Account1

Indexes 

1. Shortcuts of Tally 

Definition of accounting:

The art of recording, classifying 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 results there of.

 Book keeping:

 It is mainly concerned with recording of financial data relating to the business operations in a significant and orderly manner.

Concepts of accounting:

A. Separate entity concept

B. Going concern concept

C. Money measurement concept

D. Cost concept

E. Dual aspect concept

F. Accounting period concept

G. Periodic matching of costs and revenue concept

H. Realization concept.

 Conventions of accounting:

A. Conservatism

B. Full disclosure

C. Consistency

D. Materiality

 Systems of book keeping:

A. single entry system

B. double entry system

6. Systems of accounting:

A. Cash system accounting

B. Mercantile system of accounting.

7. Principles of accounting:

A. Personal a/c: Debit the receiver

Credit the giver

B. Real a/c: Debit what comes in

Credit what goes out

C. Nominal a/c: Debit all expenses and losses

Credit all gains and incomes

 Meaning of journal:

Journal means chronological

record of transactions.

Meaning of ledger:

Ledger is a set of accounts. It contains all accounts of the business enterprise whether

real, nominal, personal.

 Posting:

 It means transferring the debit and credit items from the journal to their respective accounts in the ledger.

Trial balance:

Trial balance is a statement containing the various ledger balances on a particular

date.

Credit note:

The customer when returns the goods get credit for the value of the goods returned. A credit note is sent to him intimating that his a/c has been credited with the value of the goods returned.

Debit note:

 When the goods are returned to the supplier, a debit note is sent to him indicating that his a/c

has been debited with the amount mentioned in the debit note.

Contra entry:

 Which accounting entry is recorded on both the debit and credit side of the cashbook is known as the contra entry.

Petty cash book:

 Petty cash is maintained by business to record petty cash expenses of the business, such as postage, cartage, stationery, etc.

Promisory note:

An instrument in writing containing an unconditional undertaking signed by the maker, to pay certain sum of money only to or to the order of a certain person or to the barer of the instrument.