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Segment 3 Accounting Process: A Manipal Group Institution
Segment 3 Accounting Process: A Manipal Group Institution
INSTITUTION
Segment 3
Accounting Process
A MANIPAL GROUP
INSTITUTION
Income Statement
Accounting
Process
Cash flow
statement
Balance sheet
Accounting
A MANIPAL GROUP
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Accounting
A MANIPAL GROUP
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Recording:
Recording various financial transactions in a
systematic manner
Classifying:
The process of grouping of transactions or
entries of one nature at one place. Ex
purchase a/c, sales a/c, cash a/c, building
a/c etc.
Summarizing:
Presenting the activities of business in an
understandable manner through profit & loss
a/c and balance sheet.
Recording of Transactions
Single Entry
System
Single Entry System
1
2
3
4
5
6
7
8
9
10
A MANIPAL GROUP
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Double Entry
System
Double Entry System
1
2
3
4
5
6
7
8
9
10
Debit
Credit
A MANIPAL GROUP
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A MANIPAL GROUP
INSTITUTION
A MANIPAL GROUP
Classification of accounts
INSTITUTION
Personal
accounts
Nominal
accounts
Real
accounts
Impersonal accounts
Individual
transactions
Property
transaction
Income
expenses
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Personal account
Natural
Persons
Artificial
Persons
Impersonal account
Representative
Persons
Real
Furniture
Plant
Machinery
cash
Nominal
rent
salary
interest
A MANIPAL GROUP
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Illustration 1
From the following transactions find out the nature of account
S.no Transactions
Accounts involved
Nature of Accounts
1
Rend paid
Salaries paid
Interest recieved
Furniture purchased
Machinery sold
Paid to Suresh
A MANIPAL GROUP
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Illustration 1
From the following transactions find out the nature of account
S.no Transactions
Accounts involved Nature of Accounts
1Rend paid
Rent a/c
Cash a/c
2Salaries paid
Salary a/c
Cash a/c
3Interest recieved
Interest a/c
Cash a/c
4Furniture purchased Furniture a/c
Cash a/c
5Machinery sold
Machine a/c
Cash a/c
6Paid to Suresh
Suresh a/c
Cash a/c
Received from
7 Mohan
Mohan a/c
Cash a/c
A MANIPAL GROUP
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Illustration 1
From the following transactions find out the nature of account
S.no Transactions
Accounts involved
Nature of Accounts
1Rend paid
Rent a/c
Nominal a/c
Cash a/c
Real a/c
2Salaries paid
Salary a/c
Nominal a/c
Cash a/c
Real a/c
3Interest recieved
Interest a/c
Nominal a/c
Cash a/c
Real a/c
4Furniture purchased
Furniture a/c
Real a/c
Cash a/c
Real a/c
5Machinery sold
Machine a/c
Real a/c
Cash a/c
Real a/c
6Paid to Suresh
Suresh a/c
Personal a/c
Cash a/c
Real a/c
7Received from Mohan Mohan a/c
Personal a/c
Cash a/c
Real a/c
A MANIPAL GROUP
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Real account
Debit what comes in and credit what goes out
Nominal account
Debit all losses and expenses
Credit all gains and income
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Journal
Ledger
Trial Balance
Financial
Reports
Journal
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JOURNAL FORMAT
Date
Particulars
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L.F
Debit
Credit
A MANIPAL GROUP
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A MANIPAL GROUP
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Capital a/c
Personal a/c
Personal account
Debit the Receiver and Credit the
giver
Capital a/c to be Credited
Cash a/c
Real a/c
Real a/c
Debit what comes in and Credit what
goes out
Cash a/c to be debited
Journal
A MANIPAL GROUP
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Particulars
Cash a/c
L.F
Dr
To Capital a/c
Debit
Credit
40,000
40,000
A MANIPAL GROUP
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Bank a/c
Personal a/c
Personal account
Debit the Receiver and Credit the
giver
Bank a/c to be Debited
Cash a/c
Real a/c
Real a/c
Debit what comes in and Credit what
goes out
Cash a/c to be Credited
Journal
A MANIPAL GROUP
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Particulars
Bank a/c
To Cash a/c
L.F
Dr
Debit
Credit
2,000
2,000
A MANIPAL GROUP
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Purchase a/c
Real a/c
Real a/c
Debit what comes in and Credit what
goes out
Purchase a/c to be Debited
Cash a/c
Real a/c
Real a/c
Debit what comes in and Credit what
goes out
Cash a/c to be Credited
Journal
A MANIPAL GROUP
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Particulars
Purchase a/c
To Cash a/c
L.F
Dr
Debit
Credit
15,000
15,000
A MANIPAL GROUP
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Sales a/c
Real a/c
Real a/c
Debit what comes in and Credit what
goes out
Sales a/c to be Credite
Cash a/c
Real a/c
Real a/c
Debit what comes in and Credit what
goes out
Cash a/c to be Debited
Journal
A MANIPAL GROUP
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Particulars
Cash a/c
To Sales a/c
L.F
Dr
Debit
Credit
6,000
6,000
A MANIPAL GROUP
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Ledger
A MANIPAL GROUP
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Ledger
The second step in the accounting process is to transfer the
entries recorded in the general journal into the relevant
accounts in the general ledger.
This procedure is called posting.
Ledger
A MANIPAL GROUP
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A MANIPAL GROUP
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Format of Ledger
Date - This column contains the date of each transaction.
Reference - An appropriate reference number is entered
into this column. This number may refer to the relevant
page number or transaction number in the general
journal. It may also be used to enter the number of the
invoice, receipt or any other supporting document.
Description - A description of the underlying transaction
is provided in this column.
Amount - This column contains the amount for the entry.
A MANIPAL GROUP
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A MANIPAL GROUP
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A MANIPAL GROUP
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A MANIPAL GROUP
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A MANIPAL GROUP
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Trial Balance
A MANIPAL GROUP
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Trial Balance
The trial balance is a record of all the accounts and their net balances
at the end of a reporting period.
A trial balance can be illustrated as follows:
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A MANIPAL GROUP
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