Account Notes

Director: Mr.
Bharat Mehta
Your Account Notes

Day What is Account: Recording Business Transaction in a Systematic Manner so that we can find out our business profit or loss and our financial position. Business: To Carry on any activity on a regular basis to earn Profit. Systematic Manner: Presenting information in a meaningful order so that it is easy to read, understand and analyzed. Business Profit or Loss: Profit earned from business activities not from outside sources. Financial Position: Capital Balance, Cash in hand, Dues, Loan Balance, Bank Balance, Assets Position What is Included in Activities: Sale-Purchase, Receipt-Payment, Profit-Loss Different Parties Involved in Business: OwnersDebtorsCreditorsBanksProprietor or Partner or Share Holder To Whom Goods are sold From Whom Goods are purchased From Where we take Loan or Make Our Cheque Transaction. -1
What an Accountant Do: Maintain books of Accounts in a proper manner so that we can find our debtor or creditors, capital of the owner, cash in hand and profit or loss of the firm till date.
BHARAT Computers & Coaching 1-Ram Nagar, Tehsil Camp, Panipat, 0180-4000955 09896400955
Director: Mr. Bharat Mehta
Scope of Account: Book Writing, Balancing Ledgers, Find out Cash in hand, make a correct Trial Balance, Prepare Trading and Profit & Loss Account to ascertain the Profit or loss and at last finalizing the Balance Sheet. Terms mostly used in Book Keeping: Assets Liabilities Sale Purchase Expenses Income : : : : : : Machinery, Building, Furniture, Cash, Bank Balance Creditors, Capital, Loan Sale of Material, Sale of Finished Goods Purchase of Material, Purchase of Finished Goods Rent, Salary, Wages, Telephone Exps, etc. Commission, Rent Recd., Interest Recd. Assets
Fixed Assets
Machinery Land & Building Furniture Car, Scooter Instruments
Current Assets
Cash Stock in hand Advances Debtors Bank Balance
Fixed Assets are those assets, which are purchased to run the business smoothly and remain fixed for a business. There is no sale or purchase of these items on a regular basis. Current Assets are those assets that are by their nature can be converted into cash with in a year or from those cash can be generated in a short period. Liabilities
Capital
Term Liabilities
Secured Loans Unsecured Loans
Current Liabilities
Creditors Expenses Payable
Day -2 Capital : Amount Deposit From Owner side. Capital = All Assets External Liabilities
For Example suppose that the following balance appeared in the books of a firm: Cash Debtors 20000/40000/Machinery 50000/Creditors 30000/Stock 100000/-
Capital = All Assets External Liabilities All Assets = Cash+ Machinery+ Stock+ = 20000+ 50000+ 100000+ = 210000/External Liabilities = Creditors = 30000/Capital = 210000- 30000 = 180000/Term Loan :
Debtors 40000
Loan can be Short Term or Long Term. Short Term : For Less Than One year & this is called Current Liab. Long Term : For More Than One year Loan Can be Secured or Unsecured. Secured Loans : Against Security of Property, etc. Unsecured Loans: Without Security Current Liabilities: Liabilities that are to be paid with in a year i.e. payment to be made to Creditors, Payment to be made to workers, Rent payable, etc. Conclusion : From the above we can find out the conclusion that: Capital = All Assets Or All Assets = Capital + Or External Liab.= All Assets External Liab. External Liab. Capital.
Nature of Assets And Liabilities: All the Assets have Debit Balances All the Liabilities have Credit Balance All the Expense Should be Debited All the Incomes Should be Credited If Assets Increase If Assets Decrease If Liabilities Increase If Liabilities Decrease Example: Furniture Purchased Construction of Building Cycle Sold Car Sold Goods Purchased Sale Made Rent Expenses Salary Expenses Commission Recd. Interest Recd. Rent Due, but not Paid Salary Due, but not Paid Balance Sheet: It is easier to understand the nature of assets and liabilities if we understand a Balance sheet Performa. A simple balance sheet is as:Balance Sheet Liabilities Capital Creditors Amount 180000 30000 Assets Cash Machinery Stock Debtors Total Amount 20000 50000 100000 40000 : : : : : : : : : : : : Furniture A/c Debit Building A/c Debit Cycle A/c Credit Car A/c Credit Purchase A/c Debit Sale A/c - Credit Rent A/c Debit Salary A/c Debit Commission Credit Interest Recd. A/c Credit Rent Payable Credit Salary Payable - Credit : : : : It Should be Debited It Should be Credited It Should be Credited It Should be Debited
Total 210000
210000
Example
