Skip to main content

Common accounting terms

 Book keeping 
                                                                          Book keeping is a art where the part of accounting the process of recording financial transactions in a systematic manner and classifying them into ledger accounts termed as book keeping.

Process of financial transaction

• Identifying financial transactions and events .
• Measuring them in terms of money.
• Recording the indentifyed transactions in           books of accounts.
• classifying posting them into the ledger              accounts.
• Analysing and interpretation
• Communicating to the users.
Accounting is the art or is the primary consult recording, classifying, summering in a significant manner and in terms of money, transactions and events which are in part at least of financial character and interpret the results thereof.
Business transaction

The term business transaction means a financial transactions or event entered by the two parties and it will recorded in books of accounts.
Liability

Liability means such as amount which payable to the business or entity is known as the liability. Amount payable to the outsiders called external liability and amount payable to the Owners of the business called internal liability.

Assets 

An asset is a property or a legal rights owed by a business to which money value is included.
Assets are which will unable the firm to get the cash or other types of profitable advantage in future is an assets. 

Journal

All the business transaction are recorded in books  of account which is known as journal.
A journal is the primary books of accounts in which transaction are first recorded in chronological order as they entered into transaction. 
There are various types of journal where every particular business transaction recorded. Let say for example purchas of item goes to purchase journal, sales journal goes to sales journal etc. 

Ledger

A ledger may be defined as a book or a register which contains in a summerissed and classified form and a permanent record of all transactions. It is source where we get data for making trial balance. With the help of trial balance we able make financial statements of business organizations. 

Trial balance

The trial balance is the statement prepare with help of ledger accounts. It contains a Dr. And Cr. Columns. We generally use trial balance to know the airthmatical accuracy of the business operations or business transaction. All the heads are taken from the ledger accounts. It also provides information for building financial statements. It also provides summary of each accounts. If the trial balance doesn't match that means it occuring a airthmatical incorrection. 





Labels

Labels:

Comments

Post a Comment

Popular posts from this blog

How to implement Vat in tally ERP 9

Vat (value added tax) Value added tax also known as " VAT " is levied on products or goods at every stage of production , distribution of goods and services. when a person purchase and sell some goods and services then he have to pay some percentage of his profit in favour of government. If someone turnover is less then 5 lakh then it is not required to pay vat to govt. The value which is added in the nominal value of goods with profit is called vat. Meaning and concept of value added tax Vat is imposed on goods and services at export stage, import stage, manufacturing stage, wholesale and retail stage. Vat is applied for some specific goods and services. However in the year 2017, the goods and services tax (gst) has been introduced in place of all indirect taxes in India but there are some exceptional cases where value added tax "vat" has been implemented. Vat in India is computed on some particular goods and services. Vat example: Gold, silver, prec...
2 comments
Read more

How to download telly ERP 9 accounting software

Installation of telly ERP 9                                      The software is accompanied by installation package when run on the computer. The software setup and install carrying out defined instructions. This software can be downloaded from software providers and their website. How to install telly ERP 9 ( Download telly ERP 9 reales 6.6 series ) Step 1. After downloading software you can easily click on start option. Step 2 Enter the software data location where all data will save. Ex. Type <cd drive>: \ install. Step 3 press enter when you see the telly ERP 9 wizard screen. Step 4 click next to continue with the installation. The telly ERP 9 setup screen appears . 1. The program section check select telly ERP 9. 2. In telly ERP 9 setup section, you can accept the default directory and click next. 3. By default, India/SAARC appears in the country selection. S...
Post a Comment
Read more

Journal entries companies backbone

Journal entries concept Business transaction that can be measure in terms of money Will be recorded in the book of accounts on the basis of evidence such as bills of purchase, sales invoices, debit and credit notes etc. These books of accounts are majorly classified into two categories 1. Journal and 2. Ledger. Journal is a book in which transaction are recorded in the order in which they entered i.e. chronological order. All business transaction are first recorded in journal and after that it posted to the ledgers account. Ledger is known as principal book of accounts and all the important data and information can be obtained from this book. Definition According to "cropper", A Journal is a book, employed classify or sort out transaction in a form convenient for their user subsequent entry in ledger." Characteristics or features of a journal 1. Journal is book where original entry are first made before sending them to ledger accounts.  2. It is book whe...
Post a Comment
Read more