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Welcome Back! 😄In my last post I have taught you about Final Accounts right! 😀Well you must remember 🤔we prepare final account from trial balance and till now we only deal with closing stock as an adjustment. In this lesson I'm going to teach you how to deal with adjustment entries in final accounts.

INTRODUCTION After Recording , Posting into ledgers and preparing trial balance our Last step of Accounting Process is to prepare Final Account. One of the main objectives of maintaining accounts is to find out the Profit or loss made by the business during a period and to ascertain the financial position of the business as on a given date. The Trading account, Profit and loss account and balance sheet prepared by the businessman at the end of the trading period are called “Final Accounts”.

Hey! Till now, In cash book lesson, we learned about simple cash book, double column cash book and triple column cash book , today I’m going to teach you how to prepare petty cash book using imprest system?

Hey! Everyone. 😀Till now we have learned how to prepare simple cash book and double column cash book with Discount and cash column. Right! 😄Well we can record only cash transactions in these cash books but what if our business is engaged with bank 🏦as well, so instead of preparing separate bank account we can just include it in our cash book itself which is called Triple column cash book.

Welcome back! Last time we learned to prepare simple cash book , today I’ m going to teach you about Double column cash book. WHAT IS DOUBLE COLUMN CASH BOOK? This cash book is an extension of Simple cash book. Under this method an additional column is provided both on debit side and credit side for recording discount allowed and discount received. It is also called as Two column cash book.

WHAT IS A CASH BOOK? Cash book is a book of prime entry, because all cash transactions are recorded in the Cash book. It is also a Book of Final entry

When business transactions are very few, there is only ☝️one journal, wherein all the business transactions are recorded.✍  But what if the business is at large scale and there are large number of transactions?🤔

What is a Trial balance? After ledger posting, the next step of the accounting process is to prepare Trial Balance. Well to put it in simple, “A Trial balance is a statement containing balances of all ledger accounts as at any given date, arranged in a form of debit and credit columns placed side by side and prepared with the object of checking the arithmetical accuracy of ledger postings ”. The fundamental principle of the double-entry system of book-keeping is that “every debit has a corresponding credit and vice-versa of equal amount”. DEBIT BALANCE = CREDIT BALANCE Features of trial balance The following are the features of trial balance: 1. It is not an account; it is only a statement which is prepared to verify the arithmetical accuracy of ledger accounts. 2. It contains debit and credit balances of ledger account. 3. It is prepared on a particular date generally at the end of the business year. 4. Trial balance helps in preparing final accounts. 5. As it is pr...

Welcome back! Here I am as promised to teach you regarding posting compound entries into ledger. Well I will just use the same transactions which I explained in the lesson How to record compound journal entries? Part – 1 and Part – 2 .

HEY! Every one. It has been a long time since my last post. Well, last time I posted an article regarding How to post transactions into ledger? Part – 1 in which I gave an example for self ledger and general ledger, remember right! Ok in this article I will explain you how to post transactions into ledger for creditor’s and debtors.

WHAT IS LEDGER POSTING? After all the transactions are journalized , the entries in the journal are transferred to the appropriate accounts in the ledger to know the exact position of each account on any particular date. Ledger is the most important book among the books being maintained by business firm. It is also called “Book of final entry”.

What is an Opening Entry? With the beginning of a new accounting period, every businessman has to write and keep a new set of books for business accounts. The accounts not closed in the previous accounting period are recorded in a new set of books with an entry called ‘ opening entry ’. In opening entry, all the asset accounts are debited and liabilities accounts are credited. Assets are those which is going to benefit the firm in future as well, and liabilities are those which is liable to pay in future. The difference between the asset and liabilities is to be credited as a capital account. Now let me give you one example for your understanding! EXAMPLE PROBLEM: Rama had the following assets and liabilities on 1st April 2016. cash in hand Rs 800, cash at bank Rs 15,600, stock Rs 15,000, furniture Rs 9,600, plant and machinery Rs 30,000 debtors Rs 8,000, creditors Rs 8,000, bill payable Rs 5,000. Pass the necessary opening entry. Solution : Note : cash in hand, cash...

Hey! Welcome back! This is the continue lesson of how to pass compound journal entries Part 2 15. Purchased goods from Desai worth Rs 20,000, trade Discount 10%, cash Discount 5%. Cash paid immediately.

What is a Compound journal entry? Whenever two or more transaction of the same nature (i.e. transactions where either the account to be debited or the account to be credited is common) take place on the same date a composite/ compound/ combined journal entry may be passed for them instead of passing separate journal entry for each of them.

WHAT IS JOURNAL? “ JOURNAL ” Means a daybook or daily record. It is the book wherein all the transaction first recorded in chronological order. (Date wise). It is also known as “ the book of prime entry”. The process of recording transactions in the journal is termed as “ Journalizing ”.

INTRODUCTION TO ACCOUNTING WHAT IS ACCOUNTING? Accounting is the process of identifying, measuring and communicating the economic/financial information of an organization for decision-making to its users. According to the American Institute of Certificated Public Accountant (AICPA) “ Accounting is the art of recording, classifying, analyzing and summarizing in a significant manner and in terms of money transactions and events which are in part at least, of a financial character and interpreting the result thereof.” PRINCIPLES OF ACCOUNTING Accounting statements disclose the profitability and solvency of the business to various parties like proprietors, investors, creditors, government and many more. It is, therefore, necessary that such statements should be prepared according to some standard language and set rules. These rules are generally called Generally Accepted Accounting Principles (GAAP). GAAP may be defined as those rules of actions or conduct, which are derived fro...