business.

Fixed capital is divided into 2: 1 Owner capital 2 Borrowed Capitals 1 Owners capital: The capital which is raised through issue of equity and preference shares + retained earnings is called owners capital In sole trade ship the capital which is invested by the proprietor. In partnership the capital which is invested by the partners. In Company the capital which is invested by share holders Borrowed Capital: The capital which is raised through issue of Debentures Loans taken from financial institutions Accepted a deposit from the general public. Working Capital: It is an amount which is used to conduct day to day business operations. Working capital is calculated as total current assets-current liabilities ASSETS: Asset is an economic resource to the business Asset is an expenditure which gives a long term benefit to the business Assets are acquired for the use in the business for a long term basis not for re-sale Q)Assets always show which balance? Ans: Debit Q) Assets are shows Debit balance why? Note: If any property is used in the business it is called asset If that asset is not used in the business then it is called property. Asset is used in business but property is not used In the business. Asset Vs property Property belongs to individual person whereas assets belong to business. Property indicates financial status whereas assets indicate position of the business. Property can be sold and transferred to any one but assets should not be transferred Assets are divided into 3 Groups: Fixed assets Current assets Other assets. Fixed asset: Fixed assets are those assets which are in fixed nature, which gives long term benefit to the business. Ex: Land and building.

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Plant and machine Furniture Fixed assets are divided into 2 groups: Tangible assets: Tangible assets are those assets which we can touch, feel, seen and measured in value. Ex: Land and building, plant and machine.

Intangible assets: Intangible assets are those assets which we cannot touch, seen, feel but measured in value Ex: Good will, copyright, patents, trademarks, Good will means the value of the reputation. Current assets: Current assets are those assets which are converted into cash within one year (one accounting year) Ex: Cash in hand Cash at bank Debtors Stock in hand Interest accrued on investments Loose Tools. Fictitious assets: Fictitious assets are those assets which will not have any physical form, and there value is not real. Fictitious assets are those assets which are created by the Business. Ex: Preliminary Exp, Differ revenue Exp, Prepaid Exp, Wasting assets: Wasting assets are those assets which are in fixed nature and which are gradually decreased by using. Ex: Natural resource, Quarries, mines Liquid assets: Liquid assets are those assets which are easily converted into cash into with in short period. Ex: all current assets except stock and prepaid expense. Absolute liquid assets: The assets which are already in the form of cash. Ex: Cash in hand, cash at bank, short term investment,

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Liabilities Share Capital: 1 Authorized capital 2 Issued capital 3 Subscribed capital 4 Called up capital Less: Calls in arrears Add: Forfeited Shares Reserves & Surplus: 1 Capital Reserve 2 Capital Redemption Reserve 3 Share Premium 4 Other Reserves Less: Debit balance of P&L a/c 5 P&L Appropriation 6 Proposed additions to reserve 7 Sinking Fund Secured Loans: 1 Debentures Add: Outstanding 2 Loans & Advances from Bank 3 Loans& Advances from subsidiaries 4 Other loans & advances Unsecured Loans: 1 Fixed deposits 2 Loans and advances from subsidiaries 3 Short term loans and advances Current liabilities & provisions: a)Current Liabilities: 1 Bills payable 2 Sundry creditors 3 Income received in advance 4 Interest accrued but not due on loans b)Provisions: 1 Provision for taxation 2 Proposed dividends 3 For contingencies 4 For P F and Pension Foot Note: Contingent Liabilities

Amount

Assets Fixed Assets: 1 Goodwill 2 Land 3 Buildings 4 Lease hold Property 5 Railway sidings 6 Plant and Machinery 7 Furniture and Fittings 8 Development of property 9 Patents Trade marks and Designs 10 Vehicles Investments: Current assets, Loans and Advances A. Current Assets: 1 Interest accrued on Investments 2 Stores and spare parts 3 Loose tools 4 Stock 5 Work in Progress 6 Sundry Debtors Less: Provision for doubtful debts 7 Cash in hand 8 Cash at Bank B)Loans and Advances: 1 Advances to subsidiaries 2 Bills receivable 3 Prepaid Expenses Miscellaneous Expenses: 1 Preliminary Expenses 2 Discount allowed on issue construction 3 Underwriting Commission 4 Interest paid out of capital construction 5 Development Expenditure not adjusted

Amount

during during

Profit and Loss account: (Show the Debit balance of P&L a/c carried forward after deduction of the uncommitted reserves)

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BANK RECONCILIATION STATEMENT Bank: Bank is a financial institution which is licensed to accept deposits from the general public and gives loans to them. (or) Bank is a financial institution which deals with the finance and accepts deposits from the general public and gives the loans to them. Bank transactions: Cash Deposits. Cash withdrawals Cheques deposits. Cheques withdrawals Demand draft.

