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Kultur Dokumente
By Devarajan
➢ PERSONAL ACCOUNT: Debit the Receiver | Credit the Giver. E.g.: Mohan A/c.
➢ Real Account: Debit what comes in | Credit what goes out. E.g.: Machinery A/c.
➢ Nominal Account: Debit all expenses and losses | Credit all income and gains. E.g.: Salary A/c.
2. Deprecation:
Deprecation is a gradual reduction of fixed asset. Every year the asset value decrease from its original
value. Journal Entry: Deprecation A/c dr- To Fixed Asset A/c.
4. Dividend: It is a income for company, which is paid to a people who having shares in a company.
5. Bank Reconciliation Statement (BRS): It is a difference between cash book maintained by customer
and passbook maintained by bank. Example: Cheque issued but not presented.
8. Final Account: It is a statement which is prepared at the end of accounting period. It includes Trading,
Profit & loss, Balance sheet.
Real Account: It is divided into two types, Tangible and Intangible Asset.
Tangible Asset: The asset which have proper size, shape, or existence. E.g.: Plant& Machinery, Cash etc…
Intangible Asset: The asset does not have proper shape, size or existence. E.g.: Goodwill, Patent rights etc…
Nominal account: Accounts does not related to Individual or Asset. E.g.: Salary Account
10. Accounts Payable: Accounts payable are the amount a company, purchase goods or services on
credit from supplier or vendor.
11. Accounts Receivable: Accounts Receivable are the amount which has right to collect, because it sold
goods or services on credit to a customer.
13. Accruals / Accrued Income: Income received during particular account period, but not fully received
at the end of same year.
14. Liability: Liability refers to a financial obligation of a business. E.g.: Loan borrowed from bank.
15. Contingent Liability: It may or may not occur. Those are called Contingent liability.
16. Goodwill: It is an intangible asset. Which shown on asset side of the balance sheet.
17. Liquidity: It can be easily converted into cash. Formula: Liquid Ratio: Liquid Asset/Current Liability.
18. Working Capital: Day to day needs of business expenses. Working capital: Current Asset- Current Liability.
19. Trail Balance: It is a statement which shows debit and credit balance of ledger account, to test the
arithmetical accuracy of the book.
20. Invoice: Invoice is a business document which is prepared by seller of goods. It includes Invoice
Date, Number, Amount, etc…
21. Debtor: Is a person who receives benefit but without giving money or money’s worth immediately
but liable to pay in future or in due course of time.
22. Creditor: Is a person who gives benefits but without receiving money or money’s worth immediately
but to claim in future.
25. Voucher: Is a written document in supporting for a transaction, Voucher is necessary for audit the
account.
27. Ledger: Is a book in which a company or organization, writes down the amounts of money spends
and receives.
28. Cash Budget: It is document that shows the timing of cash inflow and outflow of the company.
29. Current Liability: This can be repayable within one year. It includes Bills payable, Outstanding Expenses etc…
30. Provision: It means specific losses like provisions for bad and doubtful debts, Deprecation etc…
32. Expenses: Expenses means, to purchase raw material and then to produce the goods.
33. Management Accounting: To make correct decision in accounting rules of the organization.
35. Current Asset: The assets which can be easily convert into cash within one year.
36. Fixed Asset: The life of an asset will be more than one year or more.
37. Revenue: Revenue is the income for the company for doing main activities such as selling goods or
providing services.
38. Cash: It is an Current Asset, Which shown on asset side of balance sheet.
39. Purchase: purchase is a trading account item, which shown on Debit side of trading account. It is
divided into two types; Cash purchase, or Credit Purchase.
40. Sale: It is divided into two types; Cash sales, or Credit sales, which shown on Credit side of trading account.
41. Reserve: It is part of saving for the organization, which helps the organization in dangerous situation.
43. Outstanding Expenses: Expenses paid but not fully paid during particular accounting period.
44. Finance: It is nothing but arts and science, of raising and spending of money/ funds.
45. Mutual Funds: It is kind of investment, money invested by investor in stocks or bonds. It has divided
into 3 types:
47. Stocks: stocks Unsold on particular date. It is divided into: Opening and closing stock.
48. Tax: Tax is a compulsory monetary contribution to a state revenue assessed and imposed by
government.
49. Drawings: Owner withdraws money from his own business for his personal use. Journal Entry: Drawing A/c Dr to Cash A/c.
50. Bad Debts: It is a amount cannot be recovered due to insolvency of persons or mental dishonor.
51. Ratio Analysis: It is a relationship between items or group of items in financial statement.
Equity Share: The rate of dividend will not be fixed. It has voting rights.
Preference Share: The rate of dividend will be fixed. It has not voting rights.
Liabilities Assets
Share Capital Investment
Issues of Shares Fixed Asset
Subscribed and Paid up capital Current Asset, Advance& Loans
Reserves & Surplus Miscellaneous Expenditure
Secured & Unsecured Loan Closing Stock
Current Liability & Provisions -------------------------------------------
Contingent Liability -------------------------------------------
Journal Entry:
➢ Important: Rent for the current month but payment made on next month?
→ Rent A/c Dr to Rent Outstanding A/c. -3 Mark. –Wipro.
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