Accounts assignment.pptx
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The document discusses accounting concepts such as single and double entry systems, classification of accounts, and rules of debit and credit. It provides examples of different types of accounts including personal, real, and nominal accounts. It also demonstrates journal entries for various business transactions including starting a business, purchases, sales, expenses, and payments.
Accounts assignment.pptx
- 1. Accounts Three Golden Rules of Accounting
- 2. Systems of Accounting • Single entry system : Only personal accounts and cash account are maintained • Double entry system : Double entry system of accounting adheres to the rule that for each transaction the debit amount must equal to the credit amount
- 3. Advantages of Double entry system • Keeps complete record. • Check on arithmetical errors. • Check on accounting errors. • Tells the financial position at a point of time. • Comparison of current year with previous years .
- 4. Classification of accounts and rules of debit and credit based on such classification ( in double entry system)
- 6. Personal Accounts • Accounts recording transactions related to firms, individuals or companies .
- 7. • Natural person’s personal account: Individuals accounts Examples: Ram’s Account, Rohit’s Account • Artificial person’s personal account : Accounts of banks ,limited companies , firms , institutions and clubs Examples : M/s Sahu & Sahu or S B I Theog account • Representative Personal accounts : Income & expenses payable to an Individual or receivable from an individual on a particular date ( for matching of accounts ) Example : Interest Prepaid Account or Rent paid in advance account.
- 8. Real accounts The accounts recording transactions related to assets are called real accounts
- 9. • Tangible real accounts : Which can be seen or touched Example : Cash account , Building account or Furniture account • Intangible real accounts : Which can not be seen or touched Example : Goodwill account , patents & copyrights
- 10. Nominal accounts The accounts recording transactions relating to the losses , gains , expenses and incomes. Example : Rent account , Salaries account or Interest account
- 11. Rules of Debit and Credit • Personal Accounts: Debit the receiver Credit the giver • Real accounts : Debit what comes in Credit what goes out • Nominal accounts : Debit all expenses and losses Credit all the incomes and gains
- 12. Journalising The process of recording the transactions into journal is called Journalising
- 13. Journal Date Particulars L.F. Amount Dr Cr
- 14. Steps of journalising • Ascertain What accounts are involved in a transaction . • Ascertain what is the nature of accounts involved . • Ascertain which rule of debit and credit is applicable . • Ascertain which account is to be debited or which is to be credited . • Record the entry in the journal. • Draw a line below the entry to separate it from another entry.
- 15. Illustration 1
- 16. • 1 Mohan started business with cash Rs70000.00 • 2 Purchased goods on credit from Sohan Rs 14000.00 • 3 Paid wages Rs 500.00 • 4 Paid to Sohan Rs 10000.00 • 5 Purchased furniture Rs 1000.00 • 6 Received commission Rs 100.00
- 17. Mohan started business with cash Rs70000.00 • Accounts involved • 1) Capital A/c 2) Cash a/c • Nature of accounts involved • 1) Personal A/c 2) Real A/c • Rules of debit and credit • 1) Credit : the giver • 2)Debit : what comes in
- 18. Journal entry Date Particulars L.F. Amount Dr Cr (1) Cash A/c Dr. To Capital A/c ( Being business started with Rs 70000.00) 70000.00 70000.00
- 19. Purchased goods on credit from Sohan Rs 14000.00 • Accounts involved • 1) Goods A/c 2) Sohan’s A/c • Nature of accounts involved • 1) Real A/c 2) Personal A/c • Rules of debit and credit • 1)Debit : what comes in • 2) Credit : the giver
- 20. Journal entry Date Particulars L.F. Amount Dr Cr (2) Goods A/c Dr. To Sohan’s A/c ( Being goods purchased from Sohan worth Rs 14000.00) 14000.00 14000.00
- 21. Paid wages Rs 500.00 • Accounts involved • 1)Cash A/c 2) Wages A/c • Nature of accounts involved • 1) Real A/c 2) Nominal A/c • Rules of debit and credit • 1)Credit : what goes out • 2) Debit : All the expenses & losses
- 22. Journal entry Date Particulars L.F. Amount Dr Cr (3) Wages A/c Dr. To Cash A/c ( Being wages paid worth Rs 500.00) 500.00 500.00