Cash Deposit: I will deposit cash by filling pay in-slip and mentioned the following details Date Account no Name of the account holder Amount in figures and words Signature (depositor) Denomination Cash with draws: I will withdraw cash from the bank in three ways By ATM card By self cheque (if we have cheque book) By withdrawal form (if we have pass book) ATM card: ATM card is a plastic card which is issued by the bank to withdraw cash from ATM (Automatic teller machine) Debit card: Debit card is plastic card which is issued by the bank to withdraw cash as well as to purchase goods or services instead of cash Credit card: Credit card is a plastic card which is issued by the bank to the customer after verifying the customers standard income. It gives credit facility up to certain limit By using this card we can with draw cash from the ATM (limit) and we can purchase goods or services certain limit. Cheque deposits: We will deposit cheque by filing pay-in-slip and following the details. Date Account no. Name of the account holder. Cheque date. Cheque no Bank name Name of Branch Amount in words Depositor signature

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Types of cheques: Self Cheque Barer cheque and in cash met cheque Crossed cheque and in cash met cheeque Funds transfers: Transferring from one account to another account within the same bank and branch Demand draft: I will take DD by submitting DD application form along with your self cheque (cash) Private bank will not give DDs (cash) but gives account holders Discount Procedure: Discount facility is available only for faithful customers We can discount DDs in any bank if we have account. Step 1 Fill up pay-in-slip Attached cheque or DDs along with the pay-in-slip Fill up bill purchase form (Discounting form) Approach manager or authorized person After taking permission from manager then process it After competing all the formalities your cheque amount or DD amount will be credited to your account Local cheques within five days out of 10 to 15 days according to 1949 Banking act under article 14 Over draft: Over draft is a loan facility which is given by the bank to faithful customer after taking a necessary security Q) What is the relationship between the Banker and customer? Debtor and Creditor relationship Q) What is the creditor? If customer deposited cash in the bank then customer becomes creditor to the bank, bank becomes debtor to the customer Q) What is the Debtor? If bank gives loan to the customer then customer becomes debtor to the bank and bank becomes a creditor to the customer Cash credit: Cash credit is an account Cash credit is the loan facility which is given by the bank to any customer after taking guarantee and security It is the loan facility to give big industries

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Q) What is the Deferences between Overdraft and Cash credit?

In over draft account the amount is debit in pass book, but in cash credit account loan
amount is credited impossible In over draft interest is charged entire amount, but in cash credit interest is charged only utilized amount

In over draft account the rate of interest is very high , but in cash credit account rate
of interest is very low Overdraft account will be closed but cash credit account never end Types of Bank accounts Saving account Current account Joint account Demit account Cash credit DD account IMPARTANT QUESTIONS If Cash book shows debit balance It means cash in hand If pass book shows credit balance It means cash at bank If pass book shows debit balance what it means It means over draft and unfavorable balance Reconciliation: Reconciliation means finding the reasons for the difference between any 2 accounts and their should be rectified Q) Why should be reconciliation? Finding the outstanding balance which is payable and receivable (or)

We should reconciliation to know how much amount we have to pay to the suppliers
and how much amount we have to receive from the customer or any others at a particular date Ex: Purchase account is showing Rs 1000, Cash account is showing is 10,000 Purchase account Dr 9,000 To Cash account 9,000

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Bank reconciliation: Finding the reasons for the difference between cash and pass book balances, If there is any mistake is done it should be rectified them B R S: BRS means Bank reconciliation statement in which reconciliation is done and which gives a complete and satisfactory explanation for the deference between cash book and pass book balances. Pass Book: Pass Book is a Book which is issued by the bank to the customer to record bank transactions on behalf of the customer (or) Pass Book is nothing but a true copy of the bank ledger account Q) Who will prepare the Cash Book? By business man Q) Who will prepare the Pass Book? By the Banker Q) Who will prepare the BRS? By business man who has a current account in any Bank. Q) When will prepare the BRS? We will prepare the BRS after receiving the Bank statement from the bank, then I will compared with Cash Book, If any mistake is done, then I will prepare the BRS at the end of the month or depends up on transactions. Q) Is it compulsory to prepare the BRS? No, that time I will not prepare BRS, if the transactions are correctly entered in cash book and pass book. Needs of BRS: Reflect the actual bank balance position To find out any mistake is done in recording banking transactions To know the delay in the collection of cheques Reasons of BRS: 1. Cheques issued but not presented for payment. 2. Cheques issued but not presented for payment. That time Banker Debited same amount of LIC premium on behalf of the customer. 3. Cheques deposited in the bank but not credit in the pass book. 4. Cheques deposited in the bank but not credit in the pass book. That time banker credited same amount Interest on debenture. 5. bank charges. 6. direct deposits by the customer 7. wrongly deposited in cash book. 8. wrongly credited in cash book.

