Professional Documents
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What Is Accounting???
What Is Accounting???
Fixed assets:-
fixed assets are those assets which is tangible and not change in short period of
time
Ex- Land, Building, Machinery, Furniture etc.
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Basic Terms-Capital & Liabilities
·Capital Capital means the amount (in terms of money or assets having
money value)
·Liability Amounts owed to entities outside of the business e.g.
bank loan, supplier payments & overdrafts
Basic Term-Expenses
Outstanding expenses:-
The expenses remaining unpaid at the end of the accounting period are called
outstanding expenses. Certainly expenses like salaries, rent etc. of the every month will
be paid in the next months
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Prepaid expenses:-
The cost of goods or services already paid for but not yet fully used or consumed.
Prepaid insurance premiums and prepaid rent are examples of prepaid expenses.
Accounting Equation
All accounting entries in the books of account for an organisation have a relationship
based on the ‘accounting equation’:
Ledger
Trial Balance
Final Account
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What are the various type of
Accounts?
Accounts
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Journal Rule- 1
Debit what comes in
Credit what goes out.
Aloo, the owner has purchased a machinery worth Rs. 10,000 for his business
Explaination:
Machinery Account will be Debited by 10,000
(because business is receiving a machinery)
Cash Account will be Credited by 10,000
(because business is giving cash )
Entry :
Machinery A/c Dr. 10,000
To Cash A/c 10,000
Journal Rule - 2
Debit the receiver
Credit the giver.
Business purchased Machinery from Tomato on credit worth Rs. 2,000
Explanation
Machinery has come into the business so according to rule # 1 it will be
debited and on the other hand Tomato is giving something to the business therefore
according to rule # 2 his account will be credited
Entry
Machinery A/c Dr. 2,000
To shyam A/c 2,000
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Journal Rule - 3
Debit all the losses and expenses
Credit the gains and profit.
Business paid a salary of Rs. 5,000 to staff
Explanation
Cash has gone out of the business so according to rule # 1 cash will be credited
and on the other hand salary a kind of expense for the business and it will be debited as
per rule # 3.
Entry
Salary A/c Dr. 5,000
To Cash A/c 5,000
Discount
Trade discount A discount from the list price of a commodity allowed by a
manufacturer or wholesaler to a merchant
Ex-purchase goods worth Rs.20000, trade discount 10%
purchase A/C Dr 18000
cash A/C 18000
Bad debts
The data who failed the paid amount. It is called bad dates.it is a kind of loss of
bisiness.
Ex-john owe us Rs.10000 became insolvent.we could receive only 40 paisa
per in rupes.
Cash A/C Dr 4000
bad dates A/C 6000
To john A/C 10000
Ex-amit who was debtas a bed dates Rs.5000.last year has pay the amount.
cash A/C Dr 5000
To bad dates A/C 5000
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What is Journal ? Show its
format.
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What is Ledger? Show its
format.
Ledger : Book or Register which contains, in a summarized and
classified form, a permanent record of all transactions.
Ledger Format
J. Amo Date J Amo
Da Particular F Particular .
unt unt
te F
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Ledger Posting
Let us understand how to post the journal entries into ledger
Example: there is entry to Paid to Rent
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What is Trial Balance???
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The End
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