1. Cash 75000 2. Gopal Started business with Rs. 75000 as Capital Assets = Liabilities = 0 + + + + + + + + + + + + + + + + + + + + + + + + Capital 75000 Capital 75000 75000 Capital 75000 75000 Capital 75000 0 75000 Capital 75000 3000 78000 Capital 78000 +3000 81000 Capital 81000 -1000 80000
Gopal purchased furniture for Cash for Rs. 5000 Assets = Liabilities Cash + Furniture = 0 -5000 + 5000 70000 + 5000 = 0 3. Goods purchased for Cash for Rs. 20000 Assets = Cash + Furniture + Stock = 70000 + 5000 + 0 -20000 + 0 + 20000 = 50000 + 5000 + 20000 = 4. Liabilities 0 0
Gopal purchased goods on credit for Rs. 16000 Assets = Liabilities Cash + Furniture + Stock = Creditor 50000 + 5000 + 20000 = 0 0 + 0 + 16000 = +16000 50000 + 5000 + 36000 = 16000 5. Goods costing of Rs. 12000 sold for Rs. 15000 Assets = Liabilities Cash + Furniture + Stock = Creditor 50000 + 5000 + 36000 = 16000 +15000 + -12000 = 0 65000 + 5000 + 24000 = 16000 6. Goods costing of Rs. 12000 sold on Credit to Ram for Rs. 15000 Assets = Liabilities Cash + Furniture + Stock + Debtors = Creditor 65000 + 5000 + 24000 = 16000 0 + 0 + -12000 + 15000 = 0 65000 + 5000 + 12000 + 15000 = 16000 7. Paid for 1000 for Rent Assets Cash + Furniture + Stock 65000 + 5000 + 12000 -1000 + 0 + 0 64000 + 5000 + 12000 Liabilities Capital Creditors = Liabilities Debtors = Creditor 15000 = 16000 0 = 0 15000 = 16000 Balance Sheet Assets Cash Furniture Stock Debtors Total
+ + + +
Amount 80000 16000
Amount 64000 5000 12000 15000 96000
Total
96000
For 1. 2. 3. 4. 5. 6. 7. 8. 9.
Home Work Mukesh started business with Cash. Purchased goods for Cash. Purchased goods on Credit. Purchased furniture for Cash Rent Paid Commission Recd. Withdraw Cash for personal use Sold goods on credit (Cost Rs. 30000) Paid to Creditors 80000 28000 20000 6000 2000 500 3000 40000 15000
Q2. 1. 2. 3. 4. Started business with cash Rs. 50000 and goods Rs. 20000. brought goods for cash Rs. 15000 and on credit Rs. 10000 goods costing Rs. 24000 sold at a profit of 25%. Half of the payment received in cash. purchased furniture for office use Rs. 6000 and for household use Rs. 4000. Increase Increase Increase Decrease Increase Increase Decrease Increase Increase Increase Increase Decrease Decrease 50000 20000 70000 15000 25000 10000 24000 6000 15000 15000 6000 10000 4000
Hint. 1. Cash Stock Capital 2. Cash Stock Creditor (Liab.) Stock Capital (Profit) Cash Debtors Furniture Cash Capital
3.
4.
Last Balances Cash Stock Debtors Furniture 40000 21000 15000 6000 Creditors Capital Total 82000 Total 10000 72000 82000
Q3. If the capital of a business is Rs. 100000 and liabilities are Rs. 60000. calculate total assets of the business. Q4. If total assets of a business are Rs. 200000 and capital is Rs. 150000. calculate creditors. Q5. A commenced business on 1st Jan. 1998 with a capital of Rs. 100000. On 31st Dec. 1998 his assets were worth Rs. 160000 and liabilities Rs. 15000. find out his capital on 31 st Dec. 1998 and profit earned by him. Q6. Calculate closing capital and total assets if: Capital on 1st Jan. 200000 Income for the year 120000 Expenses for the year 70000 Drawings 5000 Creditors at the end 60000 Q7. Fill in the Blanks Capital Opening _______ 1. 2. 3. 4. 5. Answer 1. 2. 3. 4. 5. 82000 17000 25000 15000 65000
Addition Drawings Profit in Capital _______ _______ _____ 10000 15000 20000 ? 10000 8000 12000 ? 20000 15000 30000 ? 12000 8000 0
Loss _____ 0 0 0 0
Closing Capital ______ ? 80000 87000 73000
50000 60000 80000 70000 ?
6000 54000
Types of Account: There are three types of accounts. 1. Personal Account 2. Real Account 3. Nominal Account
Personal Account:
These includes all accounts of personal nature i.e. Ram Account, Sham Account, Harish Account, etc. Rule1. Debit the Receiver Credit the Giver Example: 1. 2. 3. Ram Gives Rs. 1000 Rams Account Credit
Paid Rs. 1000 to Hari Rams Account Credit Received Rs. 500 From Mohan Mohans Account Credit
Real Account:
This Includes the properties of the firm i.e. Cash, Furniture, Machinery, Building, etc. Rule2. Debit Credit Example: 1. 2. Furniture Purchased for Rs. 1000 in cash Furniture Account Debit Machinery Sold for Rs. 1000
What Comes in What Goes Out
Machinery Account
Credit
Nominal Account :
This includes all expenses and income accounts. Rule3. Debit Credit Example 1. 2. 3. 4. Rent Paid Rs. 1000 Rent Account Debit All the Expenses and Losses All the Incomes and Profits
Salary Paid Rs. 1000 Salary Debit Commission Received Rs. 1000 Commission Account Credit Interest Received Rs. 1000 Interest Account Credit
Home Work: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Received from Raju Paid to Rajan Paid to Salim Recd. From Sonu Machinery Purchased Machinery Sold Car Purchased Car Sold Rent Paid Salary Paid Commission Recd Interest Recd. Account Account Account Account Account Account Account Account Account Account Account Account Debit/ Credit Debit/ Credit Debit/ Credit Debit/ Credit Debit/ Credit Debit/ Credit Debit/ Credit Debit/ Credit Debit/ Credit Debit/ Credit Debit/ Credit Debit/ Credit
