„





 

@
  


ÀÀÀ

  

|

 | |
 3    
¦  

   



   

  

¦ !



  

 
  
 



¦ „ 
 
   
 
"

 



¦ # 
   $
  
ÀÀÀ

  

|

 | 
 3    
¦ „ %     
 

¦ „ &        


¦ 3%    

¦ Sales Returns: Returned inwards


inwards

 .
¦ xrade discount: allowance from the scheduled price
granted by seller to buyer.
¦ Cash Discount: allowance by creditor to debtor. If
someone pays his debt before due date. He might get
an allowance for doing so.
ÀÀÀ

  

|

 | 
 3    
¦ Commission: it is a form of remuneration for
services performed by one party to another.
¦ Expenditure: it happens when an asset or service
is required.
¦ Expense: it is an expenditure where the benefit
is expired in the present but may provide benefit
in future.
¦ Account: summarized record of transactions
relating to a person or thing.
ÀÀÀ

  

|

 | 
 3    
¦ Debtor: also called account receivable. A person who
owes money to another.
¦ Creditor: also called account payable. A person who
pays out money to another.
¦ Asset: xhings of value owned by a trader.
¦ xangible assts
¦ Current Asst.
¦ Fixed Asst
¦ Intangible assets (Financial Assets)

ÀÀÀ

  

|

 | 
  
„

¦ '())%„*&'#. xhe normal
'())%„*&'#.
calendar duration for reporting of financial
information. xhe time for closing accounts
when  
 data are summarized
¦ Sales
¦ Profit or Loss

¦ Expense

¦ Procurement of assets, raw materials

¦ xax, etc

ÀÀÀ

  

|

 | 
 Ú 
 
+
¦ Accounting is the Language of Business.
Business.
It describes all types of business
activities.. Cost, Price, sales volume,
activities
Profit, etc.
etc.
¦ Accounting is the Process of Observing,
identifying, measuring, recording,
classifying, summarising and reporting
the financial information to its users in
the form financial statements
statements..
ÀÀÀ

  

|

 | 
 Ú 
 
 +
¦ A/C system is consist of (personal, procedures,
devices, and records used by organization. (1) to
develop A/C information. (2) to communicate
this info to decision makers.
¦ Every organization needs good records that
show where its money comes from, where it
goes, and how the organization is performing
financially. xhe system used for this purpose is
called the organization's accounting system.

ÀÀÀ

  

|

 | 
 !
,

- 
¦ Interpret and record the effect of
Business transactions
¦ Protect & Legal Requirements
¦ Classify the effect of similar
transactions.
¦ Summarize and communicate the info
to decision makers.
ÀÀÀ

  

|

 |
 ÚHAx YOU ÚANx FROM YOU·RE A/C
SYSxEM

¦ xhe kind of information we found in

the prior examples is what you want
from your accounting system. xhis
feedback must
¦ Be accurate
¦ Fulfill management's requirements

¦ Be easy to use

ÀÀÀ

  

|

 | |
 ,

-



' 
 


 It is required to conduct an
organization·s day
day--to
to--day activities.
activities.
| ,

  

 
:: is intended both for internal & external
parties of the organization, including shareholders, stockholders,
bankers and other creditors, government agencies, and the
general public.
public.
. /  
:
 
: xhe accounting information
specifically prepared to aid managers is called management
accounting information.
information.
0    
:
 
: it is to ascertain the cost of products.
products. And
help mgt in control of costcost..
1   
:
 
: x

  
 

 






  
 .. xhe most challenging aspect of tax
accounting is not the preparation of an income tax return but
rather tax planning

ÀÀÀ

  

|

 | ||
 Ú 
   
-+
¦ x
 
 
 

  



 

¦ x

  

 
 
 



  

x 





x  

x 



  

x  

  ÀÀÀ

  

|

 | |
 3
* 2# * 
¦  
# * 3 
¦ In order to be sure that our accounts are correct, we can make a xrail balance.
¦ Easily we can calculate our profit or loss
¦ Because the transactions enter in a systematic way therefore it can be or reliable.
¦ Avoids falsity even in very complicated transactions.
¦ A business can see the different accounts of its activities and can make good
decisions.
¦ #
 
# * 3 
¦ Double entry system needs some accounting books to be kept in an office and it is
very difficult for a small business for maintaining of these books.
¦ Due to maintaining of some accounting books, double entry system is more
costly.
¦ Although we have trail balance, but we can not guarantee the accuracy of double
entry system.
¦ 3
* 
¦ xhe Single entry system is completely different from double entry system.

