OBjects OF accounting

Step1:finanical information is necessary in order to run a business in an efficient manner.Reliable information will be available only trough keeping proper of accounts.
Step2: proper accounting is essential , if money is to be borrowed for the purpose of business.The lender will only agree to lend money when he is satisfied as to the solvency of the borrower.Information available from books of accounts is the means of measuring such solvency.
step3:cash in hand can verified and any defalcation can be detected ,if proper books of accounts are maintained.
step4: payment of sales tax and income tax is only possibile if bools of accounts are maintained.
step5:In case of any dispute , books of accounts can be produced in the court of law as a documentry evidence.6: Goverment Fixes up fair prices,formulates industrail policy ,prepares economic plans , decides import -export quotas and does many other functions on the basis of accounting information available from the books of accounts

LEDGER For Accounting students

does the journal replace the need For a Ledger?
No the Journal does not replace the ledger.The journal provides a complete listing of the daily transactions of a business.But It does not provide information about a specific account in one place . To know how much cash balance we have, for example the accounting clerk would in one place. To know How much cash balane we have for example the accounting clerk would have to check all the journal entries in which cash involved and this is very labourious job becuse there are hundreds or even thousand of a cash transactions we recorded on different pages of journal.To avoid the diffiulty the debits and credits of journalised transactions are transferred to Ledger accounts.Thus All the changes For a single account are located in one place in a ledger account.This makes it easy to determine the curent balance of any account.
The book in which accounts are maintained , is called Ledger.Generally , one account is opened on each page of this book,but if Transactions relations to a particullar account are numerous ,
it mat extend to more than one page.All transactions relationg to a account are recorded therein chronologically .from journal each transaction is posted to at least two concern account---Debit side of one account , and credit side of another account.Remember That if there two accounts involved in a journal entry.It will be posted to three different accounts in the ledger.This process of transferring information --debit and credit.---From journal to ledger is known as posting.The goal of all transactions is ledger

accounting concepts

separete entity concept:
accounts are kept for entities, as distinguished from the person who are associated with these entities . in recording events in accounting , the importent question is : ''how do these events affect the entity ? how they affect the persons who own , operate , or otherwise are associated with the entity is irrelevant. For example when a person invest Rs 200.000 into business
it will be deemed that the owner has given that money . to the business which will be shown as a liability in the books of the business.in case the owner withdraws RS.170,000
The Concept of separate entity is applicable to all forms of business organazation , Forexample , In case of a sole proprietorship or partnership business Though the sole propritership and patner are not considered as separate entities in the eyes of law , but for accounting purpose they will be considered as separate entities.
Going Concern Concept:
according to this concept it is assumed that an entity is a oing concern ----That it will continue to operate for an indefinite time period there is no intention to liqrate the particular business venture in the foreseeable future.On account of this concept , the accountant while valuin the asset does not take into account the sale value of assets . moreover , he chares deprecation on fixed assets on the basis of their expected life rather than on their markets values.
For example.
suppose that a company has just purchased a three- year insurance policy for Rs45,000 , if we assume that the business will continue in operation