Use of All Rules There can be use of a single rule in any transaction Or there may be use of any two rules in some transaction. It is called as Journal Entry Example 1. Cash Received From Mohan Cash Account Real Account Mohan Account Personal Account 2. Cash Paid to Gopal Gopal Account Cash Account Personal Account Real Account
Debit Credit Debit Credit Debit Credit Debit Credit
3.
Machinery Purchased Machinery Account Real Account Cash Account Real Account Salary Paid Salary Account Cash Account Nominal Account Real Account
4.
Some More Examples 1. Ram Started Business with Cash Cash Account Real A/c Rams Capital A/c Personal A/c Purchased Goods for Cash Purchase A/c or Goods A/c Cash Account Real A/c Real A/c Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
2.
3.
Purchased Goods from Subhash on credit Purchase A/c Real A/c Subhash A/c Personal A/c Purchased Furniture for Cash Furniture A/c Real A/c Cash A/c Real A/c Sold Goods for Cash Cash A/c Sale A/c Sold Goods to Mahesh Real A/c Nominal A/c
4.
5.
6.
Mahesh A/c Sale A/c 7. Paid Cash to Subhash Subhash A/c Cash A/c
Personal A/c Nominal A/c Personal A/c Real A/c
Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Debit
8.
Received Cash From Mahesh Cash A/c Real A/c Mahesh A/c Personal A/c Purchased goods from Ravi for Cash Purchase A/c Real A/c Cash A/c Real A/c Purchased goods from Ravi Purchase A/c Ravi A/c Real A/c Personal A/c
9.
10.
11.
Sold Goods to Suresh For Cash Cash A/c Real A/c Sale A/c Nominal A/c Sold Goods to Suresh Suresh A/c Sale A/c Personal A/c Nominal A/c
12.
13.
Purchase Machinery For Cash Machinery A/c Real A/c Cash A/c Real A/c Withdraw Cash for Personal use Rams Capital A/c (Debit) Personal A/c Cash A/c Real A/c Rent Paid Rent A/c Cash A/c Wages Paid Wages A/c Cash A/c Paid Salary to Gopal Salary A/c Cash A/c Received Commission Cash A/c Nominal A/c Real A/c Nominal A/c Real A/c Nominal A/c Real A/c Real A/c
14.
15.
16.
17.
18.
Commission A/c
Nominal A/c
Credit
List Price: The Price that is written on the product. Note: No entry has been passed for the list price. Trade Discount: Discount allowed at the time of bargaining (Sale/ Purchase) Note: No entry has been passed for the trade discount. Cost Price: List Price Trade Discount Note: Entry has been passed for this amount only. Cash Discount (Ignore Personal A/c Rules) Discount allowed at the time of payment. Cash Discount Received Cash Discount Given Q. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. Ram Started business with cash Rs. 80000, Goods Rs. 40000 Furniture Rs. 20000. Sold goods to nandal of the list price of Rs. 20000 after giving him trade discount of Rs. 2000. Nandal returned the goods list price of Rs. 4000. Received from nandal in full settlement RS. 14150. Purchase goods from brij mohan of the list price of Rs. 10000 at 15% trade discount. Returned goods to brij mohan of the list price of Rs. 1000. Settled the account of brij mohan by paying cash after deducted cash discount of 4%. Purchased goods from anil Rs. 5000 Purchased goods from sunil Rs. 10000 Paid cash to anil Rs. 1900 and discount received Rs. 100. Paid Rs. 9800 to sunil in full settlement. Brought table fan for Rs. 1200. Brought table fan for Rs. 1200 for rams house. Sold goods for cash of the list price of rs. 8000 at 10% trade discount and 3% cash discount. Paid rent Rs. 800.
Income Loss
Credit Debit
16. 17.
Answer: 1.
Paid office exps Rs. 700. Paid traveling exps Rs. 380.
Debit Debit Debit Credit Debit Credit Debit Credit Debit Debit Credit Debit Credit Debit Credit Debit Credit Credit Debit Credit Debit Credit Debit Credit Credit Debit Credit Credit Debit Credit Debit Credit Debit Debit Credit Debit Credit Debit Credit Debit Credit 80000 40000 20000 140000 18000 18000 3600 3600 14150 250 14400 8500 8500 850 850 7650 7344 306 5000 5000 10000 10000 2000 1900 100 10000 9800 200 1200 1200 1200 1200 6984 216 7200 800 800 700 700 380 380
Cash A/c Purchase A/c Furniture A/c Rams Capital A/c Nandal A/c Sale A/c Sale Return A/c Nandal A/c Cash A/c Discount Nandal A/c Purchase A/c Brij Mohan Brij Mohan Purchase Return Brij Mohan Cash A/c Discount Purchase A/c Anil A/c Purchase A/c Sunil A/c Anil Cash A/c Discount Sunil A/ Sunil A/c Cash A/c Discount Table Fan Cash A/c Capital A/c Cash A/c Cash A/c Discount A/c Sale A/c Rent A/c Cash A/c Office Exps Cash A/c Traveling Exps Cash A/c
2. 3. 4.
5. 6. 7.
8. 9. 10.
11.
12. 13. 14.
15. 16. 17.