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Treatments: 1) Cheques issued but not presented payment.(+) If cheques issue to the supplier then immediately I will reduce the cash book by passing this entry Suppliers account Dr xxx To Bank account xxx If that cheque is not presented by the supplier then first I will do BRS after receiving bank statement from the bank then I will increase the cash book by passing this entry. Bank account Dr xxx To Supplier account xxx Remaining 5 months nothing I will do but If the cheque is presented by the supplier then I will reduce the cash book passing this entry. Supplier account Dr xxx To Bank account xxx

2)Cheques deposited in bank but not presented (credited) (-) If the cheque is recived from the customer then I will immediately increase the cash book by passing this entry Bank account Dr To Customer a/c xxx xxx

If the cheque is bounced then I will do BRS after receiving bank statement form the bank and decrease the cash book by passing this entry Customer account Dr To Bank account xxx xxx

If it is cleared in the remaining period then I will increase cash book after receiving Bank statement from the bank by passing this entry Bank account Dr xxx

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To Customer account

xxx

3)Bank charges: (-) In this case I will do BRS after receiving bank statement then I will reduce the cash book by passing the entry Bank charges account Dr To Bank account 4) Direct deposits by the customer (+) In this case first I will prepare BRS after receiving a bank statement from the bank then I will increase cash book by passing this entry Bank account Dr xxx To Customer account xxx xxx xxx

5)Incomes collected by the bank on behalf of customer Final treatment is add after preparing the BRS 6) Wrongly debit in cash book In this case first I will do BRS after receiving bank statement from the bank Final treatment less 7) Wrongly credit in cash book In this case first I will do BRS after receiving Bank statement from the bank Final treatment is Add

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SUBSIDIARY BOOKS: The different transactions are classified into various groups and relevant transactions are recorded in a separate journal such journals are called subsidiary journals or Books of original entry or subsidiary books Subsidiary books are derived from the journals Q) Why should you maintain the subsidiary books in the business? We should maintain the subsidiary books in the business mainly to save the time and to do work easily Q) What is the important of subsidiary books? The importance of the subsidiary books are to reduce the work pressure Q) Do you maintain subsidiary books in software? No, We do not maintain Subsidiary books in software We can maintain subsidiary books in manually Q) When the subsidiary books maintain in the business that time you will prepare journal entries or not? Generally we do not write Journal entries. (If we maintain Subsidiary books) TYPES OF SABSIDIARY BOOKS 1) 2) 3) 4) 5) 6) 7) 8) Purchase Book Purchase returns Book Sales Book Sales returns Books Cash Books Bills payables Book Bills receivables Book Journal proper

PURCHASE BOOK: Purchase: Purchase means buying goods or services in terms of money with the intention of re-sale. Purchase account: Purchase account is an account in which recorded Credit and Cash purchases

40

Dr Date

Particular

J.F No

Total Date amount

Particulars By Balance c/d

J.F No

Cr Total amount xxxx

xxxx To Balance d/d xxxx

xxxx

Purchase Books: Purchase a book is subsidiary book in which recorded only credit purchase of goods or services. Purchase Book is kept in the Business to record credit purchase of goods or services with the intention of re-sale In purchase Book Asset purchases and Cash purchases are not recorded Total purchases includes cash and credit purchase Net purchases = Total purchases ( purchase returns + other) Format of Purchase Book: Date Particular In word Invoice no 1 L.F No Amount in Rs 1,50,000

25-9-08

10 Urea bags

Purchase returns Book : It is a Book in which recorded only credit purchase returns of goods due to poor quality (or) It is kept in the business to record only credit purchase returns of goods. Supplier account Dr xxx

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To Purchase returns a/c Format of purchase book Date Particulars

xxx

Debit Note no

L.Fno Amount

Debit Note: (Debit memo) means credit purchase returns.

Debit note is a document which is issued to the suppliers, when the goods purchased
from them are returned due to poor quality What To Whom When Why = Debit note = Supplier = Purchase returns =Poor quality

Debit note is a document in which all the details relating to returned goods and their value is mentioned. Q) Why it is called as a debit note?

It is called as a Debit note because the party a/c is debited It is prepared 2 copies, one is sent to the Suppliers, and another one is kept in the
business. Q) If we issued/sent Debit note to the supplier then what will happened?

If we issued Debit note to the supplier then the payable amount is reduced by
(debiting) passing this entry. Suppliers a/c Dr xxx To Purchase returns a/c xxx

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Telephone : Telegram : To NAGARGUNA FERTILISER KAKINADA

Grain market road Jammikunta Date 02-06-2008 BAGYA LAXMI FERTILESER JAMMIKUNT, KARIMNAGAR

The goods are returned because of the following reasons We seek for your acceptance Quantity 50 Particular Potash Rate. Rs 250 Amount 12,500

Reason: Order for 50 urea bags but received potash bags Reference Invoice no7438, Date 15-05-08 Signiture: BAGYA LAXMIFERTILISER