Accounting Complete Details for All Students

acceptance bad debts
accrued income
balanced account
accommodation bill
balance sheet
acceptance for honour
balanceing
accounts clerk
balacing procedure
accounts
bank account
accounts department
bank discount
accumulated depreciation
bank reconciliation statement
accountancy
bank statement
accountant
bearer cheque
accounting
bill
accounting of bill
bill of exchange
accounting period
book-keeping
accounting cyle
book value
account book
business
account holder
business concern
accumulared profit
calls in advance
accumulated entries
called up capital
adjustment
capital
adjustment of receivables
capital accounts
administrative expense
capital expenditures
allowance
capitalised expenditures
allowed discount
capital income
allotment money
capital receipts
amalgamate
carriage
amount of remittance
cash
amount recevable
cash account
article of association
cash book
assets
cash discount
authorised capital
cash in bank
cash in hand
cash memo
cash on hand
cash on hand
cash purchases
cash sale
cash transactions
casting
certificate of incorporation
charges
cheque
classification
closing stock
clossing entries
collection charges
column
commerce
commercial bank
commercial terms
commision
compensating errors
compund entries
consignee
consignor
consignment
consignment account
consignment agreement
contra entry
corresponding entries
counterfoil
credit
credit balance
credit entry
credit institutions
credit purchases
credit sale
credit transaction
creditors
crossed cheque
current account
current assets
current liabilities
custom duty
day book
days of grace
debentures
debit
debit account
debit balance
debit entry
debit side
debtor
deffered expenses
deprecialtion
determination of depreciation
dimishing balance method
discount
discount account
discount allowed
disccounting of bill
discount receivable
dishonour
dishonour of bill
direct expense
dissolution
distribution expense
dividend
double entry
doubtful debts
drawee
drawer
drawing
due date
duty
entry
endorsement
entertainment expense
errors of omission
errors of commision
erorrs of original entries
errors of principle
essentials of bill
execptional expense
Evalution
Excise duty
Extracted
final accounts
financial expense
financial loss
financial position
financial statement
finished goods
firm
fiscal
fixed
fixed assets
fixed capital account
fixed capital method
fixed deposits
fixed insalment method
fixed liabilities
flexible
floating assets
floating liabilities
fluction capital
fluction capital method
folio
foreign bill
forfeture of shares
form of journal
founder shares
freight
foundation
foundamental
general charges
goods
goodwill
goodwill account
gross
gross proceeds of consignment
heads of accounts
hire purchases
llustration
imprest
income
incomporation stage
incure
index
inderect income
indirect expense
industriial
inland bill
irrecoverable debts
insolvent
intanggible
interest
instalment purchases
insurance companies
inventory
invoice
issued capital
issue at a discount
issue at a premium
issue shares at par
joint stock company
journal
journal proper
main ledger
overdraft
patnership
journalise
offer
journalising rules
office equipment
Ledger
Legal charges
Legal position
Liabilities
Limited Liabilities
Liquid assets
List of balance
Loan account
location of company
location of errors
Long patnership
Long term liabilities
Loss
Main Ledger
Memoradum of association
Misellaneous journal
Misecellaneous expense
mortgage
narration
net loss
Net profit
Nominal account
nominal capital
non-trading concerns
objectives
octrori duty
offer
office equipment
Omission of posting
OPening stock
Ordinary Shares
organizatoin
original Capital
original entry
Original record
Outstanding assets
Paid up capital
Particulers
parties to a bill
party sold
partner
partnership
partnership account
patnership act
patner capital account
pass book
patent right
payable expenses
payee
paying-in-slip
payment
personal acount
petty cash book
posting
posting on wrong account
posting on wrong side
preferred shares
preliminary shares
preliminary expenses
premium
pre-paid insurrance
pre-receipts
prescribe form
price list
private limited companies
procedure
proceeds
proforma invoice
profit and loss accouunt
profit and loss approation account
profit and loss sharing ratio
promotion
promoters
prospectus
propritor
proprietorship
provision
public company
purchase
purchase account
purchase journal
Raising of shares
real account
Realization
Realization account
receipt
receipt counter
Rectification
Registered
Relevant Accounts
remuneration
Renewal
rent
Repairs charges
Reserve
Residual Value
Reail business
Retailer
retirement
return
return inward
return outward
Revaluation method
Revaluation of assets
sales account
sale agreement
sale
sales journal
sale return journal
saving account
secret reserves
self-assesment
self balancing ledger
selling and distribution expense
share
share capital
shift
shifting
short partnership
simple final account
sinking fund
sole proprietor
sole trader
specific
stamp duty
statement
stock
straight line method
sub
subscription
subsidiary book
sundry
terms
three column cash book
title
total
trade discount
trading account
trading period
trial balance
transaction
travelling expenses
un-called capital
un-earned income
vertical
voucher
wages
wages payable
winding up
whole sale business
work sheet
written down value.
cheque
goods
investment
accounting cycle
gross total
octri duty