Recording Of Banking Transaction: 1. When cash is deposited into the bank Bank A/c Cash A/c 2. Debit Credit
When cash is withdrawn from bank Cash A/c Bank A/c Debit Credit
3.
When Cheque recd. And deposited into bank. Bank A/c Customers A/c Debit Credit
4.
When Cheque is Dishonored Customers A/c Bank A/c Debit Credit
5.
When Cheque is given to any Party Partys A/c Bank A/c Debit Credit
6.
Bank Given Interest Bank A/c Interest A/c Debit Credit
7.
Bank Charge Interest Interest Bank A/c Debit Credit
8.
Bank Charges taken by bank Bank Charges A/c Bank A/c Debit Credit
9.
When cash is withdrawn for personal use. Drawings A/c Bank A/c Debit Credit
10.
When Expenses is directly paid by cheque. Expenses A/c Bank A/c Debit Credit
Bad Debts: If any customer become insolvent and it is not possible to recover the balance amount from him, we can say it bad debtor or Bad debt. It is a loss to the firm.

Bad Debt A/c Customers A/c Q1. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Vishal Started business with cash Rs. 20000, Stock Rs. 40000, Furniture Rs. 3600. Cash Deposited into bank Rs. 5000. Sale made to X for Rs. 6000. Sale made to Y for Rs. 8000. Sale made to Z for Rs. 10000. Bank Loan Taken for Rs. 10000. Cash Withdraw from Bank 10000. Purchase from Ajay Rs. 5000. Purchase from Vijay Rs. 7500. Paid Expenses Rs. 5000. Debit Credit
Next Year: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. Bought goods from kailash for Rs. 20000 at a trade discount of 10% and cash discount of 2%. Paid 60% amount immediately. Sold Goods to X for Rs. 9000/Received Rs. 14800 from X in full settlement of his account. Cash deposited into bank Rs. 10000. Cheque Recd. From Y for Rs. 7850 in full settlement of his account and deposited into bank. Received a cheque from Z Rs. 2000. Cheque received from Y dishonoured. Cash sale Rs. 15000; out of this amount Rs 12000 deposited into bank. Amount due to Ajay paid by cheque. Old newspapers sold Rs. 50. Old furniture sold Rs. 750. Purchase goods from Gopal and paid by cheque Rs. 8000. Sold half of the above goods to Chanderkant at a profit of 30% on cost. Proprietor withdraws for private use Rs. 2000 from office and Rs. 3000 from bank. Paid salary to Motilal by cheque Rs. 2000. Paid rent by cheque Rs. 1500. Paid trade expenses Rs. 500.
Answer: 1. Cash Purchase Furniture Capital Bank A/c Cash A/c Xs A/c Sale A/c Ys A/c Sale A/c Zs A/c Sale A/c Bank A/c Bank Loan A/c Cash A/c Bank A/c Purchase A/c Ajays A/c Purchase A/c Vijays A/c Expenses A/c Cash A/c Debit Debit Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit 20000 40000 3600 63600 5000 5000 6000 6000 8000 8000 10000 10000 10000 10000 10000 10000 5000 5000 7500 7500 5000 5000
2. 3. 4. 5. 6. 7. 8. 9. 10.
Next Year 1. Purchase A/c Cash A/c Discount A/c Kailash A/c Xs A/c Sale A/c Cash A/c Discount A/c Xs A/c Bank A/c Cash A/c Bank A/c Discount A/c Ys A/c Debit Credit Credit Credit Debit Credit Debit Debit Credit Debit Credit Debit Debit Credit 18000 10584 216 7200 9000 9000 14800 200 15000 10000 10000 7850 150 8000
2. 3.
4. 5.