Sales Books: Sales: Sales means selling goods or services in terms of money with the intention of to earn profit by doing business Sale of goods to the customer with the intention to earn profits Sales account: Sales account is an account in which recorded credit and cash sales Format of sales account: Dr Date Particular J.F No Total Date amount Particulars J.F No Cr Total amount xxxx To Balance c/d

xxxx

xxxx

43

By Balance b/d

xxx

Sales Book: Sales Book is a subsidiary book in which recorded only credit sales of goods Sales book is kept in the business to record only credit sales of goods. In Sales book asset sales and cash sales are not recorded Total sales includes cash and credit sales Net sales = Total sales (sales returns + others) Format of Sales Book: Date Particular In word Invoice no 1 L.F No Amount in Rs 1,50,000

10-9-08

10 Urea bags

Sales return Book: It is a book in which recorded only credit sales return of goods due to poor quality ( or) It is kept in the business to record only credit sales returns of goods or services Sales returns a/c Dr To Customer a/c Format of Sales return book: Date Particulars xxx xxx Credit Note n L.Fno Amount

44

Credit Note : (Credit memo) It means credit sales returns

Credit note is a document which is issued to the customer when the goods sold to them
are returned due to poor quality What = credit note To whom =customer When = sales returns Why =poor quality Credit note is a document in which all the details relating to returned goods or services and their value is mentioned Q) Why it is called as a credit note?

It is called as a credit note because the party account is credit It is prepared 2 copies one is sent to the customer an other one is keep in the firm
Q) If issued credit note to the customer then what will happen? If it is issued credit note to customer then the receivable amount is reduced from them by crediting ( passing this entry) Sales returns a/c Dr xxx To Customer a/c Credit Note xxx

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Telephone : Telegram : To THIRUPATHI FERTILISER HUZURABAD

Grain market road Jammikunta Date 02-06-2008 BAGYA LAXMI FERTILESER JAMMIKUNT, KARIMNAGAR

Quantity 50

Particular Urea

Rate. Rs 400

Amount 20,000

Reason: Goods damaged on transit Reference Invoice no4581, Date 15-05-08 Signiture: BAGYA LAXMIFERTILISER

CASH BOOK: Cash book is a subsidiary book in which cash receipts and payments are recorded. Q) Who is the cashier? The person who maintains cash book is called a cashier $ Cash book plays double role, Ledger as well as Subsidiary book Q) Why should the cash book always shows debit balance? Cash book always shows debit balance because the cash payments cannot exceed more then opening balance + Cash receipts. Types of cash books: Simple cash book Double column cash book Three column cash book Petty cash book J.F No Total Date amount Particulars J.F No Cr Total amount

Format of Cash book: Dr Date Particular

46

xxxx By Balance c/d

Xxxx To Balance b/d xxx

xxxx

General cash book maintained in all types of business In general cash book only cash receipts and payments are recorded Double column cash book contain cash, Discount columns. Triple column cash book contain cash, discount and bank, columns

Petty cash book: The book which is used only to record small cash payments to words petty expenses is called petty cash book Q) Who is the petty cashier? The person who has maintained petty cash book, that person is called petty cashier.

Q) What is the specialty of petty cash book? $ The specialty of petty cash book is every payment is entered 2 times, one is total column, Second one is Analytical column Cash Lf date particular Vch total Analytical of expenses recieved no no pymnt In r.s Postg Offce Tlgrm Crg Sndry remia exp exp exp exp exp

47

Q) What is the deference between cash book and petty cash book? In cash book cash receipts and payments are recorded, but in petty cash book only small payments are recorded except cash receipts from the customer Q) What is the importance of petty cash book? The importance of petty cash book is to control the over payments Q) Defined imprested system? Under imprested system the petty cashier will set an amount from the head office what ever he expensed last week or last month JOURNAL PROPER: Journal proper is a subsidiary book in which only specified transaction are recorded such transactions are not recorded in remaining subsidiary books Opening entries: Opening entries are those entries which are comes in journal proper at the time of new business started as well as new books are opened in running business In new business: Stock a/c Dr Xxx Cash a/c Dr Xxx Machine a/c Dr Xxx To Capital a/cxxxx

In running business: Cash a/c Dr Xxx Asset a/c Dr Xxx To Capital a/c To Liabilities a/c

xxx xxx

Combined entries:(Compound entries) Combined entries are those entries which contain more than one debit or more than one credit is called combined entries Cash a/c Dr Xxx Asset a/c Dr Xxx Good will a/c Dr Xxx To Capital a/c To Loan a/cxxx To profit a/c

xxx xxx

Closing entries: Closing entries are those entries which are comes in Journal proper after balancing all Nominal accounts such balances transferred to trade, profit and loss account at the end of the year Trading a/c Dr Xxx

48

To Opening BAL a/c xxx To Purchase a/c xxx To direct exp a/c xxx Adjustment entries: Adjustment entries are posted at the end of accounting period to reflect the correct balances of revenue expenses between accrual basis and cash basis. Accrual entry: Adjustment entry/Cash entry: Final entry: Salary a/c Dr xxxx Salary payable a/c xxxx Salary payable a/c Dr xxxx To Cash a/c xxxx Salary a/c Dr xxxx To Cash a/c Dr xxxx Prepaid rent a/c Dr To rent a/c Xxx xxx xxx

Depreciation a/c Dr Xxx To Fixed Asset a/c

Rectification entries: If an error has been committed it is rectified through a journal entry is called rectification entries.