ÀÀÀ

  

|

 | |
 '())%,'&"*!(3)*3334*

¦ xhe business cycle is nothing more than the flow of transactions

needed in your business to complete a sale and collect the
proceeds. It's important to setting up your accounting system.
Úe want to know what types of transactions are involved and
the accounting entries to make along the way. Most companies
business cycles progress something like this:
¦ 1.Purchase raw materials.
2.Enter goods into raw materials inventory.
3.Begin the manufacturing or assembly process.
4.Enter goods into work in process inventory.
5.Pay suppliers or pay employees (at service companies).
6.Complete the manufacturing or assembly process.
7.Enter goods into finished goods inventory.
8.Sell the inventory.
9.Collect payment for credit sales.
¦ Briefly, here is the way your accounting system interacts at each
stage of the business cycle.
ÀÀÀ

  

|

 | |
  
„


¦  
„

  

 
          
 

  
 
 
 
 
    

 

 


 


 
¦ *
,  
 
„


¦ (
„   



 

   


     
¦ '5

„
 5




 
 


 
  

  


 
¦ ,


„  


 
   
 






ÀÀÀ

  

|

 | |





 
„


¦  
      

  

- 

 

 


| !
*
 
. %
    
0 / /    
1    
6 #   
7  
„
  
8 / 
  
9 &
:
  

ÀÀÀ

  

|

 | |





 
„



¦  
 

1. Convention of Disclosers
2. Convention of Materiality
3. Convention of Consistency
4. Convention of Conservatism

ÀÀÀ

  

|

 | |
  
 
| !
*
   



    



 



 

   

       
   

 
. %
      
  


   


 

 
   
   

  $
  
 



  
 

 
 
     
  
 


  
ÀÀÀ

  

|

 | |
 Accounting Concept
0 / /     

     


 
   
 )    

 ; 


 $

  
1       $
    
    
  
  

   


 $ 
     

  
6 #    
      
  #
  
 
* 

   


   
  
   ÀÀÀ

  

|

 | |
 Accounting Concept
7  
„
  


 





  
  

 
     

 
 
8 / 
  &  


  



    
 


  


 
 
 
   
9 &
:
  
 

 
 
   
: 

      
  
 
ÀÀÀ

  

|

 | 
 Accounting Conventions
1. Convention of Disclosers: It implies that accounts should be
prepared in such a way that all materials are clearly disclosed to
readers. It means sufficient disclosures of info (included in F
statements) to proprietors, creditors & investors.
2. Convention of Materiality: Only those events/items should be
recorded which is important. xhe unimportant info has to be
ignored. It is left to the accountant for taking a decision.
3. Convention of Consistency: xhe accounting practices should
remain unchanged from one period to another. If a change
occurs in the principles this has to be reflected in the books of
accounts. xhis is important for the purpose of comparison.
4. Convention of Conservatism: xhis means a caution approach
policy. If there is a possibility of loss it should be taken in to
account at the earliest. On the other hand a prospect of profit
should be ignored upto the time it does materialize.
ÀÀÀ

  

|

 | |
 Nature of Accounts
¦ Classification of Accounts: xo record a transaction in
books of accounts xhis has to be identified which
account to be debited and which one to be credited.
xhere are three classes of accounts
| „     Are accounts relating to persons
or firms as (Rahman·s account, Habib bank account,
salaries outstanding account).
. &    accounts: Are accounts to keep
record of properties or things owned by a trader like (
building, lands, vehicle, cash, inventory etc)
0 ) 
  
    :
  : xhese accounts
have no existence mere in name that records
expenses, gains and losses like( salaries, wages, rent,
repair, interest, discount etc)
ÀÀÀ

  

|

 | 
 !
   

¦ #
 


¦  
¦ 4




¦ ' <=

¦  
¦ *

ÀÀÀ

  

|

 | 
 Assets
¦ Simply stated, assets are those things of value
that your company owns
owns.. xhe cash in your bank
account is an asset.
asset. Assets are the objects, rights
and claims owned by and having value for the
firm
¦ Current Asset (Cash, convertible to cash, used up during the
year/operating cycle, e.g. inventory, accounts receivable, prepaid expenses
expenses..)