Capital and Revenue profit &Loss All Chapters Details

capital and Revenue profit
Capital Proft:
capital profit is a profit which is earned on the sale of a fixed asset or profit earned on raising capital for a company (by issuing shares at premium).This is not a regular profit of the business and is not earned in the ordinary trade of the buniness .For example if a machinary having book valu of Rs 50,000is sold for 60,000 the profit of the 10,000 will be a capital Profit . In the same way, A joint stock company issues shares of 2,00,000 at a premium of Rs .10.000 to raise capital .such premium of Rs 10.000 Will be a capital Profit.
REVENUE PROFIT:
this is a profit which is earned during the ordinary course of the business E.G profit on sale of goods rent received interest received etc.
CAPITAL AND REVENUE LOSSES
CAPITAL LOSS:
This is a loss suffered by a business on the sale of a fixed asset or it is incurred on raising capital of joint stock company.This is not a recurring loss and is not made in the ordinary course of the business.Forexample A machinary having book value of Rs 50.000 is sold for 45,000 the loss for Rs 5000 is a capital loss in the same way a company issued shares of Rs 1,00,000 At 10% discount the loss of the 10.000 is a capital loss.Capital loss is shown in the balance sheet on the asset side as a fictious asset which is gradually written off out of the profits every year.
REVENUE LOSS:
this is made in the ordinary course or day to day operation of a business such as loss on sale of goods etc.Revenue loss appears in the profit and loss account or income statement in the year in which it occurs.
CAPITAL AND REVENUE PAYMENTS
it may be noted that there is a difference between an expenditure and payment.Expenditure is the full amount spent by a business whether paid or yet to be paid while payment means the amount actully paid.For example A machinary is purchased for Rs 50.000 from saleem & co Rs 30.000 but the payment is Rs 30.000 Only.
CAPITAL PAYMENTS :
This is an amount which is actually paid on account of a capital expenditure.
REVENUE PAYMENTS:
This is an amount which is actully paid on account of some revenue expenditure .for example we purchase goods of Rs 30,000 this is a revenue expenditure of Rs 30,000 .we paid cash to the supplier only Rs 20,000 This is a revenue payment.if the whole amount is paid amount is paid in cash , then both the revenue expenditure as well as revenue payment will be Rs 30.000.

The Basic Information About Accounting Rules Details of Final Accounts Elements of Accounting

