Beruflich Dokumente
Kultur Dokumente
UNIT:1
Personal Account
The accounts relating to living individual are personal account. Anil A/c, BMC A/c, Debit the Receiver Credit the Giver LIC A/c, SBI A/c, Capital A/c & Drawings A/c
Real Account
The accounts relating to goods and other assets are real account
Accounts Relating to Goods Purchase A/c Sales A/c Purchase return A/c Sales return A/c Goods Burnt by fire A/c Goods stolen A/c Goods withdrawn for personal use A/c Goods Distributed as sample A/c
Nominal Account
Accounts relating to (incomes, Profit) & (Expenses, Loss). Rent Received A/c Dividend Received A/c Wages A/c Debit the (expenses, Loss) Credit the ( income , Profit) Admin Exp. A/c Sales & Distribution Exp. A/c
Journal
The books in which day to day transactions are recorded. Format:
Date Particulars L.F Debit (Rs.) Credit (Rs.)
Ledger
Dr.
.. Account
Cr.
Types of Transactions
(1)Starting a new business. Example: Started business with cash 2000, Furniture of 1500, goods of 3000 and loan of 800 from Mr.y.
Types of Transactions
(2) Drawing Transactions. Example: (1) Paid Life insurance Premium Rs. 470. (2) Goods of Rs. 500 were withdrawn for personal use.
Types of Transactions
(3)Goods Transactions. it has Four Parts:
Purchase:
Purchase Return:
Types of Transactions
Goods Transactions.
(1) Cash A/c Dr To Sales A/c (2) Customers A/c . Dr To Sales A/c
(1) Sales Return A/c .. Dr To Customers A/c
Sales:
Sales Return:
Types of Transactions
(4) Goods going out for other reasons Transactions.
Transactions are follow: (1) when goods are burnt or damaged by fire. (2) when goods are stolen or lost. (3) when goods are given as charity. (4) when goods are distributed free as sample. (5) when the owner takes away goods for his personal use. Goods of 2400 were damaged by fire. The insurance Co. accepted a claim for 1600. The damaged goods were sold for 360.
Types of Transactions
(5) Discount & Allowance Transactions.
Trade Discount: (Not recorded in books of A/c) Cash Discount: (Recorded in Books of A/c) Example: (1) purchased goods of Rs. 2500 at 20% trade discount from Mr.Y. (2) Rs. 520 was due from Manish. His a/c was settled by accepting Rs. 500 in cash.
Types of Transactions
(6) Purchase & Sales of Assets transactions.
Example: (1) Purchase Machine of Rs. 10000 and paid Rs. 1000 for installation charges. (2) Sale of furniture at Rs. 5000.
Types of Transactions
(7) Expenses and Incomes Transactions.
Example: (1) Paid wages Rs.50. (2) Paid for fire insurance premium Rs.50 and life insurance premium Rs.75.
Types of Transactions
(8) Loans and Interest on Loans Transactions.
Example: (1) Borrowed Rs. 5000 as a loan at 10% P.a from Ketan. (2) Given a loan of Rs. 2000 at 15% to Vishal.
Types of Transactions
(9) Bad Debts Transactions.
Example: (1) Rs. 1000 due from Rushi was written off as he is declared insolvent. (2) Rs. 600 is received from Rushi which was written off as bad debts.
Types of Transactions
(10) Bank transactions. Example: Cash is paid into Bank:
Types of Transactions
Bank transactions.
Example
1) Business started with 25000 cash, Furniture of 10000, Loan of 10000 from Mr.Y 2) Goods of Rs. 5000 were withdrawn for personal use. 3) Bought goods of Rs. 12000 from Ajay. 4) Goods of 5000 were damaged by fire. The insurance Co. accepted a claim for 2000. 5) Return goods of Rs. 2000 to Ajay. 6) Received cash from hemal Rs. 350 and allowed discount of Rs. 50 7) Rs. 2000 due from sahil was written off as he is declared insolvent. 8) Drew from bank for Office use Rs.1000
Trial Balance
Definition: At the end of the accounting period all the accounts of a firm are closed and with the help of balances, a list or statement is prepared, which is known as trial balance. All debit balance shown, Debit side of the Trial Balance. All Credit balance shown, Credit side of the Trial Balance The total of both the sides of Trial Balance must be equal.
Purpose of Framework
Help to preparers of financial statements in applying Accounting Standards. Help to the Accounting Standards Board in the development of future Accounting Standards and in its review of existing Accounting Standards. Help to the Accounting Standards Board in promoting harmonisation.... Help to auditors in forming an opinion as to whether financial statements conform with Accounting Standards. Help to users of financial statements in interpreting the information contained in financial statements.
Scope of Framework
1) Components of Financial Statements 2) Objectives of Financial Statements 3) Users of Financial Statements & their information needs 4) Qualitative Characteristics of Financial Statements. 5) Elements of financial statements 6) Concepts of Capital and Capital Maintenance
2) Performance (its profitability) 3) Cash flows (investing, financing and operating activities)
enterprise)
Capital Maintenance
a) Financial Capital Maintenance
b) Physical Capital Maintenance
Memorandum of association
The name of the company The name of state in which its registered office is situated. Object of the company. Statement of Liability of the member is limited. No of shares to be taken by each subscriber to the memorandum
Article of association
Rules for internal management Matters of issue of shares & debentures Rights of member Share holders meetings Appointment of directors Directors remuneration Board meetings