¦ Fixed assets ( Assets with useful life of more

that a year)
ÀÀÀ

  

|

 | 
 Liabilities
¦ xhink of liabilities as the opposite of assets.
assets. xhese are
the obligations of one company to another.
another. Accounts
payable are liabilities, since they represent your
company's future duty to pay a vendor
vendor.. So is the loan
you took from your bank.bank. If you were a bank, your
customer's deposits would be a liability, since they
represent future claims against the bank (right of
creditor)
¦ Short term
¦ Long term

ÀÀÀ

  

|

 | 
 Owners' equity
¦ xotal assets minus total liabilities of an
individual or a company, is   net
worth or shareholders' equity or net assets.
assets. xhis
is the claim against the assets of the firm.
firm. (xhe
right to the properties) or (right of owners).
owners).
¦ Partners' capital accounts
¦ Stock

¦ Retained earnings

ÀÀÀ

  

|

 | 
  
¦     
   Revenue ² total cost/expense is

 .. If you have several lines of business, you'll
 
probably want to establish an income account for each
each..
In that way, you can identify exactly where your income
is coming from.
from. Adding them together yields total
revenue..
revenue
¦ Sales revenue from product A
¦ Sales revenue from product B (and so on for each product to track)
¦ Interest income
¦ Income from sale of assets
¦ Consulting income
ÀÀÀ

  

|

 | 
 *  
¦ *  Expense is a cost whose benefit is
*  Expense
finished or completely utilized. however the benefit will
be obtained in future activities of the firm. Expense
reduces the income. xypical expense accounts include
¦ Salaries and wages
¦ xelephone
¦ Electric utilities
¦ Repairs
¦ Maintenance
¦ Depreciation
¦ Amortization
¦ Interest
¦ Rent

ÀÀÀ

  

|

 | 
 Debits and Credits
   #
  

üüüüüüüüüüüüüüüüüüüüüüüüüüüüü
Assets Increases Decreases
Expenses Increases Decreases
Liabilities Decreases Increases
Income Decreases Increases

ÀÀÀ

  

|

 | 
 ë  
¦  5  
     
 >
>
>>  




 


    
 

   


  
  





       




 



¦ Ú (  ë  +
¦  5     


   


      
 


 



¦  5    
     
  

  
  


 



¦  
 5        
ÀÀÀ

  

|

 | 
 ë  

    |

         !"#   

                
$"%& |!'&  |           
 ('  ")!        |     
 ('  "'*'#%'& +''',             
 #  |  |         
  !'&        |  |   
 +"%&'##-"%'&             
  .+#             
  !'&         |    
 %%+'/           |   
 +"%&'# +#-"(.!%(/             
 |  %%+'"%*    | |         
  #         | |   
 0#"-#123%(/,             
 |  --%4+(             
  %%+/              
 +"%&'#%"#-"(05!(/             
   !'&    |         
  %%+ %*           |   
  %*#'"%%-"(123,             
   %%+/              
  !'&             
 #.!"/(,             
|

 |O |
 4 
¦  
   $ 
   
 



  
 



   

    

   $


   - % 
ë  

¦  
   $

  $

      


 
 $


       
 
   
     
   5  
    
  

 
  


  


 



ÀÀÀ

  

|

 | 
 4 
!'& ('  " ! 

| 67 |
| 67 |

!'& #

| |
 6 7 | |
 6 7| |

!'& %%+ ' / 

| |
 | |
6%7 |

6%7 |

.+#

6%7 


! "%*  #

| 6#7 ||
 | |
| 6#7 ||

ÀÀÀ

  

|

 | 
 Banking
¦  $
  
 
 -  
 
"
 
  
     
       "
 
     
  
¦ !$  
  

  

   

  
 
 

 

    

 

 
ÀÀÀ

  

|

 | 
 !$ ;,
¦ !$;
xhe amount with which a
!$;
xhe
banking firm is registered is called the
authorized capital.
¦ „

: is the portion of capital which the
„

:
banking company has actually received from the
public.
¦ 3

:


: is that part of the issued capital
which is applied for by the public, including shares
issued by vendors or promoters.
ÀÀÀ

  

|

 | 
 !$ ;,
¦ & 
 is the accumulated un- un-
divided trading profits set aside to provide for
contingencies and any unusual call upon bank·s
resources.
¦ 4
=
 under
4
=
  under legal obligations each
bank has to maintain a certain amount of liquid
assets such as money at call, gold & bullion,
securities, money at call or short notice.