6. 7. Bank A/c Zs A/c Ys A/c Bank A/c Discount A/c Cash A/c Sale A/c Bank A/c Cash A/c Ajays A/c Bank A/c Cash A/c Miscc. Recpt. A/c Cash A/c Furniture A/c Purchase A/c Gopals A/c Gopals A/c Bank A/c Chanderkants A/c Sale A/c Drawings A/c Cash A/c Bank A/c Salary A/c Bank A/c Rent A/c Bank A/c Debit Credit Debit Credit Credit Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Credit Debit Credit Debit Credit 2000 2000 8000 7850 150 15000 15000 12000 12000 5000 5000 50 50 750 750 8000 8000 8000 8000 5200 5200 5000 2000 3000 2000 2000 1500 1500 500 500
8. 9. 10. 11. 12. 13. 14. 15. 16.
17. 18. 19.
Trade Expenses A/c Debit Cash A/c Credit
Outstanding Expenses Expenses Incurred but not yet paid. Entry: Expenses A/c Exps. Outstanding A/c Salary to Mr. Ram not yet Paid Salary Expenses A/c Salary Outstanding A/c Rent Due but not yet paid Debit Credit Nominal A/c Liability Debit Credit

Rent Expenses A/c Rent Outstanding A/c Entry for Cash Book: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. Debit Credit
Ram started business with cash Rs. 350000. Cash deposit into Bank Rs. 150000. Purchased goods for Rs. 15000 in cash. Purchased goods for Rs. 20000 in cash. Purchased goods for Rs. 25000 in cash and paid 10% sale tax. Purchased goods for Rs. 18000 in cash and paid 12% sale tax. Purchased goods for Rs. 11000 in cash (Including 10% sale tax) Capital Addition for Rs. 50000. Purchased goods for Rs. 15000 from Ali. Purchased goods for Rs. 20000 from Roshan. Purchased goods from Suraj for Rs. 10000 (10% sale tax extra.) Paid for Freight Rs. 100. Purchased goods from Ahmed for Rs. 20000 ( 4% sale tax extra.) Purchased goods from Radha for Rs. 22400 (including 12% sale tax) Sale made for Rs. 20000 in cash. Sale made for Rs. 15000 in cash. Sale made for Rs. 12000 to Rohit. Sale made for Rs. 22000 to Rajesh. Sale made for Rs. 180000 in cash to raja and 10% sale tax taken extra. Sale made for Rs. 2200 to raja (Including 10% sale tax) Paid to Ali Rs. 14800 in cash in full settlement. Paid to Roshan full amount by Cheque. Paid to Suraj by cheque after deducting Rs. 200 as discount. Paid to Ahmed Rs. 10000 in cash. Paid to Radha Rs. 22000 in full settlement by cheque. Cheque Recd from Rohit. Cheque Recd from Rajesh for Rs. 21500 in full settlement. Cash recd from Raja Rs. 2200. Rent Paid Rs. 5000 by cheque. Salary Paid by cash Rs. 12000.
31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48. 49. 50.
Telephone Bill paid by cheque for Rs. 1000. Electricity bill paid for Rs. 800 in cash. Commission Recd. Rs. 1500 in cash. Job work expenses Rs. 8000 by cheque. Manufacturing Exps paid in cash Rs. 5000. Wages paid in cash Rs. 25400. Cash withdraw from Bank Rs. 4000. Furniture Purchased for Rs. 8000 from Roshan & Co. Paid Cheque to Roshan & Co. for Rs. 7800 in full settlement. Sold goods to nandlal of the list price of Rs. 20000 at a trade discount of 10%. Nandal Returned goods of the list price of Rs. 4000. Recd. From nandlal Rs. 14150 by cheque in full settlement. Purchased furniture in cash for Rs. 2000 for personal use. Purchased furniture by cheque for Rs. 5400 for office use from Sagar & Sons. Paid for Insurance exps for Stock Rs. 1550. Machinery Purchased for RS. 50000 and paid Rs. 2000 for freight. Income tax Paid Rs. 5000 by cheque. Sale tax deposit in cash to Government A/c Bank Charges Rs. 50 and Bank interest Recd. Rs. 100. Withdraw for Personal use Rs. 15000 in cash.
51. 52. 53. 54. 55. 56. 57. 58. 59. 60. 61. 62. 63. 64. 65. 66. 67. 68. 69. 70. 71. 72. 73. 74. 75. 76. 77. 78. 79. 80.
