Published on April 26, 2014
Book keeping accounting
Transaction • There are two aspects of a transaction: Transaction Debit credit (Dr.) (Cr.)
Types of accounts • There are three types of A/C’s personal real nominal individuals assets income & exp.
Rules of classification of Dr./Cr. personal a/c: Dr. the receiver Cr. The giver Real a/c: Dr. what comes in Cr. What goes out Nominal a/c: Dr. all expenses & losses Cr. All incomes & gains
Book keeping process 1 Transactions are classified and a voucher is passed with Dr. & Cr. Heads. 2 The voucher is recorded in the books of prime entry. (cash book, pur. Book, sales book, journal) 3 posting into genral ledger. 4 trial balance 5 Trading & profit & loss a/c. (all the nominal a/c’s are taken in P&l a/c) 6 balance sheet ( all the real and personal a/c’s are taken in B/S)
Example: journal 1. Cash introduced by x as capital Cash a/c Dr. 20000 To capital a/c 20000 ( being cash introduced) 2. Purchased goods worth 15000 out of which 5000 was paid to x as cash & remaining 10000 on credit. Purchases a/c Dr. 15000 To cash a/c 5000 To Mr. x a/c 10000 ( being goods purchased)
3. Sold goods purchased for a sum of 19000. out of which 4000 was received as cash & 15000 sale were given on credit. Cash a/c Dr. 4000 Y a/c Dr. 15000 To sales 19000 ( being goods sold) 4. Paid rent of shop 2000. Rent a/c Dr. 2000 To cash a/c 2000 (being rent paid)
5. Purchase furniture worth Rs. 3000 Furniture a/c Dr. 3000 To cash 3000 (Being furniture purchased)
Ledger a/c’s Cash a/c To capital a/c 20000 By purchases a/c 5000 To sales a/c 4000 By rent a/c 2000 By furniture a/c 3000 By balance c/d 14000 24000 24000
To balance c/d 20000 By cash 20000 20000 20000 Purchase a/c To cash 5000 By balance c/d 15000 To x 10000 15000 15000 Sales a/c By cash 4000 capital a/c To balance c/d 19000 By y 15000 19000 19000
Mr. x To balance c/d 10000 By purchases 10000 10000 10000 Mr. y To sales 15000 By balance c/d 15000 15000 15000 Rent a/c To cash 2000 By balance C/d 2000 2000 2000 Furniture a/c To cash 3000 By balance c/d 3000 3000 3000
Trial balance Trial balance Dr. Cr. Cash a/c 14000 Capital a/c 20000 Purchases a/c 15000 Sales a/c 19000 Mr. x a/c 10000 Mr. y a/c 15000 Rent a/c 2000 Furniture a/c 3000 49000 49000
Profit and loss a/c P&l a/c To purchases 15000 By sales 19000 To rent 2000 To profit (transfer to capital a/c) 2000 19000 19000
Balance sheet B/S liabilities assets Capital a/c 20000 Cash a/c 14000 + profit 2000 22000 Mr. y (debtor) 15000 Mr. x (creditor) 10000 furniture 3000 32000 32000
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