OPENING STOCK ALL THESE NOTES ARE RELATED TO DEBITD SIDE
it is unsold of the last year’s purchase. it is available from stock A/c in the ledger and has debit balance in the Trial Balance. It indicates the value Of good lying unsold at the end f last year. Now it will become A part of the current Year’s Purchases. Last Year’s closing stock is current Year’s opening stock Again. Current Year, s Closing stock will be next year, s opening stock .In the case of a newly set up business There cannot however, be any opening stock.
Purchases:
it is the value of all goods purchased in the current accounting year and it is available from purchases A/c in the Ledger .Purchases Return Are deducted From purchases and Net Purchases are shown on the debit side of the Trading account.
Carriage inward:
it means the expenses incurred on bringing purchased goods from the place where they have been purchased, To the shop or go down of the business :It should be Remembered That expenses for sending sold goods to customer ,s shop or house are not recorded in this account. They are debited To carriage outwards A/c an indirect expense which is transferred to profit and loss A/c .carriage inward is transferred to the debit side of the Trading A/c sometime in examination ,Only the word carriage is mentioned .In the That case it should be regarded carriage inward and debited to the Trading A/c.
Wages :
This refers to the Remuneration Paid To the workers For the Loading And unloading of purchased goods or it is the remuneration Paid to the workers who are directly engaged in productive activities .Any how This is an expense which is directly related with salable goods an is always debited the the trading account.
INSURANCE IN TRANSIT:
while bringing goods from outside, they may be destroyed or stolen in transit .south loss may be insured against. The amount of premium paid to the insurance company is debit to the insurance in Transit a/c and is transferred to the debit side of the trading a/c being an expense connected with the purchased of goods.
In this connection , it should be noted that premium paid for insurance of building ,plant machinery furniture stock etc..Against loss by fire or accident is debited To profit and Loss account being and indirect expense.
CUSTOMS DUTY:
The duty imposed by government on import &export of gods is known as customs duty. customs duty is of two types-import duty &export duty .duty paid on goods imported from Abroad is known as import duty and is debited to the Trading A/c but Duty paid on goods exported expense connected with sales, is debited to profit and loss account so import duty on goods purchased from abroad is a direct expense and export duty on goods sold is indirect expense.
CLEARING CHARGES :
in case of imports from abroad goods are cleared from ports. For this port authorities charges something which is called clearing charges. This is a direct expense and is debited To Trading Account.
FREIGHT INWARDS:
charges paid on bringing purchased goods from abroad through steamer, rail or air are known as freight inward. being an expense connected with purchased of goods it is debited to the Trading Account
EXCISE DUTY ON GOODS MANAFACTURED:
duty imposed by the movement on goods manufactured or produced within the country, is called excise duty. This being an expense connected with salable goods or production , is debited to the manufacturing account or trading account as the case maybe.
ROYALTY:
in a word, royalty means rent. A manufacturer has to pay such rent. when he acquires the right to produce an article. For example , amount payable to the owner of patent for the use of patent right ,amount payable to the author of a book an acquiring the right to publish this book tec. it should be noted here that royalty may be based on either production of goods or sale of goods. when the royalty is paid on production.
DOCK CHARGES:
these are the dues imposed on ships and their cargoes when they are unloaded on the port. This is a direct expense and debited to the TRADING ACCOUNT.
COAL ,COKE FUEL ,GAS OIL ,MOTIVE POWER ETC..
these items of expenditure being connected with production of goods (as required to run the plant a machinery) should be debited to the manufacturing Account or the Trading a/c as the case maybe.
OCTORI DUTY:
This is a duty which is imposed by the municipal corporation of the municipal committee when goods purchased enters its territory .so when the goods are purchased from another city, this duty has to be paid. it is an expense connected with purchase of good and is debited to the Trading A/c..
CONSUMEABLE STORES:
These are the expenses incurred to keep the machine in right condition and include engine oil, soft soap cotton waste oil grease and waste consumed in factory .The amount of such stores consumed during he year will be debited to the trading a/c.
MANUFACTURING EXPENSES:
all expenses incurred in manufacturing or producing the goods in a factory insurance, Factory rent , depreciation on factory building ,lighting are direct expense and ar debited to manufacturing ac or Trading a/c as the case maybe.
Now ALL NOTES OF ACCOUNTING WILL BE TREATED AS CREDIT SIDE BALANCE
SALES:
it is the value of all the goods sold during the current accounting year and it is available from the sale a/c in the Ledger .It is a Major source of revenue in a business which deals in goods .Sales return are deducted from sales and the net sales are shown on the credit side of the Trading A/c
STOCK CLOSSING:
it indicates the value of goods lying unsold at the end of the current accounting year. At the End of the year a list of unsold goods is prepared showing the quantity and value of each item. The Total Of the list represents the value of closing stock. The list should be prepared with utmost care and attention .ALTHOUGH closing stock in an asset, yet it is shown on the credit of the trading account.

Types of Accounts Accounts Names Details in Accounting

Types of Accounts
furniture Account drawings account capital account cash account sales account person account x &co account bank account purchase a/c electric fitting account air-condition account service ind account bank a/c printing charges account stationary account carriage account wages account rent account salaries account debtors account creditors account
building account machinery account bills receivable accounts bill payable accounts debtors accounts creditors accounts cash account Discount account commission account Repairs accounts insurance account