ÀÀÀ

  

|

 | 
 ,

!$
¦ Primary function: It is borrowing and lending money.
¦ General utility Function: Banks also perform functions
for the benefit of the public. A) Issue important
documents. B) finance import and export trade of the
country. C) keeps valuable things & papers in safe
custody.
¦ Agency Function: A) collect & pay checks on behalf of
their customers. B) they realize interest & dividend on
B. C. C) xhey pay subscriptions and insurance premium
on B C. D) xhey act as referees for their customers.

ÀÀÀ

  

|

 | 
 !$  
¦ Current account: xhe customer can deposit and
withdraw money as and when he likes. xhere is no
interest rate on this type of account.
¦ Saving Account: xhis type of account is to make profit.
In this type of account the amount of the deposit is
usually a certain amount. And withdrawals could be
done twice or three times a week.
¦ Fixed Deposit Account: in this type of account a certain
amount is deposited for a specified period of time for
example 6 months or one year.

ÀÀÀ

  

|

 | 
 !$4 
¦ Overdraft: xhe customer is allowed to borrow
an agreed amount in excess of the customer·s
bank balance. xhe customer has to pay interest
on an agreed rate on the amount overdrawn by
the borrower.
¦ Loans: A loan is made when a bank advances a
particular amount of money for a specified
period of time. xhe borrower has to pay the
interest whether he make use of the total or part
of the overall loan.
ÀÀÀ

  

|

 | 
 $-=
¦ Check Book: It is supplied by the bank that
enables a customer to make withdrawals from
his account to various parties by issuing check.
¦ Check / Cheque: it is an unconditional order in
writing drawn by customer on his bank,
requesting to pay on demand a certain amount
of money to a person named in the check.

ÀÀÀ

  

|

 | 
 X

$-=
¦ Bearer Check: xhe phrase ´bearerµ is written after the
name of payee. It is payable to the bearer. Any one who
present it at the bank.
¦ Order Check: it is a check where the word order is
written after the name of payee. It is made payable to a
particular person or order. It can be transferred by
endorsement and delivery.
¦ Cross check: xwo parallel lines are drawn across the
face of a check. A crossed check cannot be cashed at
the counter but can be collected only by a bank from
the drawee bank. xhe crossing may be general or
special.
ÀÀÀ

  

|

 | |
 #
  
$-=
¦ Úhen the check is paid by the Drawee bank. It is said
to be honored. Úhen is not paid it is called to be
dishonored. xhe check is returned by the bank with a
print slip showing the reason for dishonor.
¦ Not sufficient Funds
¦ Payee endorsement required
¦ Drawer signature differs.
¦ Alteration require full signatures
¦ Check post or out dated
¦ Amount in words and figure differ
ÀÀÀ

  

|

 | 
 *  
¦ Endorsement of Check: xhe word endorsement means
signing on the back of the negotiable instrument to
transfer the ownership to another party (called
endorsee). Rules for endorsement
¦ Endorsement should be made on the back side of a
negotiable instrument.
¦ Endorsement should be done by the person himself or by his
duly assigned agent.
¦ xhe person making the endorsement must sign his name
exactly as it has been written on the face of the instrument.

ÀÀÀ

  

|

 | 
 &

¦ Bank Draft: Bank draft is the mean of transferring
money from one place to another. It is an order drawn
by a bank on one of its branches requesting the later to
pay a specified sum of money to the person named in
the draft. It usually corresponds with a check.
¦ Hundis: A hundi is exactly like a bank draft. It is drawn
by a trading firm upon its branches for book keeping.
¦ Postel orders: Postal orders are also written orders
made by one post office on another. Úhen the amount
of money to be sent is small. Postal orders serve the
same purpose as bank drafts.
ÀÀÀ

  

|

 | 
 !

*
¦ Bill of exchange is an unconditional order in writing
addressed by one person to another, signed by the
person giving it, requiring, the person to whom it is
addressed to pay on demand or at a fixed or
determinable future time.
time. ( a certain sum of money to a
specified person or bearer)
bearer)..
¦ An inland bill is a bill payable/drawn within the
country..
country
¦ A Foreign bill is one which is drawn within the country,
but accepted & payable outside country.
country. Or drawn
outside the country but accepted & payable inside
country..
country
ÀÀÀ

  

|

 | 
 " !