Paid Rent of Rs.500. Paid for Entertainment Exp Rs.200. Paid for Printing Rs. 150. Paid for Advertisement Exps Rs.300. Purchased goods for Rs.4000 and sale tax Extra Rs.400. Sale Goods to Raja for Rs.25000 and sale tax 10% extra. Purchased from Ali goods worth Rs.25000 and sale tax 12% extra. Purchased goods from Roshan Rs. 15000. Capital addition Rs.15000. Traveling Exps. Paid by Cheque Rs.500. Paid Freight Rs.400. Cash deposit Rs.15000. Cash Received from Lata Rs.18000. Cheque Received from Bhawna Rs.15000. Sale to Rohit Rs. 15000 and 10%sale tax extra. Sale made to Raja for 30000 and 10% sale tax extra. Purchase made from Roshan for Rs.20000 and 10%sale tax extra. Purchased from Ahmed Rs. 20000 and 5% sale tax extra. Purchased from Ahmed Rs. 25000 and 10%sale tax extra. Purchased from Radha Rs. 15000 and 12% sale tax extra. Sale made to Raja for Rs. 50000 and 5% sale tax extra. Sale made to Raja for Rs. 20000 and 10% sale tax extra. Paid Rent of Rs.500. Paid for Entertainment Exp Rs.25. Paid for Printing Rs.20. Paid for advertisement Exps Rs.400. Paid for Freight Rs.150. Cash deposit into bank Rs.10000. Cheque Recd. From Raja for Rs.10000. Cheque Paid to Roshan for Rs.15000.
81. 82. 83. 84. 85. 86. 87. 88. 89. 90. 91. 92. 93. 94. 95. 96. 97. 98. 99. 100.
Freight Cash Paid Rs. 1000. Paid Rent of Rs. 500. Paid for Entertainment Exps. Rs. 250. Paid for Printing Rs. 100. Paid for Advertisement Exps. Rs. 500. Paid for Freight Rs. 130. Cash deposit into bank Rs. 1000. Cheque Recd. From Raja for Rs. 1500. Cheque Paid to Roshan for Rs. 500. Freight Cash Paid Rs. 1000. Cash withdraw from bank Rs. 5000. Paid Rent of Rs. 500. Paid for Entertainment Exp. Rs. 240 Paid for Printing Rs. 200. Paid for Advertisement Exps. Rs. 4000. Paid for Freight Rs. 450. Cash deposit into bank Rs. 10000. Cheque Recd. From Raja for Rs. 500. Cheque Paid to Roshan for Rs. 450. Freight Cash Paid Rs. 100.
101. 102. 103. 104. 105. 106. 107. 108. 109. 110. 111. 112. 113. 114. 115. 116. 117. 118. 119. 120. 121. 122. 123. 124. 125. 126. 127. 128. 129. 130.
Paid Salary of Rs.500. Paid for Entertainment Exp Rs.280. Paid for Printing Rs. 250. Paid for Advertisement Exps Rs.500. Purchased goods for Rs.8000 and sale tax Extra Rs.400. Sale Goods to Raja for Rs.5000 and sale tax 10% extra. Purchased from Ali goods worth Rs. 1000 and sale tax 12% extra. Purchased goods from Roshan Rs. 1500. Capital addition Rs.25000. Traveling Exps. Paid by Cheque Rs.1500. Paid Cartage Rs.200.jjn Cash deposit Rs.5000. Cash Received from Lata Rs.15000. Cheque Received from Bhawna Rs.25000. Sale to Rohit Rs. 50000 and 10%sale tax extra. Sale made to Raja for 20000 and 10% sale tax extra. Purchase made from Roshan for Rs.10000 and 10%sale tax extra. Purchased from Ahmed Rs. 10000 and 5% sale tax extra. Purchased from Ahmed Rs. 5000 and 10%sale tax extra. Purchased from Radha Rs. 15000 and 12% sale tax extra. Sale made to Raja for Rs. 15000 and 5% sale tax extra. Sale made to Raja for Rs. 2000 and 10% sale tax extra. Paid Rent of Rs.500. Paid for Entertainment Exp Rs.250. Paid for Printing Rs.280. Paid for advertisement Exps Rs.4000. Paid for Cartage Rs.150. Cash deposit into bank Rs.10000. Cheque Recd. From Raja for Rs.1000. Cheque Paid to Roshan for Rs.1500.
131. 132. 133. 134. 135. 136. 137. 138. 139. 140. 141. 142. 143. 144. 145. 146. 147. 148. 149. 150.
Freight Cash Paid Rs. 1000. Paid Rent of Rs. 500. Paid for Entertainment Exps. Rs. 550. Paid for Printing Rs. 120. Paid for Advertisement Exps. Rs. 1500. Paid for Freight Rs. 830. Cash deposit into bank Rs. 5000. Cheque Recd. From Raja for Rs. 2500. Cheque Paid to Roshan for Rs. 500. Freight Cash Paid Rs. 100. Cash withdraw from bank Rs. 5000. Paid Rent of Rs. 500. Paid for Entertainment Exp. Rs. 740 Paid for Printing Rs. 230. Paid for Advertisement Exps. Rs. 1200. Paid for Cartage Rs. 50. Cash deposit into bank Rs. 10000. Cheque Recd. From Raja for Rs. 5000. Cheque Paid to Roshan for Rs. 4500. Cartage Cash Paid Rs. 100.

