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PRESENTATION ON ACCOUNTING PROCESS Presented by: Prachi Mittal Poorbi Tiwari

PRESENTATION ON

ACCOUNTING

PROCESS

Presented by:

Prachi Mittal

Poorbi Tiwari

ACCOUNTING

  • ‘Accounting is the art of recording , classifying and summarising in significant manner and in terms of money , transaction and events which are, in part, at least of a financial character and interpreting the result thereof ’.

    • The function of accounting is to provide quantitative information , primarily of financial nature, about economic entities, that is needed to be useful in making economic decision.

USERS OF ACCOUNTING INFORMATION

  • Accounting is of primary importance to the proprietor

and the managers. However, other person also interested in the accounting information such as-

I.

Proprietor

II.

Managers

III.

Creditors

IV.

Prospective investors

V.

Government

VI.

Employee

ACCOUNTING PROCESS

ACCOUNTING PROCESS

Contd:

  • TRANSACTION- Accounting starts with transaction. Transaction means Receipts, payments, sale, purchase etc. any give and take which has financial effects, which affects the concern.

  • ENTRY-

Transaction is recorded by way of an entry in the journal as per Double entry principle i.e. Debiting some accounts and crediting others with the equal amounts.

  • POSTING LEDGER- The term posting means transferring the debit and credit items from the journal to their respective accounts in the ledger. Each account will provide the complete details about the transaction.

JOURNAL

  • The word Journal is derived from the French word ‘JOUR’ means a day.

  • The journal records all daily transaction of a business into the order in which they occur. It is a book in which the transaction recorded first of all under the double entry system and subsequently they are posted in the ledger.

PROFORMA OF JOURNAL:

Date

Particulars

L.F.

Debit

Credit

(Rs)

(Rs)

(1)

(2)

(3)

(4)

(5)

         

CLASSIFICATION OF ACCOUNTS

  • In order to keep a complete and up-to-date records the entire transaction of any business, it would be necessary to classify the accounts in following way-

TYPES OF ACCOUNTS PERSONAL NOMINAL REAL ACCOUNT ACCOUNT ACCOUNT
TYPES OF
ACCOUNTS
PERSONAL
NOMINAL
REAL ACCOUNT
ACCOUNT
ACCOUNT

GOLDEN RULES

Personal Account

Capital, Person , Bank, Representative

  • DEBIT- the receiver

  • CREDIT- the giver

    • Real Account

Cash, Tangible Asset, Intangible Asset

  • DEBIT- what comes in

  • CREDIT- what goes out

    • Nominal Account Income and Expenditure

      • DEBIT- Expenses or losses

      • CREDIT- Incomes or gains

Journal Entry

  • 1. Received cash from Sudesh Rs 50,000.

  • 2. Brought goods for cash Rs. 12000.

  • 3. Office rent paid Rs. 3500.

  • 4. Received cash from Rana Pratap Rs. 6900.

  • 5. Furniture purchased for cash Rs. 24000.

Contd:

Date

Particulars

L.F

Debit Rs.

Credit Rs.

2005

Cash A/c

Dr.

 

50,000

50,oooo

Jan

1.

To Sudesh A/c

 

2.

Goods A/c To Cash A/c

Dr.

 

12000

12000

 

3.

Office rent A/c To Cash A/c

Dr.

 

3500

3500

 

4.

Cash A/c To Rana pratap

Dr.

 

6900

6900

 

5.

Furniture A/c To Cash A/c

Dr.

 

24000

24000

 

TOTAL

RS.

 

96400

96400

         

LEDGER

  • Ledger is the book which contains various accounts. In other words, ledger is the set of accounts. It contains all accounts of the business enterprise whether real, personal or nominal. It should be noted that exact names of accounts used in the journal should be carried in the Ledger.

Ex: if in the journal expenses a\c has been debited, it would not be correct to debit the office expenses a\c in

the ledger.

  • PROFORMA OF LEDGER:

Dr

Cr

 

Date

Particulars

J.F

Amount

Date

Particulars

J.F

Amount

               
               
               

Sudesh A/c

 

Date

Particulars

J.F

Amt

Date

 

Particulars

J.F

Amt

 

2001

To bal c/d

 

50000

2001

 

By Cash A/c

 

50000

     

50000

     

50000

 

Cash A/c

 

Date

Particulars

J.f

Amt

Date

Particulars

J.F

Amt

2001

To Sudesh A/c

 

50000

2001

By Goods A\c

 

12000

 

To Rana

 

6900

 

By Office

 

3500

Pratap A\c

Rent A\c

         

By Furniture A\c

 

24000

         

By Bal c\d

 

34500

Goods A/c

Date

Particulars

J.F

Amt

Date

Particulars

J.F

Amt

2001

To Cash a\c

 

12000

2001

By Bal c\d

 

12000

     

12000

     

12000

             
 

Rent A/c

 

Date

Particulars

J.F

Amt

Date

Particulars

J.F

Amt

2001

To Cash A\c

2001

By Bal c\d

3500 3500 3500 3500
3500
3500
3500
3500

Rana Pratap A/c

Date

Particulars

J.F

Amt

Date

Particulars

J.F

Amt

2001

To Bal c\d

 

6900

2001

By Cash A\c

 

6900

     

6900

     

6900

               
               

Furniture A/c

 
 

Date

Particulars

J.F

Amt

Date

Particulars

J.F

Amt

2001

To Cash A\c

2001

By Bal c\d

24000 24000 24000 24000
24000
24000
24000
24000
  • THANK YOU