*

+
A merchant can hardly afford to be out of funds
for long, moreover to sell goods on credit is rather
a risky job.
job. xherefore when A sells goods to B. A
draws bill and send it to B for acceptance
acceptance.. B
approves the bill and also binds himself to pay the
amount thereof when due. due. xhe bill is thus
complete and comes back to A to remain in his
possession till maturity or can be endorsed or
discounted by him.
him. On due date the bill is handed
to its acceptor for collection of payment.
payment.
ÀÀÀ

  

|

 | 
  
!

*
¦ It is a legal evidence of debt.
debt.
¦ It is a convenient method for the xRF of debt.debt.
¦ A creditor can sue on the bill itself
itself..
¦ It is negotiable instrument and can be transferred for
settlement of one·s debit without difficulty.
difficulty.
¦ It can be cashed before due date by discounting.
discounting.
¦ A debtor enjoys the benefit of full period of credit
credit..
¦ It an easy means of transmitting money from one place
to another.
another.
ÀÀÀ

  

|

 | 
 #

  !-*„-)
Promissory Note Bill of Exchange
¦ It is promise to pay.
pay. ¦ It is an order to pay
pay..
¦ xhere are two parties the ¦ xhere are three parties
drawer and payee
payee.. the drawer, drawee and
¦ xhere is no need of payee..
payee
acceptance ¦ It must be accepted
¦ xhe maker is primarily ¦ xhe drawer is not
liable..
liable primarily liable
liable..
¦ Protesting is not ¦ A foreign bill must be
necessary after dishonor.
dishonor. Protested upon dishonor
dishonor..

ÀÀÀ

  

|

 | 
#

  !-*$
Check Bill of Exchange
¦ It is drawn on a banker ¦ It may be drawn on any party
or individual
individual..
¦ It has three parties the
drawer, drawee and payee
payee.. ¦ It has three parties the
drawer, drawee and payee
payee..
¦ It doesn·t require acceptance
by drawee.
drawee. ¦ It must be accepted by
drawee, before he can be
¦ Days of grace is not allowed made liable to pay the bill.
bill.
to banker
¦ xhree days of grace are
¦ No stamp duty is payable always allowed to the drawee.
drawee.
on checks
checks.. ¦ Stamp duty has to be paid on
¦ It is usually drawn on the B/E..
B/E
printed forms supplied ¦ It may be drawn on any
by the banker.
banker. paper and need not
necessarily be printed.
printed.
ÀÀÀ

  

|

 | 
 3>>



ë  
3
¦    




  

5  
:   

 

 

 
5  
:   




  ë  

¦   5  
 
>>


  
5   $   

   $
 $

  -

  




  

ÀÀÀ

  

|

 | 
 X

3

  $
1. Cash book
book:: It is used to record all cash receipts an
payments..
payments
2. Purchase Book:
Book: It is used to record all credit purchases.
purchases.
3. Sales Book:
Book: It is used to record all credit sales.
sales.
4. Purchase return Book:Book: It is used to record all goods
returned by us to our suppliers
suppliers..
5. Sales return Book:
Book: It is used to record all goods returned
to us by our customers
customers..
6. Bills receivable Book:
Book: It is used to record all accepted
bills received by us
us..
7. Bills Payable Book:
Book: It is used to record all bills accepted
by us to our creditors
creditors..
8. General Journal
Journal:: It used record those transactions for
which there is no separate book.
book.
ÀÀÀ

  

|

 | |
  
3

  $
1. Subsidiary books records the details of the
transactions and helps the ledger to become brief.
brief.
2. Similar transactions are recorded together in one
book, thus future references to any of them becomes
easy..
easy
3. As each Journal contains separately transactions of
similar nature any desired analysis can be made
conveniently..
conveniently
4. xhe chance of fraudulent alteration in an
account is reduced as the book of original entry
keeps the record in chronological order
order..
ÀÀÀ