- 23. Paid to Sohan Rs 10000.00 • Accounts involved • 1)Cash A/c 2) Sohan’s A/c • Nature of accounts involved • 1) Real A/c 2) Personal A/c • Rules of debit and credit • 1)Credit : what goes out • 2) Debit : the receiver
- 24. Journal entry Date Particulars L.F. Amount Dr Cr (2) Sohan’s A/c Dr. To Cash A/c ( Being cash paid to Sohan) 10000.00 10000.00
- 25. Purchased furniture Rs 1000.00 • Accounts involved • 1)Cash A/c 2) Furniture A/c • Nature of accounts involved • 1) Real A/c 2) Real A/c • Rules of debit and credit • 1)Credit : what goes out • 2) Debit : what comes in
- 26. Journal entry Date Particulars L.F. Amount Dr Cr (2) Furniture A/c Dr. To Cash A/c ( Being furniture purchased) 1000.00 1000.00
- 27. Received commission Rs 100.00 • Accounts involved • 1)Cash A/c 2) Commission A/c • Nature of accounts involved • 1) Real A/c 2) Nominal A/c • Rules of debit and credit • 1) Debit : what comes in • 2) Credit : All the incomes & gains
- 28. Journal entry Date Particulars L.F. Amount Dr Cr (2) Cash A/c Dr. To Commission A/c ( Being commission received ) 100.00 100.00
- 29. Illustration 2
- 30. • 1 Started business with cash Rs10000.00 • 2 Paid into bank Rs 5000.00 • 3 Bought furniture Rs 900.00 • 4 Purchased goods from Mohan & Co. for cash Rs 4000.00 • 5 Sold goods Rs 1700.00 • 6 Paid telephone rent Rs 400.00 • 7 Purchased goods from Bir & Co. Rs 1000.00 • 8 Paid for advertisement by cheque Rs 160.00 • 9 Bought typewriter from Universal Typewriter Rs 750.00
- 31. • 10 Sold goods for Bedi & Co. Rs 2900.00 • 11 withdrew from bank for private use Rs 350.00 • 12 Sold goods to Omega & co. for cashRs 650.00 • 13 Received cash from Bedi & Co. Rs 2900.00 • 14 Deposited in bank Rs 2500.00 • 15 Rent paid by cheque Rs 500.00 • 16 Paid salaries Rs 600.00 • 17 Issued cheque in favour of Bir & co Rs 1000.00
- 32. Solution
- 33. Entry no Account involved Nature of accounts Rules 1 Cash Real What Comes in Debit Capital Personal The Giver Credit 2 Bank Personal The Receiver Debit Cash Real What goes out Credit 3 Furniture Real What Comes in Debit Cash Real What goes out Credit 4 Purchase ( goods) Real What Comes in Debit Cash Real What goes out Credit 5 Cash Real What Comes in Debit Sales (goods) Real What goes out Credit 6 Telephone rent Nominal Expennses and losses Debit Cash Real What goes out Credit 7 Purchase ( goods) Real What Comes in Debit Bir & Co Personal The Giver Credit 8 Advertisement exp. Nominal Expennses and losses Debit Bank Personal The Giver Credit
- 34. Entry no Account involved Nature of accounts Rules 9 Office equipment Nominal Expennses and losses Debit Universal Co. Personal The Giver Credit 10 Bedi & Co Personal The Receiver Debit Sales (goods) Real What goes out Credit 11 Drawings Personal The Receiver Debit Bank Personal The Giver Credit 12 Cash Real What Comes in Debit Sales (goods) Real What goes out Credit 13 Cash Real What Comes in Debit Bedi & Co Personal The Giver Credit 14 Bank Personal The Receiver Debit Cash Real What goes out Credit 15 Rent Nominal Expennses and losses Debit Bank Personal The Giver Credit 16 Salaries Nominal Expennses and losses Debit Cash Personal The Giver Credit 17 Bir & Co Personal The Receiver Debit Bank Personal The Giver Credit
- 35. Date Particulars L.F. Amount Dr Cr 1 Cash A/c Dr 10000 To Capital A/c 10000 ( Started business) 2 Bank A/c Dr 5000 To Cash A/c 5000 ( Deposited Cash in bank) 3 Furniture A/c Dr 900 To Cash A/c 900 4 Purchase A/c Dr 4000 To Cash A/c 4000 ( Goods purchased) 5 Cash A/c Dr 1700 To Sales A/c 1700 ( Furniture purchased) 6 Telephone rent A/c Dr 400 To Cash A/c 400 ( Telephone rent paid )
- 36. Date Particulars L.F. Amount Dr Cr 7 Purchase A/c Dr 1000 To Bir & Co 1000 ( Goods purchased ) 8 Advertisement exp. A/c Dr 160 To Bank A/c 160 (Advertisement expenses Paid) 9 Office equipment A/c Dr 750 To Universal Co. 750 ( Typewriter purchased) 10 Bedi & Co Dr 2900 To Sales A/c 2900 ( Goods Sold) 11 Drawings A/c Dr 350 To Bank A/c 350 ( Withdrawal from bank for private use) 12 Cash A/c Dr 650 To Sales (goods) 650 ( Goods Sold)
- 37. Date Particulars L.F. Amount Dr Cr 13 Cash A/c Dr 2900 To Bedi & Co 2900 (cash received from Bedi & Co) 14 Bank A/c Dr 2500 To Cash 2500 ( Cash deposited in bank) 15 Rent A/c Dr 500 To Bank 500 ( Rent Paid) 16 Salaries A/c Dr 600 To Cash 600 ( Salaries Paid) 17 Bir & Co Dr 1000 To Bank A/c 1000 (Bir & Co Account settled )