BASIC OF ACCOUNTING
TYPES OF ACCOUNT
PERSONAL ACCOUNT REAL ACCOUNT NOMINAL ACCOUNT
Account dealing with an individual or accounts of corporate bodies or Institutions. Which are recognized as person in business dealings. E.g. Customers, Creditors, Debtors, Owner, Owner, Bank, Firm, Capital etc.
These accounts relates to things that can be touched, felt, measured, etc. It could be fixed or current in nature. E.g. Cash, Building, Furniture.
They represent things which cannot be touched but they can be measured in terms of money. E.g. Patents, Goodwill Accounts.
It deals with expenses and loses income and gains. These accounts are opened in the book to simply explain the nature of the transactions For E.g. –Lighting, Insurance, Dividends etc.
RULES OF DEBIT & CREDIT
1. Personal Account:-
Debit the Receiver
Credit the Giver
2. Impersonal Account
Debit what comes in
Credit what goes out
Debit all expenses and losses
Credit all incomes and gain
IMPORTANT DEFINITIONS & TERMS
Assets- Anything which will enable to a business enterprise to get cash or a benefit in future is asset.
Fixed Assets- Assets that are acquired for relatively long period for carrying on the business of the enterprise and not meant for resale. E.g. - Land, Building, Plant, Machinery etc.
Current Assets: - Assets, Which are held essentially for a short period and are meant for converting in to cash. They are expected to get converted in to cash with in one operating cycle of business. E.g.-Cash, Inventories, Debtors, Bill Receivable etc.
Liquid Assets:-Asset, which are immediately convertible in to cash without much less. For e.g.-Marketable securities, Stamp etc.
Liabilities: - It is the amount, which a business owes and has to return on account or the amount payable by a business is known as liabilities. For e.g. - Loan from bank, Trade creditors.
Capital: - It refers to the amount invested by the proprietor in a business enterprise. It is an owner’s Account For e.g. - A personal account.
Expenses: - It denotes the cost of services and things used for generating revenue. Expenses are different from loss. An expense is supposed to bring some benefit to the firm, whereas a loss brings no benefit to the firm, for e.g. - Payment made to employee – Salary, Wages, Carriage Inward and Outward.
Creditor- Any person who gives credit is a creditor or A creditor is a person to whom an amount is due or payable. He has to receive money from us.
Drawings-Cash or goods taken by the owner of the business for his personal use. E.g. Owner takes money from the business for the payment of his children & school fees then is a drawing. Drawings reduce the capital at the credit of the owner.
Wages: - Remuneration paid to the laborers in the factory.
Salary: - Remuneration paid to the employee in the administrative building.
STOCK OR GOODS ACCOUNT
Goods comes in (DR)
Goods goes out (CR)
Sales Returns Purchases Returns A/C
INTRODUCTION OF TALLY
Bharat Goenka a managing director was the man to bring tally in work.
6.3 Security base
7.2 Internet base
(Recently used by everyone)
Tally bronze- Accounting (5000/-)
Tally Silver – Accounting (5k) 1 pc End Loss = 15 k.
Tally Golden – Man (45 k)
Tally Diamond – Wan (95k)
Silver – S.U = M.U
10,800 + 4 Vat
MAN- Metropolitan Area Network
WAN- Wide Area Network...
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