  

|

 | 
 X

! $
¦ Single Column Cash book book:: It records only cash receipt
and payments
payments.. It has only one money column for each
side.. Cash Receipt are entered on Dr & Cash Payment
side
on Cr side
side..
¦ Double Column Cash Book Book:: It is consist of two
separate columns on the debit and credit side to record
cash and discount
discount..
¦ xhree column Cash BookBook:: It has three columns on each
side.. One for cash, second for discount and third for
side
Bank account status.
status. xhis type of cash book is very
helpful since it reveals the cash and bank deposits at a
glance..
glance
ÀÀÀ

  

|

 | 
 3
 ! $
Dr. Cr.
º
  
 
  
º
  
 
  

 "  "

       #   ' (   
       $ ' !  
   !   #  % ' !    %
  ' 
  
 & '     &

) )

        &

ÀÀÀ

  

|

 | 
 #  ! $
Dr. Cr.
º
  
 
  º 

º
  
 
  º 


 "  "

       #   ' (   
     200   $ ' !  300 
   !   #  % ' !    %
400
  ' 
  
 & '     &

600 ) 300 )

       
8000

ÀÀÀ

  

|

 | 
   ! $
º
  
 
  º 
*  + º
  
 
  º 
*  +

 " "  " "

       # 30000   ' (   
     200    ' * 
   *   $ ' !  
300
   !   400 #  % ' !    %
 %  !   #   ' 
  
 & ' ,-- .( $
 & '      

600 ) 56000 300 ) 56000

        7000 32000

ÀÀÀ

  

|

 | 
   3 
| ( 
   

 

 
 
    


        
   
  




   
     

       
 
 


  
   





 

 
ÀÀÀ

  

|

 | 
 „ ! $
º
  º

  
  
  

    

Salary of four Armed guards, ANBP



  Compound for the month of September   Ë
 

ºSA PAYMENT FOR Jalalabad RVC STAFF



  ON MISSION TO Jal- Nooristan Ë

 

one sign board of WFP in front of ANBP

compound for food items provided by WFP to




 ANBP Ë 

ºaily wage of three armed guards of ANBP




 compound for days of September  

Ë
 



  Medical examination for joining ººR. Ë  

One police uniform and Six pairs of military




 shoes for ANBP out side armed guards Ë 

One Nokia mobile phone model (| for



  Radio room. Ë  !"

ºSA payment of Wafa from  to  of Sep,




 on mission to JAA- Kabul Ë
 #

Two steel sheet size ft x ft and iron bolts



  for the guest house bunker gate Ë
 $#

 liter Fuel Payment for (ANBP's, Moº's

vehicles and generators for the month of



  September   ) Ë  % 

one bag of cement for fixing the basement of




 
ANBP security booth for armed guards. Ë
 #



  Mobile phone top up cards Ë

 

 liters Fuel Payment for (ANBP's, Moº's

vehicles and generators, till |th of Oct,



   ) Ë

 %##!

TOTAL % # $%$" $# #" !" $

ÀÀÀ

  

|

 | 
 ,
  
|   

    
       

 
  

   


 
 
 


 
   


     - 
 


     
  
. 

     

 



ÀÀÀ

  

|

 | 
 J
 
     
3   
' 
  

J
 O O 
OOOOO
OO O -O2O 
OOOOOOOOOOOOOOO
O 
 OO -O.O O 
OOOOOOOOOOOOOO
O 
OO %O O 
O /O 3/O 
OOOOOOOOOOOOOOOOOOOOOOO
O
O O O ()*
^ O O 
OOOOO 
OO
 OO
OO O 4/O 
OOOOO  
OO 0O O 
OOOOOOOOOOOOOOO! 
O 
 OO .O O 
OOOOO
O  
OO O %3O 
OOOOO"

O#O


O$ O
O O %O 
O O O 
OOOOOOOOOOOOOOOOO 
OOO%O OO O /O 
OOOOO"

O
O$OOO O O (+
O O O 
 OO O O (+
O O O 
 !" OO O O 
OOOOO O&!O O O 
OOOOOOOOOOOOOOO'
O&!O .O O 
OOOOOOOOOOOOOOO
(O

OO O O 
OOOOOOOOOOOOOOO)
O!!O&!OO 111111O O 
OOOOOOOOOOOOOOOOOOOOO 


OO O %O 
OOOOO#
O&!OO O O 
OOOOOOOOOOOOOOO*$$O

OO .O O 
OOOOOOOOOOOOOOO"
&OO O O 
OOOOOOOOOOOOOOOO
O&!O
OO 111111O O 
OOOOOOOOOOOOOOOOOOOOOO 


OOO O 2O 
OOOOOOOOOOOOOOOO"

O!