RECTIFICATION OF ERRORS: Error is a mistake committed in book keeping Error can be broadly divided into 2 types: 1 Errors of Principle 2 Clerical Errors.

1 Errors of Principle: Errors of principle are committed when a transaction is not recorded according to accounting principles Ex: Capital expenditure treated as revenue, business expenditure treated as personal expenditure etc. 2Clerical errors: Clerical errors are those errors which are generally committed by the clerical staff while recording the transactions in the account books such errors may be.

a) Errors of omission: when a transaction is either completely or partially omitted from

the books it is called error of omission. Ex: Purchase of goods on credit may be omitted to be entered in the purchases book sales of goods on credit omitted to be posted in the personal account of the customer

49

b) Errors of Commission: Such errors arise when any transaction is incorrectly recorded either wholly or partially. Ex: Entering wrong amount to wrong side of an account etc. c) Compensating errors: In case of such errors one error is compensated by other Errors are divided into 2 categories: 1 Errors disclosed by disagreement of trial balance 2 Errors not disclosed by disagreement of trial balance 1 Errors disclosed by trial balance: Wrong totaling of subsidiary books Items omitted to be posted from a subsidiary book into ledger Posting of a wrong amount to a ledger account Posting an amount on the wrong side of the ledger account Wrong additions or balancing of ledger accounts An item of subsidiary book posted twice to ledger account Omission of a balance of an account in the trial balance Balance of some account wrongly entered in the trial balance Balance of some account written on wrong side of trial balance 2Errors not disclosed by trial balance: Omission of an entry altogether in a subsidiary book Writing the wrong amount in the subsidiary books Posting an item on the correct side but in the wrong account Compensating errors Errors of principle

NATURE OF WORK Voucher: Voucher is an evidencing document to support cash payment or cash receipt. Generally we pay cash to the suppliers are some one after taking a signature on voucher. Voucher is divided into 2 types: 1 Cash voucher. 2 Bank voucher.

Cash voucher: Cash voucher is voucher which is used only for cash payments and cash receipts. (Or) Cash voucher is an evidencing document which is used only for cash payments and cash receipts Cash voucher is 2 types 1 Cash payment voucher 2 Cash received voucher

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Cash payment voucher: Cash payment voucher is a voucher which is used only for cash payments. (Or) Cash payment voucher is an evidencing document which is used only for cash payments Format of the cash payment voucher BLF GM road , jammikunta , karimnagar Cash payment voucher Date :__________ Name/To : _______________ Amount:_________________ Head :___________________ Narration :_______________ Prepared Accountant Authorized Receiver

No payment is made with out proper authorization. Q) What are the content of the cash payment voucher? $ The content of cash payment voucher, Voucher date, Name of the party, Amount in words and figures, Name of the head, Narration, Authorized signature, Cashier signature, Receiver signature. Q) How to prepare the Voucher? We have to prepare voucher by giving the details Voucher date, Name of the party, Amount in words and figures, Name of the head, Narration, Authorized signature, Cashier signature, Receiver signature. Q) How to verify the Voucher? We have to verify the Voucher with Supporting Documents or Bills and Voucher date, Name of the party,

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Amount in words and figures, Name of the head, Narration, Authorized signature, Cashier signature, Receiver signature. Q) What are the Supporting Documents? $ The documents which is evidencing to support a business transaction is called Supporting Documents. Ex: Vouchers, Bill, Counter files, Invoice. Q) How to processing Voucher? After completion of the voucher preparation and verification then I will take approval from the authorized person and I will make payment after taking signature from customer or some one. I will enter the same date into Cash Book, & system and. I will give a number to the voucher after the filing Q) What is filing?

After recording in cash book then giving ledger folio no.

Cash receipt voucher: Cash receipt voucher is voucher which is used only for cash receipts (or) Cash receipt voucher is an evidencing document which is used only for cash receipts Format of the cash receipt voucher BLF GM road , jammikunta , karimnagar Cash Receipt voucher Date :__________ Name/from : _____________ Amount:_________________ Head :___________________ Narration :_______________ Prepared Accountant Authorized Receiver

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Bank Voucher: Bank voucher is a voucher which is used only for bank receipts and payments.(or) Bank voucher is an evidencing document which is used only for bank receipts and payments Bank Voucher is 2 types 1 Bank payment voucher 2 Bank receipt voucher

