401476820.

xlsx Security Level

Balance Sheet
Assets Li

Large amounts, Typically one

Typically one time purchase, They stay with you for long term, They help to generate revenue They help
NC
Non Current (NC) Asset Current Asset Liab..

Any assets that states more than 1 Loans

year (which we do not want to >1
convert into cash) Assets which can covert into cash within a year year

Ads (Large Long term Deals A/c

Furniture & other Asset A/C

Short term Investment A/C

Long term Investment A/C

Inventory (unsold) A/c

Bills Receivables A/C

Advance Paid A/C

Drawings A/C
GoodWill A/c
Building A/C

Debtors A/C

Loans A/C
Cash A/C
Bank A/C
Type of Accounts Real A/C Per
Rule for Debit What comes in R
Rule for Credit What Goes out
Increase in Cash account (Claim of business
goes up) DR
Decrease in Furniture Account (claim of
business goes down) CR

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 401476820.xlsx Security Level

Increase in Creditors (Claim of business

goes down)
Decrease in Capital (Claim of business goes
up)
Increase in outstanding expenses (Claim of
Business goes down)
Decrease in Prepaid Expenses (claim of
business goes down CR
Increase in salary of Expense (claim of
business goes up)

Accounting Equation
Invetment by owners (Upasana 100, Rameez
50, Shaurya 50) DR
Property Loan from ICICI Bank: 100 DR CR
Purchase of 50 laptops for resale in store @
50 per piece. Amt to be paid in 2 mnts
Sale of 10 laptops @100 per piece. Amount
to be recovered in a month DR
One customer could not be located CR
10 office staff paid salaries @10 per month CR
Interest on property loan paid @ 10% CR
Depreciation on Property Charged @ 20% CR

Property sold off for 70 CR DR

Property loan paid off. Discount received on
early payment 5 CR DR
Investment in a Pvt company ABC Ltd 20 DR CR
Ledger Each item A/C . This is summarizing from Each A/C perspective. (Write All Debit as To <which A/c> ;
(E.g Ledger for Cash A/C )
To Capital
Started Business with Cash Rs 10K A/C
Deposited into Bank 9K By Bank A/C
No recording
Purchase machinery for Rs 5K from jawahar as no cash
and gave him a cheque for the amount involved

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 401476820.xlsx Security Level

Since there
is
Byno
Paid Installation charges on machinery Rs evidence
Machinery
100 that
A/C Cash is
paid and
Purchased furniture from Naveen Rs 2K. He hence No
allowed 10% trade discount recordings
No recording
as no cash
Sold furniture to Naresh Rs 1000 involved
No cash
Received a cheque from Naresh for Rs 990 recording. It
in full settlement is bank A/c
By Rent A/C
By Wages
Paid wages Rs 350 and Rent Rs 200 A/C
No cash
Paid to Naveen 1900 by cheque in full recording. It
settlement is bank A/c

An Account is Dr Balance is

Trail Balance Always Debit Balance (except bank A/c where it can have Cr balance as well) Always

Final Accounts (Follows the (1) Income Statement: Trading Account (to get the Gross Profit - Only if y
Matching Principle)

Income Statement -Trading Account

Income Statement -Profit & Loss Statement

Balance Sheet All Asset in Assets column All Liabilities

Adjustments (Only if not considered in Trail Balance) . These adjustments to be shown in both Income Sta

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 401476820.xlsx Security Level

Sho
w
Unsold Inventory/Stock here

Goods worth 500 taken by Proprietor (Goods

Drawing)

Salaries of Rs 1000 unpaid

Interest on bank overdraft Rs 2000 was unpaid

Make provision for bad debts @ 5% of sundry
debtors
Sho
Rs 500 Insurance premium paid in respect of w
next year first quarter here

show
Interest on investment Rs 500 yet to be received here

Commission of Rs 1000 received is yet to be

earned
Sho
w
here
as
Depreciation to be charged on land & building less

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 401476820.xlsx Security Level

Accounting Statements
Income Statements
Liabilities Expenses
Smaller items, Recurring in nature, Typically short term, Help in to run day to day business
Large amounts, Typically one time, You have to pay in Long term, Direct Expenses - Any Expenses that are related to manufacturing of goods
They help you to buy assets Indirect Expenses - Any expenses that are realted to selling of goods

Capital Current Liabilities Operating Expense Non Operating Expenses

Own Money, Equity Short term Loans < 1 Expenses not for the
shares year Expenses for the smooth running of Business business
Cash Carity (show as reduction from capital)

Drawings A/C (counter Liability) show as

Infrastructure operations (e.g Elec) A/C

Profit Earned (no A/C but + in capital

Discount offered to customes A/C

Interest paid for Loan taken A/C

carriage (used to transport) A/C
Depreciation A/C (Indirect)

Outstanding Expense A/C

Maintenance & repair A/C

Payment for Lawsuit A/C

Commissions etc A/C

Short term loan A/C

Customs /Duty A/C

reduction in capital

Wages/Salary A/C

Advertizment A/C
Bills Payable A/C

Cash Carity A/C

Bad debts A/C
Purchase A/C
Overdraft A/C
Creditors A/C

Tax Paid A/C

Capital A/C

Rent A/C

Personal A/C Nominal A/C

Receiver All Expenses (Cash (asset) goes down , Capital goes down)
Giver All Incomes (Cash (asset) goes up, Capital goes up- the profit part)

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 401476820.xlsx Security Level

CR

DR

CR

Dr

Write it as X A/c Dr , To Y A/C Cr

CR

CR DR

DR
DR
DR
DR

Note: sales A/c is not involved. Because sale A/c is involved only when goods are being so

ll Debit as To <which A/c> ; All Credit as By <which A/C>) . At the End what ever is balance write it as "By balance C/D <amount> or To balance C/D <amount> " in the T

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 401476820.xlsx Security Level

ccount is Dr Balance is if DR Total > CR Total ; An Account is Cr balance if CR Total > DR Total

Always Credit balance Always Debit Balance

get the Gross Profit - Only if you have anything to do with the inventory or Manufacturing); Profit & Loss Statement - after the trading accoun to derive Net Profit)
(2) Balance Sheet

Show all Direct Expenses (of both operating & non operating) in Debit Side

Show all Indirect Expenses (of both operating & non operating) in Debit side
All Liabilities in Liabilities column

own in both Income Statement and Balance sheet.

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 401476820.xlsx Security Level

Sho
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here

show show
here here

show show
here here

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here

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here

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 401476820.xlsx Security Level

Income

Small in nature, Recurring in nature, Typically short

term, Help in cover your expenses
Non Operating
Operating Incomes incomes
Income from
sources other
than the
Income from Business Business
Income from Renting your permisis A/C
Interest received from banck balance,
Commission received A/C

Discounts received A/C

Accured Income A/C

Investments
Sale A/c

tal goes down)

up- the profit part)

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 401476820.xlsx Security Level

CR

Dr Balance

only when goods are being sold Cr Balance

CR

ance C/D <amount> " in the Trail balance

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 401476820.xlsx Security Level

Always Credit Balance

e Net Profit)

All Operating Income in

Credit side

All Non
operating
income and the
Gross Profit from
Trading account
in Credit side

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 401476820.xlsx Security Level

Show here

Show here

Sho
w
here

Show
here

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 401476820.xlsx Security Level

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 401476820.xlsx Security Level

Dr Total > Cr Total

Cr Total > Dr Total

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