ACCOUNTING PROCESS

AFTERSCHO☺OL
– DEVELOPING CHANGE MAKERS
CENTRE FOR SOCIAL ENTREPRENEURSHIP
PGPSE PROGRAMME –
World’ Most Comprehensive programme in social
entrepreneurship & spiritual entrepreneurship
OPEN FOR ALL FREE FOR ALL

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AFTERSCHO☺OL's
- PGPSE MATERIAL
- online mba programme
FORwww.afterschoool.tk
PGPSE PARTICIPANTS
 ACCOUNTING PROCESS
Dr. T.K. Jain.
AFTERSCHO☺OL
Centre for social entrepreneurship
Bikaner M: 9414430763
tkjainbkn@yahoo.co.in
www.afterschool.tk, www.afterschoool.tk
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AFTERSCHO☺OL's
- PGPSE MATERIAL
- online mba programme
FORwww.afterschoool.tk
PGPSE PARTICIPANTS
 GOALS OF ACCOUNTING
• To provides complete and accurate
information
• To enable a business firms to have proper
record of transactions
• To identify the results of business
transactions
• To enable proper tax payments and
proper legal administration
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 Systems
• Single entry system (generally cash book
is maintained, for non-cash transactions,
you make entries in respective accounts)
• Double entry system (For each
transaction, there are two aspects and
debit and credit total is always equally. It is
easier to rectify errors).

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 FEATURES OF SINGLE ENTRY
• Maintenance of personal accounts : Usually under this
system, personal accounts are maintained while real
and nominal accounts are avoided.
• Maintenance of cash book : A cash book is maintained
which usually mixes up both personal transaction and
business transaction.
• Dependence on original vouchers : In order to collect
the necessary information, the original vouchers are
referred.
• No uniformity : The application of this system may
differ from firm to firm as per its individual
requirements and convenience.
• Similarity: The system is suitable in case of small
proprietary or partnership concerns.
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 WHAT IS STATEMENT OF
AFFAIRS
• Statement of affairs is a statement of assets
and liabilities of a business on a particular
date. It is virtually the balance sheet of the
business and has got two sides, assets side
and liabilities side. All the assets of the
business are listed on the assets side. The
amount of cash in hand, cash at bank and
those due from debtors appear at their correct
figure but all other assets are shown at their
estimated values.
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 HOW TO ASCERTAIN PROFIT IN
SINGLE ENTRY SYSTEM ?
• Take help of statement of affairs.
• Calculation of Capital at the beginning : For this purpose a statement of
Affairs is prepared for the beginning of the period. The balancing figure is
treated as capital at the beginning of the period.
• Calculation of Capital at the end : For this purpose also a Statement of
Affairs is prepared for the end of the year and the balancing figure is
treated as capital at the end.
• Adjustment of Capital at the end : For this purpose, drawing made during
the year is added to the capital at the end and deduct there from the
additional capital introduced during the year. Drawings are added to the
capital at the end because any drawings made during the year can
reduce capital at the end but not profit. The fresh capital introduced is
deducted from the capital at the end because any increase in capital at
the end due to introduction of capital during the year is not an increase in
capital due to profits made during the year.
• Calculate the difference : The difference between capital in the end and
capital in the beginning gives profit

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 HOW TO SWITCH OVER FROM
SINGLE ENTRY TO DOUBLE
ENTRY
• You can go for conversion of all the
accounts or you may also go for step by
step conversion.

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 CONVERSION FROM SINGLE
ENTRY TO DOUBLE ENTRY
• All the accounts appearing in the Statement of Affairs as in the beginning of
the year should appear in ledger. Accounts which are not already there in
the ledger should be opened with opening balances as appearing in the
Statement of Affairs. Cash Account in the form of Cash Book and the
accounts of trade debtors and trade creditors would already be there. Other
personal accounts and all real accounts will have to be opened.
• The items which have not already been posted form the Cash Book will have
to be posted to the relevant accounts. It will mean that all the nominal
accounts will also be opened.
• The accounts of all the customers and suppliers will be analysed and double
aspect of all those transaction will be completed whose double aspect has
not already been completed. It will be mean that Sales Account, Purchases
Account, Sales Returns Account, Purchases Returns Account, Bad Debts
Account, Discount Account etc., will also be opened in ledger.
• Transactions which have not been recorded so far will now be recorded. For
example entries will have to be made for outstanding expenses,
depreciation of assets, income received in advance, etc.
• Trial balance will be prepared. If it does not agree, errors will be located and
rectified till the trial balance agrees.
• Final accounts and balance sheet will be prepared.

