Scribd
Upload
1K views7 pages

Basics of Accounting - Bridge Course

Accounting is the process of recording, classifying, and summarizing financial transactions and interpreting the results. It involves three main steps: 1. Recording transactions in journals in chronological order with details of what, when, and how much. 2. Classifying recorded transactions into ledger accounts organized by type such as assets, liabilities, equity, income, and expenses. 3. Summarizing account balances and preparing financial statements such as the trial balance and final accounts to report on a company's financial results and position.

Uploaded by

bikshapati
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
1K views7 pages

Basics of Accounting - Bridge Course

Accounting is the process of recording, classifying, and summarizing financial transactions and interpreting the results. It involves three main steps: 1. Recording transactions in journals in chronological order with details of what, when, and how much. 2. Classifying recorded transactions into ledger accounts organized by type such as assets, liabilities, equity, income, and expenses. 3. Summarizing account balances and preparing financial statements such as the trial balance and final accounts to report on a company's financial results and position.

Uploaded by

bikshapati
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 7

INTRODUCTION TO BASICS OF ACCOUNTING

WHAT IS ACCOUNTING
IT IS THE PROCESS OF IDENTIFYING, MEASURING AND COMMUNICATING INFORMATION TO PERMIT JUDGEMENT AND DECISION BY USERS DEFINITION:AIPCA
IT IS THE ART OF RECORDING,CLASSIFYING AND SUMMARISING 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 RESULTS THEREOF.

STEPS IN FINANCIAL INFORMATION

Creation of financial information involves three steps: 1. Recording: Journal: The systematic record of transactions in chronological order is made in a book called Journal. Questions to be addressed: What to record? When to record? How to record ? What value to record?

2. Classifying:

After recording monetary transactions in the Journal book, next step is to classify the recorded information into related groups to put information in compact and usable form. The book containing classified information is called LEDGER. 3.Summarizing:After balancing of the ledger book, account balances are listed. Statement giving the names of these accounts and their balances is called TRAIL BALANCE. On the basis of trail balance, summaries are prepared to give useful information about the financial results during a time period and the financial position at a point of time. Reporting of summaries of the business transactions is done in the form of financial statements which are known as FINAL ACCOUNTS.

CLASSIFICATION OF ACCOUNTS
IT IS OF THREE TYPES: PERSONAL ACCOUNTS NATURAL PERSON ARTIFICIAL PERSON GROUPS RULE : DEBIT = THE RECEIVER CREDIT = THE GIVER REAL ACCOUNTS RULE : DEBIT = WHAT COMES IN? CREDIT = WHAT GOES OUT? NOMINAL ACCOUNTS RULE : DEBIT = ALL EXPENSES AND LOSSES CREDIT = ALL INCOMES AND GAINS

JOURNALISE THE FOLLOWING TRANSACTIONS * Mr. X brought Capital into business of following:
Cash = 10,00,000 Machinery = 50,00,000 Land = 25,00,000 * Purchased goods : 150000 * Purchased goods from Mr.Y : 1,00,000 * Purchased goods from Mr.Z for cash : 5,00,000 * Purchased goods for cash : 50,000 * Sold goods : 2,00,000 * Sold goods to Mr. A : 1,50,000 * Sold goods to Mr.B for cash : 6,00,000 * Sold goods for cash : 1,00,000 * Purchase returns to Y : 5,000 * Sales returns from A : 10,000 * Cash deposited into bank : 10,00,000

Cash paid to Y : 1,00,000 Andhra bank cheque issued to Y : 50,000 Cash received from A : 50,000 Andhra Bank cheque received from A : 1,00,000 Salaries paid : 50,000 Depreciation on Machinery : 10,000 Rent received : 25,000 Insurance paid by cheque : 3,000 Printing and stationary paid by cheque : 10,000 Furniture purchased : 10,000 Almarah purchased for office use by cheque : 5,000

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy