Book keepingaccounting

Transaction

• There are two aspects of a transaction:

Transaction

Debit credit

(Dr.) (Cr.)

Types of accounts

• There are three types of A/C’s

personal real nominal

individuals assets income & exp.

Rules of classification of Dr./Cr.

personal a/c:Dr. the receiverCr. The giver

Real a/c:Dr. what comes inCr. What goes out

Nominal a/c:Dr. all expenses & lossesCr. All incomes & gains

Book keeping process

1 Transactions are classified and a voucher is passed with Dr. & Cr. Heads.

2 The voucher is recorded in the books of prime entry.

(cash book, pur. Book, sales book, journal)

3 posting into genral ledger.

4 trial balance

5 Trading & profit & loss a/c.

(all the nominal a/c’s are taken in P&l a/c)

6 balance sheet

( all the real and personal a/c’s are taken in B/S)

Example: journal1. Cash introduced by x as capital

Cash a/c Dr. 20000

To capital a/c 20000

( being cash introduced)

2. Purchased goods worth 15000 out of which 5000 was paid to x as cash & remaining 10000 on credit.

Purchases a/c Dr. 15000

To cash a/c 5000

To Mr. x a/c 10000

( being goods purchased)

3. Sold goods purchased for a sum of 19000. out of which 4000 was received as cash & 15000 sale were given on credit.

Cash a/c Dr. 4000

Y a/c Dr. 15000

To sales 19000

( being goods sold)

4. Paid rent of shop 2000.

Rent a/c Dr. 2000

To cash a/c 2000

(being rent paid)

5. Purchase furniture worth Rs. 3000

Furniture a/c Dr. 3000

To cash 3000

(Being furniture purchased)

Ledger a/c’sCash a/c

To capital a/c 20000 By purchases a/c 5000

To sales a/c 4000 By rent a/c 2000

By furniture a/c 3000

By balance c/d 14000

24000 24000

To balance c/d 20000 By cash 20000

20000 20000

Purchase a/c

To cash 5000 By balance c/d 15000

To x 10000

15000 15000

Sales a/c

By cash 4000

capital a/c

To balance c/d 19000 By y 15000

19000 19000

Mr. x

To balance c/d 10000 By purchases 10000

10000 10000

Mr. y

To sales 15000 By balance c/d 15000

15000 15000

Rent a/c

To cash 2000 By balance C/d 2000

2000 2000

Furniture a/c

To cash 3000 By balance c/d 3000

3000 3000

Trial balanceTrial balance

Dr. Cr.

Cash a/c 14000

Capital a/c 20000

Purchases a/c 15000

Sales a/c 19000

Mr. x a/c 10000

Mr. y a/c 15000

Rent a/c 2000

Furniture a/c 3000

49000 49000

Profit and loss a/cP&l a/c

To purchases 15000 By sales 19000

To rent 2000

To profit (transfer to capital a/c)

2000

19000 19000

Balance sheetB/S

liabilities assets

Capital a/c 20000 Cash a/c 14000

+ profit 2000 22000 Mr. y (debtor) 15000

Mr. x (creditor) 10000 furniture 3000

32000 32000