Accounting is considered as a scientific approach in maintaining record of business transactions.It provides a systematic accounting record to all on the financial status of the enterprise. No soonera business transaction takes place, the accounting process starts. The process is completed by thedrafting the final accounts. Final accounts include: 1) Manufacturing Accounts2) Trading Account3) Profit … Read more

In the previous chapter we have learnt that a Trial Balance is prepared to check the arithmeticaccuracy of transactions recorded in a Journal posting them into the ledger and balancing the ledgeraccount. If a Trial Balance agrees it is assumed that recording posting etc. have been done correctly.But this is only partly correct because even … Read more

In daily life, we use many assets which could be Tangible or Intangible. Such assets have theirown life e.g. Building, Furniture, Machinery, etc. It is necessary to spread the cost over a number ofyears during the useful life of the assets. This process of spreading the cost of fixed assets is termedas ‘Depreciation’. The word … Read more

Accounting Documents describes all the basic facts of transactions like the amount oftransaction, to whom the amount was paid, the purpose of transaction and the date of transaction.This is essential in the process of Book Keeping as it provides evidence that a financial transactionhas actually taken place. There has been a drastic change in the … Read more

A small business may be able to record all transactions in single Journal but as the businessexpands the number of transactions becomes so large, that the Journal is required to be sub-dividedinto Special Journals which are called Subsidiary Books. The sub division of Journal on the basis of nature of transaction is known asSubsidiary Books. … Read more