Introduction to financial accounts (for beginners)

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Transcript of Introduction to financial accounts (for beginners)

  • INTRODUCTION TO FINANCIAL ACCOUNTS
  • THREE GOLDEN RULES OF ACCOUNTANCY Personal Account Real Account Nominal Account Examples As A/c, Loan A/c, capital A/c, drawings A/c, Debtors A/c, Creditors A/c Assests A/c, cash A/c, stock A/c, Bank A/c Expenses A/c, Incomes A/c, Losses A/c, Gains A/c DEBIT The receiver What comes in Expenses A/c, Losses A/c CREDIT The giver What goes out Incomes A/c, Gains A/c
  • Ledger Machinery purchased for cash Rs 4000/ JOURNAL ENTRY- Machinery A/c ..Dr 4000 To cash A/c 4000 Dr MACHINAERY A/C Cr TO CASH A/C 4000 Dr CASH A/C Cr TO MACHINERY A/C 4000
  • BANK RECONCILIATION STATEMENT BALANCE AS PER CASH BOOK (given) Do as per pass book ADD LESS Cheque issued but not yet presented(payment) Cheque collected but not cleared by bank Cheque received recorded twice on receipt side of cash book Cheque dishonored Bank credited income/ customer directly deposited in our A/c Bank debited expenses not recorded in cashbook Cheque received (and cleared by bank) was wrongly recorded on credit side of cashbook
  • Rule of thumb Favorable Balance- (Given) Balance As Per Cashbook- Do As per Passbook Unfavorable Balance- (Given) Balance As Per Cashbook- Do As per Cashbook Common Period- Find Uncommon Items Uncommon Period Find Common Items