Finance - It is one of the module in every organization. It is the heart of every business without this no one can't run their business successfully. It is mainly used for calculate the finance position of the company as well as maintain the each finance record of organization.
Book Keeping - Record the finance transaction
It is the recording of financial transactions. Those transactions include sales, purchase, income and payment by an individual or organization. Booking is usually performed by a book keeper.
Accounting - It is the art of recording, classifying and summarizing in a significant manner and in terms of money, transaction and events. Which are in part at least of finance character and interpreting the result there of
Recording Classify Summary
Purchase by John PO Expenses
Sales by Muthu SO Revenue
Cash paid by Arun PO Expenses
G/L Accounts - General Ledger
An account refers to Assets, Liabilities,Income,Expenses ans Equity as represents by individual ledger pages in which changes in values are chronologically recorded with debited and credited entries.
Types of G/L Account
Income - What are we earn that are all come under Income. Ex - Sales, Interest, Dividend and etc..,
Expenses - What are we spends that are all come under Expenses. Ex - Food, Clothe, House and etc..,
Assets - Add's to one's income or In future strengthening one's financial position . Ex - Invest in Gold/Silver Real estate and etc..,
Liabilities - Obligation to pay. Ex - Personal Loan, Credit, Education loan and etc..,
Capital - Amount or Assets which is invested in business by businessman or Owner of business.
Dual(Double) Entry System : Each transaction will be recorded twice i.e with the two transaction being called Debit - Left side and Credit - Right.
In finance we have the set of rules for double entries system. Those are all comes under the followings,
Debit Credit
Income - +
Expenses + -
Assets + -
Liabilities - +
Equity - +
OR
GAAP-> General Accepted Accounting Principles.
Personal Account(Person,Bank and etc..,).
Debit - Receiver
Credit - Giver
Real Account(Assets).
Debit - What comes in
Credit - What goes out
Nominal account(Profit and Loss(P/L)).
Debit - All expenses and loses
Credit - Gain and Income
Journal - It is a type of dairy. Where the day to day transactions are entered.
Ex - Salary A/C Dr Rs. 100
To Cash A/C Cr Rs. 100
Ledger - A ledger contains summarized financial information that is classified by assignment to a specific account number.
Ex - Cash account summary for a month.
Trail Balance - A trail balance is a list of all accounts contained in the ledger of a business. This list will contain the name of the ledger account and the value of nominal ledger account. Here Debit will come debit side Credit will come credit side.
Purpose - Check accuracy of the account.
Trading Account - The purpose of preparing trading account is to calculate the gross profit at the business.
Include all the direct expenses
Gross profit = Sales - Cost of goods sold
Profit and Loss(P/L A/C) Account - Net profit is a resultant of all the indirect expenses deductions from the gross profit.
Profit - It is a excess of incomes over expenses in a specific period.
Loss - Loss is the excess of expenses over income in a specific period.
Net profit = Gross profit - Indirect expenses
Balance Sheets - It is the statement where we can see the financial position of the organization. This includes all assets, Liabilities and equities.
Assets = Equities + Liabilities
Examples
Ledger
Withdraw cash from by bank 50,000
Cash A/c Dr 50,000
By Band A/c Cr 50,000
Purchase goods by cash 10,000
Purchase A/c Dr 10,000
By Cash A/c Cr 10,000
Paid rent by cash 5,000
Rend A/c Dr 5,000
By Cash A/c Cr 5,000
Paid salary by cash 25,000
Salary A/c Dr 25,000
By Cash A/c Cr 25,000
Sold goods by cash 30,000
Cash A/c Dr 30,000
By Sales revenue A/c Cr 30,000
Deposited balance at bank 40,000
Bank A/c Dr 40,000
By Cash A/c 40,000
G/L Account
Cash
Particular Dr Particular Cr
Bank 50,000 Purchase 10,000
Sales Revenue 30,000 Rent 5,000
Salary 25,000
Bank 40,000
Total 80,000 80,000
Bank
Particular Dr Particular Cr
Cash 40,000 Cash 50,000
Balance 10,000
Total 50,000 50,000
Purchase
Particular Dr Particular Cr
Cash 10,000 Balance C/F 10,000
Total 10,000 10,000
Rent
Particular Dr Particular Cr
Cash 5,000 Balance C/F 5,000
Total 5,000 5,000
Salary
Particular Dr Particular Cr
Cash 25,000 Balance C/F 25,000
Total 25,000 25,000
Sales Revenue
Particular Dr Particular Cr
Balance C/F 30,000 Cash 30,000
Total 30,000 30,000
Trial Balance :
Particular Dr Cr
Cash Nill Nill
Bank 10,000 10,000
Purchase 10,000
Rent 5,000
Salary 25,000
Sales Revenue 30,000
Total 40,000 40,000
Book Keeping - Record the finance transaction
It is the recording of financial transactions. Those transactions include sales, purchase, income and payment by an individual or organization. Booking is usually performed by a book keeper.