1Bank payment voucher: Bank payment voucher is a voucher which is used for only bank payments.(or) Bank payment voucher is an evidencing document which is used for only bank payments. It is used only when the amount is more than 25000 It is prepared when the transactions are made through cash Format of Bank payment voucher BLF GM road , jammikunta , karimnagar Bank Payment voucher Date :__________ Name/To : _______________ Amount:_________________ Cheque no:______________ Cheque date:___________ Bank name:_____________ Branch name:__________ Head :__________________ Narration :______________ Prepared Accountant Authorized Receiver

Bank receipt voucher: Bank receipt voucher is a voucher which is used only for bank receipts.(or) Bank receipt voucher is an evidencing document which is used only for bank receipts Format of Bank Receipt voucher BLF GM road , jammikunta , karimnagar Bank Receipt voucher Date :__________ Name/From : ____________ Amount:________________ Cheque no:______________ Cheque date:___________ Bank name:_____________ Branch name:__________ Head :__________________ Narration :______________ Prepared Accountant Authorized Receiver

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INVOICE: Invoice is the evidencing document for purchase or sale It is also called as a Bill Invoice is 2 types 1 Purchase invoice 2 Sales invoice 1 Purchase invoice: Purchase invoice is the evidencing document for purchasing goods or services Format of Purchase invoice NAGARJUNA FERTILEZERS KAKINADA EAST GODAVARI INVOICE/BILL Date :_________ Invoice no :__________ To Party name :_________________ Address :_________________ __________________ Credit/Cash: __________________ S.no Particulars of items No of units Unite price Total amnt Tax Net amnt

Ph no : 08727 286505 Cell : 98482 32629

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Urea Bags

450

2700

108

2592

Terms and conditions: Tin : Cst no : Vat no : Apgst no : Authorized signature Q) What are the contents of purchase invoice? The content of purchase invoice: Invoice date Invoice no Name of the party and address, Credit/ Cash. S no Particular of items No of units Unit price Total amount Tax Net amount Tin Cst no Vat no Apgst no Terms and conditions Authorized person Q) How to verify purchase invoice?

I will verify the purchase invoice with Purchase Order, Goods Receipt Note, and each
& everything. Q) Who will prepare the purchase invoice?

Purchase invoice is prepared by the suppliers.

Q) What is Purchase Order? Purchase Order is an evidencing document for purchasing goods or services. Q) How to prepare the Purchase Order?

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$ Purchase Order is prepared by the purchase department based on the stores department. First invites the Quotations from the suppliers then select the best Vendor based on rate, discount, quality, and credit period, and. It is prepared 3 copies. 1st Copy is sent to the suppliers. 2nd Copy is stores department. 3rd Copy is accounts department. Q) What is the content of Purchase Order? Date Purchase Order no Delivery date Place of delivery Units price Total amount Q) Who will prepare the Purchase Order?

Purchase Order is prepared by the purchase department based on stores department.

Q) When will prepare the Purchase Order?

After receiving the Quotation from the Supplier if satisfied the Quotation list then we
will prepare the Purchase Order and sent to Supplier for purchasing goods. Q) What is Goods Receipt Note?

Goods Receipt Note is an evidencing document for receiving the goods from the
supplier.

Q) What is the Delivery Challen? Delivery Challon is an evidencing document for delivering the goods to the buyer. Q) How to process the Purchase Invoice? After verifying all the details first we have record in Purchase Book and we have send one copy to store department and one copy send to purchase department Q) How to file Purchase Invoice?

After entering Purchase Book and giving a Ledger folio no.

Q) What is the Mode of Payment?

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 After checking purchase order, purchase invoice, delivery chllan. Q) How to make a payment to the Suppliers? After tacking purchase invoice from the Supplier. We will check purchase invoice with Purchase Order, Goods Receipts note, and if any purchase returns, discount, credit period, advances is there deduct form the total amount, and after we check the Bank details then I will release the payment to suppliers with terms and condition.

SALES INVOICE: Sales invoice is an evidencing document for selling goods. Q) When will prepare the sales invoice?

After receiving the sales order from the customer then I will check the stock register
then. If goods are available we will prepare the sales invoice Format of sales invoice BLF Grain market road, Jmmikunta, Karimnagar Ph no : 08727 286505 Cell : 98482 32629

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INVOICE/BILL Date :_________ Invoice no :__________ To Party name :_________________ Address :_________________ __________________ Credit/Cash:__________________ S.no 1 2 Particulars of items Urea Bags Potash No of units 6 10 Unite price 450 200 Total amnt 2700 2000 Tax 108 80 Net amnt 2592 1920

Terms and conditions: Tin : Cst no : Vat no : Apgst no : Authorized signature

Q) How to prepare the sales invoice? $ We have to prepare the sales invoice by giving the date. Invoice date Invoice no Name of the party and address S no Particular of items No of units Unit price Total amount Tax Net amount

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Tin Cst no Vat no Apgst no Terms and conditions Authorized person Q) How to verify sales invoice? $ We will verify the sales invoice with the sales order, and checking the following date. Invoice date Invoice no Name of the party and address S no Particular of items No of units Unit price Total amount Tax Net amount Tin Cst no Vat no Apgst no Terms and conditions Authorized person Finally we will check whether it is cash or credit. Q) How to process the sales invoice? After completion of sales invoice preparation, verification then I will check the invoice raised for cash or credit. If Invoice is raised for cash then I will immediately entered in cash book and give a ledger folio no If Invoice is raised for credit then I will immediately entered in sales book and give a ledger folio no Sales invoice should be filed descending order Q) How to maintain cheque inwards register?