Accountant does:First : making all entries in the case book Posting all entries in the Ledger Balancing all Ledgers Find out Cash in hand Tallied all Accounts Bank Reconciliation making summary of all the account i.e. Trial Balance Making Trading Account Ascertain Profit of the Firm by making Profit & Loss A/c Making Balance Sheet of the Firm.
Second: Third : Fourth : Fifth Sixth : :
Seventh Eighth : Ninth : Tenth :
Trial Balance:
Making summary of all ledger A/cs Performa:Sr.No. Particulars 01 02 03 04 05 05 06 Capital Machinery Land & Building Alis Account Ahmed Account Cash in hand Bank Balance 10 L.F.No. 01 02 03 04 05 2500000 50000.00 15000.00 ----------Total: 115000.00 -----------------------115000.00 ------------15000.00 10000.00 15000.00 Debit Credit 100000.00
Sale Tax under Haryana General Sale Tax Act Or VAT under Value added Tax Act, 2003
There may be different types of sale in a unit like Sale tax-free, Sale Tax-paid, Sale Taxable4%, Sale Taxable 8%, etc. We can classify all of them in thee broad categories: 1. 2. 3. Taxable Sale Taxfree Sale Exempted Sale
Further sale can be made with in state or out of state. With in Haryana simply called as Out of Haryana simply called as Local Sale C.S.T. Sale
-----------------------------------------------------------------------------------------------------------In this way Purchase can be Classified in three more ways:1. 2. 3. Taxable Purchase Taxfree Purchase Exempted Purchase
Further Purchase can also be made with in state or out of state. With in Haryana simply called as Out of Haryana simply called as Local Purchase C.S.T. Purchase
Registration of Dealer: Every businessman who wants to deal in taxable items and his expected sale for a year will exceed Rs. 500000.00, he is required to registered under VAT Act, 2003. Further if a businessman deals in taxable item and he wants to made any sale out of Haryana, he is liable for registration under VAT, nevertheless his sale doesnt exceed Rs. 500000.00. Documents Required for Registration in case of Proprietorship Unit: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. Application Form Court Fees Stamp for Registration Fees One Photo of Prop. 2 Sureties (Gurantor-Who had already registered under VAT) One photo of each sureties. Sureties Bond Statement of Fact. Address proof of Prop i.e. Ration Card Identity proof of Prop. i.e Voter Card Map of the Site Rent Deed if Rented Property. Registry copy if Owned Property. Affidavit. Power of Attorney. PAN of the Proprietor. First Import bill. Stamps of the Firm Books of Accounts.
Documents Required for Registration in case of Proprietorship Unit: 1. 2. 3. 4. 5. 6. Application Form Court Fees Stamp for Registration Fees One Photo of each Partner. 2 Sureties (Gurantor-Who had already registered under VAT) One photo of each sureties. Sureties Bond

7. Statement of Fact.
8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.
Address proof of each Partners i.e. Ration Card Identity proof of each Partners. i.e Voter Card Map of the Site Rent Deed if Rented Property. Registry copy if Owned Property. Affidavit. Power of Attorney. PAN of the Partners. PAN of the Firm First Import bill. Stamps of the Firm Books of Accounts. Partnership Deed
Sale Tax Return This return is submitted mandatory by every Register dealer with in a period of 30 days from the end of the each quarter. In this return every register dealer has to give details of sale and purchase (bill-wise and date wise), his total tax details i.e. whether tax is payable or refundable. If it is payable it should be paid before filing of sale tax return. With this return one has to attach some annexure (the details of which is given in next page) and proof of tax deposit. Three are 4 returns in nos is to be submitted by every register dealer in a complete year. Financial year Our financial year starts from 1st day of April to 31st March every year. Quarter As the financial year contains 12 months, there are four quarters. From 1st April to 30th June From 1 July to 30 Sept. From 1st Oct. to 31st Dec.
st th
I Quarter II Quarter III Quarter

From 1st Jan. to 31st March IV Quarter
Annexure Under VAT (Local Sale & Purchase):