O&!OO O O (+
O O O 
#
   O O ()+)
J
 O O 
OOOOOOOOOOOOOO+
O(O .O O 
OOOOOOOOOOOOOO,

O$O 1111O O 
OOOOOOOOOOOOOOOOOOOOOO 


OO O %O 
#J
$J

"%#$J
& O O (+,
|

 | OOOOOO
 
O&!OO /O  
#J
'J
"%#'J
& O (+-
O O
 "*&4!4)*

 




    


 
 
 
   >
 >
   

   

    
  

 
  
   ? 

   
 
  
>

>
     

 

 >>  

    
 
      ÀÀÀ

  

|

 | |
 "*&4!4)*
Cash ««««««««««««««« $ 22,500
Accounts receivable ««..««««««... 9,500
Land ««««««««««««««« 130,000
Building ««.«««««««««««.. 36,000
Office equipment ««.«««««««.... 5,400
Accounts payable ««.«««««««« $ 23,400
James Robert, Capital «««««««««. 180,000
$203,400 $203,400

ÀÀÀ

  

|

 | 
 Ú $ 

  
 
     

 5
   
 
 

 $
 
    

:
 
 
    



    
         
  $
   
  

 
 
   $
      
  

  

 
  $ 
  




     
 
       
  

   
 



ÀÀÀ

  

|

 | 
Ú $ J


 
 
   ! " # #   J" ! "
$ "
$  $  $  $  $ 
{
 
          
              

 
          
           
 
     !      
           

"

            
 
#  $ 
          
  !
    %    %     %
& $'  ( 
   %     %     %
& $'  ( )!          
*
 $ 
           
+ $ 
    %  %    %
          
+ " " 
          
,!
   %     %%%   %%%  
,

  %     %   %    
*
            
&             
 %& %&        
-             
 
 !
     %  %  %  
+    %  %  %   
.           
+
     !       
   '&%( '&%( %%) %%) (&' )% '' ((
"       ('   ('
        )% )% '' ''
|

 | 
  

| & 

 

. „ 

 
  
 
0 „ 
 
!
1 /$
5      
6  
  $
7 „ 



   

ÀÀÀ

  

|

 | 
 (1)
| & 
 
 



Businesses keep a daily record of
transactions in sales journals, cash
cash--
receipt journals or cash
cash--
disbursement journals.
journals.

ÀÀÀ

  

|

 | 
 .
. „ 
 
   
   
  A general ledger is a summary of
all business journals.
journals. An up up--to
to--date
general ledger shows current information
about accounts payable, accounts
receivable, owners' equity and other
accounts..
accounts

ÀÀÀ

  

|

 | 
 0

As explained earlier, before using the

account balances to prepare a balance sheet,
it is desirable to prove that the total of
accounts with debit balances is equal to the
total accounts with credit balances.
balances. xhis
proof of the equality of debit and credit
balances is called a trial balance
balance..

ÀÀÀ

  

|

 | 
 1

0 /$
 5     

  General
General--ledger adjustments let
businesses account for items that don't
get recorded in daily journals, such as bad
debts, and accrued interest or taxes
taxes.. By
adjusting entries, businesses can match
revenues with expenses within each
accounting period.
period.
ÀÀÀ

  

|

 | 
 
5


1. Entries to apportion recorded cost:
cost: A cash expenditure that will
benefit more than one accounting period. period. Dr
Dr.. Relevant Exp
account & Cr.Cr. Relevant Asset Account.
Account.
2. Entries to apportion unearned revenue
revenue:: A business may receive
cash in advance for services to be rendered in future accounting
period.. Dr
period Dr.. unearned revenue & Cr.Cr. Revenue earned.
earned.
3. Entries to record unrecorded expense:expense: an expense may be
incurred in the current accounting period even though no bill
has been received and no cash payment will occur until next
accounting period.
period. Dr
Dr.. Relevant Exp account & Cr.Cr. Rel Liability
account..
account
4. Entries to record unrecorded revenue:
revenue: revenue may be earned in
the current period.
period. But not collected in the period.
period. Dr
Dr.. Account
Receivable & Cr.Cr. Revenue Earned.
Earned.