I will maintained cheque inwards register regarding the chaque received from whom
cheque no, cheque date, amount, Q) How it is issuing cheques to creditors?

After checking the purchase book how much amount we have to pay to the creditor
neither partial amount nor full payments by cheque. REPORTS:

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Q) How to prepare the daily reports. Daily reports are 4 types. 1 Cash report 2 Bank report 3 Stock reports 4 Sales report 1 Cash report: The report which is prepared to know how much cash we received and how much cash we pay. Cash report contains opening balance + cash receipts cash payments. 2 Bank report: The report which gives all the information regarding daily bank transactions. Bank report start with opening balance + cheque deposited and credited. 3)Stock report: The report which gives a complete information regarding daly stock status Stock report contains opening balance + goods purchases goods sole 4 Sales report: Sales report is that which gives complete information regarding daily sales status. Sales report starts with yesterday sales + today sales sales returns Sales report starts with yesterday sale OUTSTANDING STATEMENTS Q) What is mean by the outstanding statements? $ Outstanding statements are those statements which are prepared to know the how much amount we have to receive from the Debtors and how much amount we have pay to the Creditors at a particular date Out standing statements are divided into 2: 1) Debtors statement 2) Creditors statement

1Debtor statement: Debtor statement is a statement in which we will know how much amount we have to receive from the Debtors (Customers, Trade debtors) at a particular date. Q) Preparation of debtors statement is compulsory or not? $ The preparation of Debtors statement is not compulsory when all the sales are made in cash. Q) How to prepare the Debtor statement? $ I will prepare the debtor statement based on sales Book and Cash Book.

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Q) When will prepare debtor statement? $ I will prepare the debtor statement. When the goods are sold on credit basis Format of Debtor statement Particulars Opening Balance Add: Credit sales Interest on sales 10 000 500 Amount in r s 20 000 10 500 30 500 Less: Cash received Advances Sales returns Discount on debtors Bad debts Bills accepted Receive the outstanding amount 10 000 5 000 400 300 2 000 6 000

23 700 6 800

Creditors statement: Creditor statement is a statement in which we will know how much amount we have pay to the supplier for the particular period Q) Preparation of creditor statement is compulsory or not? $ Preparation of creditor statement is not compulsory when all the goods are purchased in cash Q) When will prepare the creditor statement? $ I will prepare the creditor statement when the goods are purchased on credit basis

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Q) How to prepare the creditor statement? $ I will prepare the Creditor statement based on purchase Book and Cash Book. Format of Debtor statement Particulars Opening Balance Add: Credit Purchases Interest on Purchases 10 000 500 Amount in r s 20 000 10 500 30 500 Less: Cash received Advances Purchases returns Discount on creditors Bad debts Bills accepted Pay the outstanding amount 10 000 5 000 400 300 2 000 6 000

23 700 6 800

Accounts payables:
These are the persons from whom we have purchased goods and availed services on credit basis the amount to them is still pending from us. (or) Accounts payables means how much amount we have pay to the trade creditors and others for purchasing goods or services on credit basis at an a particular period

Accounts receivables:
These are the person to whom we have sold goods and availed serviced on credit basis the amount is still pending from them.(or) Accounts receivables means how much amount we have received from the trade debtors and others for selling goods or services on credit basis at a particular date Debt: Debt is an amount which is received from the debtors $ The amounts due from others or to others are called Debt. Book Debt: the amount due from others or to others as per Book of accounts is called Book Debt

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 The amount due as per Books of accounts is called Book Debt. Debtors: Debtor is a person from whom we have to receive Debtors is a person who is the payable to the business The person who has to pay Debtors mean accounts receivables Trade debtor: Trade debtor is a person from whom we have to receive money for selling goods or services on credit Sundry debtors: It means accounts receivable. On Account: On account means credit Creditors: Creditor is a person to whom we have to pay Sundry Creditors: The amount is payable to out sider is called Sundry Creditor or accounts payables. Accounts Payables 3 types: Trade creditor P Os Non P Os P Os means known liability: Salary payable Rent payable Convenience Interest payable P f contribution

Non P Os means utility bills Electricity bills Water bill Telephone bill Sales commission Transport charges VAT: Vat means value added tax, its a sales tax imposed on the sale of goods and services, It is an indirect tax. Break even point: It means when the total sales equal to total cost, It is a point of no profit or no loss at this point income is exactly equal to its expenditure.