For Sale: There are different types of list of sale that is to be made out by registered dealer according to their sale picture:Sr.No. Description 01 02 03 04 05 06 07 08 09 10 Sale outside the State (Of goods purchased outside the state) Sale in the course of inter-State trade Sale in the course of import into India Sale in the course of export out of India Sale of exempted goods in the State Sale of goods UNICEF,UNTAB,WHO,other prescribed UN bodies foreign missionLS-5 Value of goods sent for sale to local agents(VAT dealers) Value of goods exported out of State(Consignment transfers) Value of goods disposed of otherwise than by sale Value of taxable goods LS-6 LS-7 LS-8 LS-9 List LS-1 LS-2 LS-3 LS-4
For Purchase: There are different types of list of Purchase that is to be made out by registered dealer according to their Purchase picture:Sr.No. Description 01 02 03 04 05 06 07 Purchased outside the State(for sale outside) Purchased in the course of export out of India Purchased in the course of inter State trade Purchased in the course of import into India imported into State Received for sale from dealers regd.under VAT (1) Purchased from VAT dealers on tax invoice (2) Other purchase in the State List LP-1 LP-2 LP-3 LP-4 LP-5 LP-6 LP-7
Central Sale Tax (CST)

This is the tax, which is levied for sale made out of Haryana i.e from one state to other state. If one register dealer purchase from another register dealer goods out of state he is liable to pay tax at the rates mentioned in the Act, but if the register dealer making the purchase produce C form to the selling register dealer then he is only liable to pay concessional sale tax normally 4%. Return for the same is to be given on Form-I. Sale Tax Adjustment: Sale Tax Payable if [Sale Tax on Local Sale + Sale Tax on Central Sale] > Sale tax paid on Local Purchases Sale Tax Refundable if [Sale Tax on Local Sale + Sale Tax on Central Sale] < Sale tax paid on Local Purchases Sale tax is to be deposited through Challan, Demand Draft or Pay Order in the name of Assessing Authority . Further one has to attach a Challan Form also for the same. Note: 1. There is no adjustment regarding tax paid on purchases made out of state till 31st March, 2005. 2. If one is not interest to take the refund immediately, he can carried forward the refund amount in the next quarter and adjust the same against the tax payable for any succeeding quarter/ quarters. 3. There is no refund regarding the tax paid on fixed assets. We can only make the adjustment regarding the sale tax paid on some specific assets which is require for the manufacturing of goods like machinery, Gen. Set. 4. There is penalty for not filing the sale tax return within time. 5. There is a penalty as well as Interest for not depositing the tax payable with in due time.
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Director: Mr.

Your Account Notes

Director: Mr. Bharat Mehta

Director: Mr. Bharat Mehta

Director: Mr. Bharat Mehta

Director: Mr. Bharat Mehta

Amount 80000 16000

Amount 64000 5000 12000 15000 96000

Director: Mr. Bharat Mehta

Director: Mr. Bharat Mehta

Director: Mr. Bharat Mehta

Closing Capital ______ ? 80000 87000 73000

50000 60000 80000 70000 ?

Director: Mr. Bharat Mehta

What Comes in What Goes Out

Director: Mr. Bharat Mehta

Director: Mr. Bharat Mehta

Debit Credit Debit Credit Debit Credit Debit Credit

Director: Mr. Bharat Mehta

Personal A/c Nominal A/c Personal A/c Real A/c

Director: Mr. Bharat Mehta

Director: Mr. Bharat Mehta

12. 13. 14.

15. 16. 17.

Director: Mr. Bharat Mehta

When Cheque is Dishonored Customers A/c Bank A/c Debit Credit

Bank Given Interest Bank A/c Interest A/c Debit Credit

Bank Charge Interest Interest Bank A/c Debit Credit

Director: Mr. Bharat Mehta

Director: Mr. Bharat Mehta

Director: Mr. Bharat Mehta

8. 9. 10. 11. 12. 13. 14. 15. 16.

17. 18. 19.

Trade Expenses A/c Debit Cash A/c Credit

Director: Mr. Bharat Mehta

Director: Mr. Bharat Mehta

Director: Mr. Bharat Mehta

Director: Mr. Bharat Mehta

Director: Mr. Bharat Mehta

Director: Mr. Bharat Mehta

Director: Mr. Bharat Mehta

Second: Third : Fourth : Fifth Sixth : :

Seventh Eighth : Ninth : Tenth :

Director: Mr. Bharat Mehta

Director: Mr. Bharat Mehta

Director: Mr. Bharat Mehta

I Quarter II Quarter III Quarter

Director: Mr. Bharat Mehta

Annexure Under VAT (Local Sale & Purchase):

Central Sale Tax (CST)

Director: Mr. Bharat Mehta

Director: Mr. Bharat Mehta

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