Accounting: It is an art of recording, classifying and summarizing in significant manner and in terms of money, transactions and events which are of financial character and interpreting the results thereof.
Business transaction: A business transaction is “The movement
of money and money’s worth form one person to another”. Or exchange of values
between two parties is also known as “Business Transaction”.
Purchase: A purchase means goods purchased by a
businessman from suppliers.
Sales: Sales is goods sold by a businessman to
his customers.
Purchase Return or Rejection in or
Outward Invoice: Purchase return means the return of the
full or a part of goods purchased by the businessman to his suppliers.
Sales Return or Rejection out or Inward
Invoice: Sales
return means the return of the full or a part of the goods sold by the customer
to the businessman.
Assets: Assets are the things and properties
possessed by a businessman not for resale but for the use in the business.
Liabilities: All the amounts payable by a business
concern to outsiders are called liabilities.
Capital: Capital is the amount invested for
starting a business by a person.
Debtors: Debtor is the person who owes amounts
to the businessman.
Creditor: Creditor is the person to whom amounts
are owed by the businessman.
Debit: The receiving aspect of a transaction
is called debit or Dr.
Credit: The giving aspect of a transaction is
called credit or Cr.
Drawings: Drawings are the amounts withdrawn
(taken back) by the businessman from his business for his personal, private and
domestic purpose. Drawings may be made in the form cash, goods and assets of
the business.
Receipts: It is a document issued by the receiver
of cash to the giver of cash acknowledging the cash received voucher.
Account: Account is a summarized record of all
the transactions relating to every person, every thing or property and every
type of service.
Ledger: The book of final entry where accounts
lie.
Journal
entries: A daily record of transaction.
Trail Balance: It is a statement of all the ledger
account balances prepared at the end of particular period to verify the
accuracy of the entries made in books of accounts.
Profit: Excess of credit side over debit side.
Profit and loss
account: It is prepared to ascertain actual
profit or loss of the business.
Balance
Sheet: To ascertain the financial position of
the business. It is a statement of assets and liabilities.
Types of accounts
Personal account: Personal
accounts are the accounts of persons, firms, concerns and institutions which
the businessmen deal.
Principles: Debit
the receiver
Credit
the giver
Account: These
are the accounts of things, materials, assets & properties. It has physical
existence which can be seen & touch.
Ex. Cash, Sale, Purchase,
Furniture, Investment etc.
Principles: Debit
what comes in
Credit
what goes out
Nominal account: Nominal
account is the account of services received (expenses and Losses) and services
given (income and gain)
Ex. Salary, Rent, Wages, Stationery
etc.
Principles: Debit
all expense/losses
Credit
all income/ gains
Tally
7.2
Tally
is a complete business solution for any kind of Business Enterprise. It is a
full fledged accounting software. Ba