ÀÀÀ

  

|

 | 
 6

1  
   $
 $ After all
revenues and expenses are accounted
for, any net profit gets posted in the
owners' equity account.
account. Revenue and
expense accounts are always brought
to a zero balance before a new
accounting cycle begins.
begins.
ÀÀÀ

  

|

 | |
 7

6 „ 



    
    At the
end of a period, businesses prepare
financial reports ³ income statements,
statements of capital, balance sheets,
cash--flow statements and other reports
cash
³ that summarize all of the financial
activity for that period.
period.

ÀÀÀ

  

|

 | 
 ,

   
¦ xhe basic purpose of financial statements is to assist users
in evaluating the 

    

 


   of a business
business..
¦ In deciding where to invest their resources, investors and
creditors often compare the financial statements of many
different companies.
companies. For such comparisons to be valid the
financial statements of these different companies must be
reasonably comparable ² that is they must present similar
information in a similar format
format.. xo achieve this goal
financial statements are prepared in conformity with a set
of ´ground rulesµ called 

 

  


ÀÀÀ

  

|

 | 
 !3
¦ 

 


  
 



 
 



  

  

  

 
 
 


 
    
   
 
    
 
 ;=

  
 


ÀÀÀ

  

|

 | 
 !3
 > 


 

 
8 9 :
; <
;  ;  
;   ; 
; ; | 
;   9 :
= ; |  > ;  
||
 x
 ||


ÀÀÀ

  

|

 | 
    
An   
 indicating the
 
 of the business over a
financial period.
Net income is an increase in owner·s equity resulting
from the profitable operation of the business. xhe
opposite of net income, is the decrease in owner·s equity
resulting from unprofitable operation of the business, and
is called net loss.

ÀÀÀ

  

|

 | 
 J! º /,01
J




 
 2  
134
5
3 "#)##
 5 3 "&)6#

 3 Ë

07(  4
 7(  "#)&
!   ")

 
  7(  ")%

º(
 7(  ")
J

7(  "#)
1
7(  "$)&
J   7(  ")

 7(  Ë  

 ÀÀÀ

 Ë 
 


|

 | 
 3   
' ;*=

|  
   
 

  


    
   ;
=
 
  
  
 

 
   
: 
  
     
  ;
=

        




ÀÀÀ

  

|

 | 
 J! º /,01
!


- 89 .
'

 
 2  
 ' 0  
)  (
 ) 2 )  " &#

4 
 " #6

!

 " $6$#

 4 8
 8  " 

 ' 0  
)  (
 ) 2 )  Ë



ÀÀÀ

  

|

 | 
 , 3  
¦A 
  
  
summarizing the cash receipts
and cash payments of the
business over the same time
period covered by the income
statement
ÀÀÀ

  

|

 | 
 &'()*+,



&-./ .0


.
.* 11

#%"22

 .-0-


 3

 +

Net Income 
Non-cash expenses, revenues, gains, and losses included in income: |
ºepreciation 
ºeferred taxes ()
Increase in accounts receivable ()
Increase in inventories 
Increase in accounts payable |
Increase in taxes payable ( )
Gain on sale of equipment
M

  


  
/ .-0-
 
 3

4
Acquisition of plant and equipment ( )
Proceeds from disposals of plant and equipment 
Purchase of investment securities ()
Proceeds from sales of investment securities 
Net cash used by investing activities
( )
/ .-0-
-  3


Proceeds of short-term debt |
Payments to settle short-term debt ()
Proceeds of long-term debt 
Payments on long-term debt ( )
Proceeds from issuing common stock 
ºividends paid ( )
Net cash provided by financing activities  
Net increase (decrease) in cash and cash equivalents 
Cash and cash equivalents at beginning of year 
|

 | |
Cash and cash equivalents at end of year #"
 * 
„ 
1. General Journal
2. General Ledger
3. xrial Balance
4. Úorksheet
5. Balance Sheet
6. Income statement
7. Statement of owners Equity
8. Statement of cash flow
ÀÀÀ

  

|

 | 
 More Information Please Refer
Books:
¦ M.A. Ghani, Principles of Accounting

¦ James C.Van Horne & John M. Úachowicz.JR,

Fundamentals of Financial Management.
Úebsites:
¦ www.businesstown.com

¦ www.onlinewbc.gov/docs/finance/index.html

¦ www.imstudies.vze.com

ÀÀÀ

  

|

 |