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 WHAT ARE THE TYPICAL
ACCOUNTING ENTRIES..?
• On receiving application money :
• Bank a/c dr.
• To Share Application and Allotment A/c
• On allotment :
• Share application dr.
• To share capital a/c
• On calls :
• Share Calls a/c dr.
• To share capital account
• Bank a/ c dr.
• To share calls a/ c
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 Basic principles :
• Debit what comes in, credit what goes out
• Debit the receiver, credit the giver
• Debit all expenses and credit all income.

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 HOW TO ENSURE ERROR FREE
ENTRIES…
• Prepare trial balance every month
• Prepare bank reconciliation statement
• Prepare control accounts (control
accounts like debtors control account and
creditors accounts are prepared).
• Establish proper internal control system –
ensure that every transaction is properly
verified – so that there is no possibility of
error)
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 What are non-profit
organisations??
• NPOs, NGOs, VOs, are registered under
section 25 of companies act or societies
registration act or Indian trust act or other
such law.

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 Objectives of NPOs
• The main aim of non-profit organizations is to render services to
various sections of the society for which people of the society will
be charged either free of cost or charge at no profit and no loss
basis.
• Non-profit organization raise funds from agencies who neither
accept return for their donations nor desire benefits for the
resources they provide.
• Such organizations earn their reputation on the basis of their
contribution to the society.
• There is no individual or joint ownership as regards non-profit
organisations. The identity on behalf of the society is considered as
the honour and its ownership can neither be transferred nor be
sold.
• Management of the organization is entrusted to persons having
interest in rendering services and who have no recoverable
investment with them.

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 WHAT ARE ACCOUNTING IN
NON PROFIT ORGANISATIONS?
• They are not for profit, so they don’t
prepare P&L account but prepare receipt
and payment account and income and
expenditure account.
• Receipt and payment account is like cash
book and income and expenditure

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 RECEIPT AND PAYMENT
ACCOUNT
• Left side is receipt, right side is payment,
the closing balance is equal to cash in
hand.

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 Income and expenditure account
• Left side is expenditure and right side is
income and the balance is surplus (we
don’t call it profit) or deficit (we don’t call it
loss).

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 RECEIPT AND EXPENDITURE
ACCOUNT
• Similar to income and expenditure account
• Left side is expenditure (on accruel basis)
and right side is receipt (on cash basis)
and we also provide for outstanding
income – but make a provision for this
also
• Maintained by professionals like doctors,
consultants, architects
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FINAL ACCOUNTS OF FIRMS
• P & L ACCOUNT, BALANCE SHEET,
• After these :
• P & L APPROPRIATION ACCOUNT

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 FINAL ACCOUNTS OF
COMPANIES
• BALANCE SHEET - Part I of Schedule VI
• Profit & loss : Part II of Schedule VI,
•

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 Some requirements …
• Profits have to be declared as per accounting
systems
• Dividends have to be declared after providing for
reserve, last year loss, depreciation, interest,
and other such matters.
• Divident has to be approved by the
shareholders, who can reduce it but cant
increase (from what has been suggested by the
board of directors).

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 PRECAUTIONS…
• Accounts have to be varified to ensure
that that they are true and fair
• They have to be authenticated by the
directors / secretary to ensure that the
accounts are properly verified.

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 About AFTERSCHO☺OL
• PGPSE - World’s most comprehensive
programme on social entrepreneurship –
after class 12th
• Flexible – fast changing to meet the
requirements
• Admission open throughout the year
• Complete support from beginning to the
end – from idea generation to making the
project viable.
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Branches of AFTERSCHO☺OL
• PGPSE programme is open all over the
world as free online programme.
• Those who complete PSPSE have the
freedom to start branches of
AFTERSCHO☺OL
• A few branches have already started -
one such branch is at KOTA (Rajasthan).

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 Workshop on social
entrepreneurship
• We conduct workshop on social
entrepreneurship – all over India and out
of India also - in school, college, club,
association or any such place - just send
us a call and we will come to conduct the
workshop on social entrepreeurship.
• These workshops are great moments of
learning, sharing, and commitments.

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 FREE ONLINE PROGRAMME
• AFTERSCHO☺OL is absolutely free
programme available online – any person can
join it. The programme has four components :
• 1. case studies – writing and analysing – using
latest tools of management
• 2. articles / reports writing & presentation of
them in conferences / seminars
• 3. Study material / books / ebooks / audio / audio
visual material to support the study
• 4. business plan preparation and presentations
of those plans in conferences / seminars

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100% placement / entrepreneurship
• AFTERSCHO☺OL has the record of
100% placement / entrepreneurship till
date
• Be assured of a bright career – if you join
AFTERSCHO☺OL

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 Pursue professional courses along
with PGPSE
• AFTERSCHO☺OL permits you to pursue
distance education based professional /
vocational courses and gives you support
for that also. Many students are doing
CA / CS/ ICWA / CMA / FRM / CFP / CFA
and other courses along with PGPSE.
• Come and join AFTERSCHO☺OL

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