BOOK KEEPING AND ACCOUNTANCY

y DEFINATION - Book keeping is the Science and Art of correctly recording the books of account in all that business transaction that result in the transfer of money or money s worth . Book keeping is a must for.. 1) Business Enterprises: Small scale industries, partnership firm, limited companies ,co-operative society, public bodies like Life Insurance Co-operation Bombay, fort trust, public charitable institution like educational institution, hospital, clubs. 2) Investors: Investor having diversified investments. 3) Government Municipality Grampanchayats.

What is accounting? Accounting is Art of recording, classifying and summarising in a significant manner in terms of money, transactions and events which are, in part at least of a financial character and interpreting the results there of . Person interested in accounting 1) 2) 3) 4) 5) y The creditors of the business that is the suppliers. The employees of the business. The lenders of the business that is bank [Financial Institute]. The Government. The consumer or the general public. Capital

Trader has his own assets and also liabilities to pay he has properties like goods, bank balance and debtor. Similarly he has to pay creditors. These are his liabilities. When assets are more than liabilities the difference are called capital. Capital is excess of assets over liabilities FORMULA Capital= Assets-Liabilities y Golden Rules of Debit And Credit: Personal Account Real Account Nominal Account Debit the receiver Credit the giver Debit what comes in Credit what goes out Debit all expenses and losses Credit all incomes and gains

Goods Goods are commodities which are bought and sold by a trader. Furniture dealer purchases and sales furniture. For him furniture is goods. But if a business man purchases furniture for its office use. Then furniture is an asset other than goods. On the other hand businessman purchases furniture for his own residence it becomes his drawings. Ledger A ledger account has two side left and right hand side. Left hand side is known as debit and right hand side is known as credit. All the accounts are kept in one book which is known as ledger. A ledger is a book secondary entry. All the transaction recorded in the journal are posted in the ledger. DATE PARTICULARS J/F AMOUNT DATE PARTICULARS J/F AMOUNT

TRADING ACCOUNT FOR THE YEAR ENDED

Debit DATE

.
Credit AMOUNT XX XX XX XX XX XXX_

PARTICULARS To opening stock To cost of production

AMOUNT XX XX

DATE

To Gross Profit

XX XXX__

PARTICULARS By sales XX Less: Return XX By goods distributed (as free sample) By goods withdrawn by proprietor By Closing Stock By Gross Loss