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Margin of safety: the excess of actual sale of production over the break even point is called margin of safety Budget: A plan of how many will be spent over a period of time in relation to the money available Debenture: Debenture is an acknowledgment of Debt or Loan issued by the company under its common seal. GAAP: $ GAAP means General Accepted Accounting Principles $ GAAP includes accounting principles accounting standard and accounting policies $ GAAP is prepared by financial accounting standard board $ The whole accounting is based on GAAP as well as Double entry system under the Dual aspect concept Accounting cycle: 1st Identify the business transactions Journalizing Ledger posting Trial balance Profit and loss account Balance sheet Balance sheet and Profit and Loss account Trial Balance Ledger Journals Transactions Business Capital Proprietor Intention of earning profit

Business cycle:

Accounting cycle:

Accountancy Accounting FASB GAAP Dual aspect concept Double entry system Accounting Equation

Account Equation = Assets = Capital + Liabilities Balance sheet is tally / prepared based on Accounting Equation Dual aspect concept is the base to Accounting Equation

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Purchase cycle:

Quotations Purchase order Invoice GRN, DC Sales

Rules of Accounting Equation: Debit Credit = Increase in asset = Decrease in asset (Real account) (Real account)

Debit = Decrease in Capital (Personal account) Credit = Increase in Capital (Personal account) Debit = Increase in Expense (Nominal account) Credit = Decrease in profit (Nominal account) Provident Fund: It is an amount which is kept for the employee future purpose It is 2 types: 1 PF Deduction from the Employee salary 12% on basic 2 PF Contribution from the employer 12.5% on basic salary Treatment: 1) Provident fund deduct from the Employee salary Salaries a/c Dr 10 000 To PF deduction a/c 1200 To Cash a/c 8800 2) PF Contribution from the employer PF Contribution a/c Dr To PF Contribution Payable a/c 1300 1300

Note: o If both are not paid yet to government a/c then show them as a Liability o If both amounts are deposited in government a/c PF deduction a/c Dr xxx PF Contribution a/c Dr xxx To Cash/Bank a/c xxx ESI: Employee state insurance PT: Professional Tax is a tax which is imposed on the salary of employee below 10 000

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 Professional tax is not an expense to the business but P F contribution is expense to the company Deduct tax from the employee salary: Salary a/c Dr xxx To cash a/c xxx To PT Payable a/c xxx If Professional tax is not paid then shows it as a liability in the balance sheet at liability side.

If it is paid then write this following entry:

PT Payable a/c Dr xxx To Cash/Bank/c xxx Sales tax: Sales tax is a tax which is imposed on sales Sales tax is an indirect tax $ Sales tax is not an expense to the business because sales tax amount is collected from the customer by the seller ad latter it is deposited in government account Sales tax we should be deducted from gross sales Cash a/c Dr xxx To Sales a/c xxx To Sales tax payable a/c xxx Sales tax payable a/c Dr xxx To Cash a/c

xxx

If it is not paid then show liabilities side of balance sheet Cash discount: Cash discount is an allowance which is given to attractive quick payments It should be shown in the books of accounts % is very low like 1 2 3. Discount a/c Dr xxxx Cash a/c Dr xxxx To Cash a/c xxxx To Received Discount a/c xxxx Trade discount: Trade discount is an allowance which is given at the time of sales to push of the sales Bad debt: Bad debts means the amount which is not collected from the customer $ Bad debts deducted from the Sundry Debtors. Bad debt a/c Dr xxxx To Sundry debtors xxx Bills Payable: the document evidencing the amount owed by a business to creditors such as suppliers Bills receivable: the document for the amount owed to a business by customer

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Q) What is the difference between Account and finance? Account: Accounts means daily recording of financial activities of on organization Finance: Finance is the management of funds from the source and usage of funds and also control of cash flows. Q) What are the Final Accounts? Final accounts are those statements in which income is earned for particular period and financial position for the particular date. Q) What assisting to your senior when preparation of the final accounts? When the preparation of final accounts I will provide ledger, invoices, vouchers, and Bank statements. Q) What are the closing entries? Closing entries which are incurred when the time of preparation of final accounts Q) What is mean of reconciliation? The process of making it possible for 2 different ideas, facts etc to exist together without being apposed to each other. Q) What is mean by Turnover? The total trading income from cash and credit sales is called Turnover Cheque: A bill of exchange drawn upon a specified banker and not expressed to be payable otherwise than on demand. Cost: the amount of expenditure incurred on or attributable to a specified article product or activity Discount: A reduction from a list price, quoted price or invoiced price if also refers to the price for obtaining payment on a bill before its maturity

BLF GM road , jammikunta , karimnagar Cash Receipt voucher Date :__________ Name/from : __________________ Amount:_________________ Head :___________________ Narration :_______________ Prepared Accountant Authorized Receiver

Format of the cash receipt voucher

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