Accounting - It is the art of recording, classifying and summarizing in a significant manner and in terms of money, transaction and events. Which are in part at least of finance character and interpreting the result there of
Recording Classify Summary
Purchase by John PO Expenses
Sales by Muthu SO Revenue
Cash paid by Arun PO Expenses
G/L Accounts - General Ledger
An account refers to Assets, Liabilities,Income,Expenses ans Equity as represents by individual ledger pages in which changes in values are chronologically recorded with debited and credited entries.
Types of G/L Account
Income - What are we earn that are all come under Income. Ex - Sales, Interest, Dividend and etc..,
Expenses - What are we spends that are all come under Expenses. Ex - Food, Clothe, House and etc..,
Assets - Add's to one's income or In future strengthening one's financial position . Ex - Invest in Gold/Silver Real estate and etc..,
Liabilities - Obligation to pay. Ex - Personal Loan, Credit, Education loan and etc..,
Capital - Amount or Assets which is invested in business by businessman or Owner of business.
Dual(Double) Entry System : Each transaction will be recorded twice i.e with the two transaction being called Debit - Left side and Credit - Right.
In finance we have the set of rules for double entries system. Those are all comes under the followings,
Debit Credit
Income - +
Expenses + -
Assets + -
Liabilities - +
Equity - +
OR
GAAP-> General Accepted Accounting Principles.
Personal Account(Person,Bank and etc..,).
Debit - Receiver
Credit - Giver
Real Account(Assets).
Debit - What comes in
Credit - What goes out
Nominal account(Profit and Loss(P/L)).
Debit - All expenses and loses
Credit - Gain and Income
Journal - It is a type of dairy. Where the day to day transactions are entered.
Ex - Salary A/C Dr Rs. 100
To Cash A/C Cr Rs. 100
Ledger - A ledger contains summarized financial information that is classified by assignment to a specific account number.
Ex - Cash account summary for a month.
Trail Balance - A trail balance is a list of all accounts contained in the ledger of a business. This list will contain the name of the ledger account and the value of nominal ledger account. Here Debit will come debit side Credit will come credit side.
Purpose - Check accuracy of the account.
Trading Account - The purpose of preparing trading account is to calculate the gross profit at the business.
Include all the direct expenses
Gross profit = Sales - Cost of goods sold
Profit and Loss(P/L A/C) Account - Net profit is a resultant of all the indirect expenses deductions from the gross profit.
Profit - It is a excess of incomes over expenses in a specific period.
Loss - Loss is the excess of expenses over income in a specific period.
Net profit = Gross profit - Indirect expenses
Balance Sheets - It is the statement where we can see the financial position of the organization. This includes all assets, Liabilities and equities.
Assets = Equities + Liabilities
Examples
Ledger
Withdraw cash from by bank 50,000
Cash A/c Dr 50,000
By Band A/c Cr 50,000
Purchase goods by cash 10,000
Purchase A/c Dr 10,000
By Cash A/c Cr 10,000
Paid rent by cash 5,000
Rend A/c Dr 5,000
By Cash A/c Cr 5,000
Paid salary by cash 25,000
Salary A/c Dr 25,000
By Cash A/c Cr 25,000
Sold goods by cash 30,000
Cash A/c Dr 30,000
By Sales revenue A/c Cr 30,000
Deposited balance at bank 40,000
Bank A/c Dr 40,000
By Cash A/c 40,000
G/L Account
Cash
Particular Dr Particular Cr
Bank 50,000 Purchase 10,000
Sales Revenue 30,000 Rent 5,000
Salary 25,000
Bank 40,000
Total 80,000 80,000
Bank
Particular Dr Particular Cr
Cash 40,000 Cash 50,000
Balance 10,000
Total 50,000 50,000
Purchase
Particular Dr Particular Cr
Cash 10,000 Balance C/F 10,000
Total 10,000 10,000
Rent
Particular Dr Particular Cr
Cash 5,000 Balance C/F 5,000
Total 5,000 5,000
Salary
Particular Dr Particular Cr
Cash 25,000 Balance C/F 25,000
Total 25,000 25,000
Sales Revenue
Particular Dr Particular Cr
Balance C/F 30,000 Cash 30,000
Total 30,000 30,000
Trial Balance :
Particular Dr Cr
Cash Nill Nill
Bank 10,000 10,000
Purchase 10,000
Rent 5,000
Salary 25,000
Sales Revenue 30,000
Total 40,000 40,000
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