Accounting1.ppt

7/21/2019 Accounting1.ppt

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Accounting forAccounting for

Managers -Managers -IntroductionIntroduction

RaghavendraRaghavendraM.B.A, M.Phil., P.G.D.I.T, (Ph.D)M.B.A, M.Phil., P.G.D.I.T, (Ph.D)

enior Asst. Professorenior Asst. ProfessorMIT!MIT!


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"ournal"ournal

Derived fro# $"our%, a &rench 'ord,Derived fro# $"our%, a &rench 'ord,

#eaning $ a da%#eaning $ a da%

"ournal *edger Trial Balance-"ournal *edger Trial Balance-

Annual Re+orts- ash &lo' and &undAnnual Re+orts- ash &lo' and &und

&lo' tate#ents&lo' tate#ents


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lassication of Accountslassication of Accounts

Personal AccountsPersonal Accounts

Real AccountsReal Accounts

o#inal Accountso#inal Accounts


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Personal AccountPersonal Account

a#es of Persons, co#+anies etc.a#es of Persons, co#+anies etc. Ex: Rajan A/c, Ganesh A/c, Canara Bank A/c,Ex: Rajan A/c, Ganesh A/c, Canara Bank A/c,

Capital A/c, Drawings A/c, ABC td! A/c etc!Capital A/c, Drawings A/c, ABC td! A/c etc!

D!BIT T/! R!!I0!RD!BIT T/! R!!I0!R

R!DIT T/! GI0!RR!DIT T/! GI0!R


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Real AccountReal Account

Assets and *ia1ilitiesAssets and *ia1ilities Ex: Cash, "achiner#, $urniture, %ehicles, De&tors,Ex: Cash, "achiner#, $urniture, %ehicles, De&tors,

B/R, Creditors, oans, B/', 'urchases, (ales,B/R, Creditors, oans, B/', 'urchases, (ales,

'urchase returns and (ales Returns etc!'urchase returns and (ales Returns etc!

D!BIT 2/AT 3M! ID!BIT 2/AT 3M! I

R!DIT 2/AT G3! 34TR!DIT 2/AT G3! 34T


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o#inal Accountso#inal Accounts

Accounts relating to e5+enses andAccounts relating to e5+enses and

inco#esinco#es Ex: (alar#, rent, telephone charges, stationar#,Ex: (alar#, rent, telephone charges, stationar#,

carriage, wages, co))ission, discount etc!carriage, wages, co))ission, discount etc!

D!BIT A** !6P!! AD *3!D!BIT A** !6P!! AD *3!

R!DIT A** I3M! AD GAIR!DIT A** I3M! AD GAI


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te+s in "ournalisingte+s in "ournalising

Identif the 7 as+ects (accounts) of aIdentif the 7 as+ects (accounts) of a

transactiontransaction

&ind out 'hether the accounts are&ind out 'hether the accounts are

Personal A8c, Real A8c or o#inalPersonal A8c, Real A8c or o#inal

Accounts.Accounts.

A++l the rules for these accounts,A++l the rules for these accounts,

nd out $De1it% and $redit% entriesnd out $De1it% and $redit% entries

Ma9e the :ournal entrMa9e the :ournal entr


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Points to 1e consideredPoints to 1e considered

Regarding salar, co##ission etc. +aid to aRegarding salar, co##ission etc. +aid to acertain +erson, recording the# under salar orcertain +erson, recording the# under salar orco##ission is a++ro+riate than recording in theirco##ission is a++ro+riate than recording in their+ersonal na#es.+ersonal na#es.

Purchase a8c includes +urchase of Goods onl, i.ePurchase a8c includes +urchase of Goods onl, i.ethose ite#s 1ought for the +ur+ose of selling later.those ite#s 1ought for the +ur+ose of selling later.Those ite#s +urchased for o'n use, or assetsThose ite#s +urchased for o'n use, or assets+urchased do not co#e under Purchases A8c, as+urchased do not co#e under Purchases A8c, asthe are +urchased not for sale.the are +urchased not for sale.

2hen he;ues are received, the are treated as2hen he;ues are received, the are treated ascash received. 3nl 'hen these che;ues arecash received. 3nl 'hen these che;ues arede+osited into Ban9, does the 1an9 1alance getsde+osited into Ban9, does the 1an9 1alance getsa


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=>>> "ul =? Mr. Ra#esh started 1usiness 'ith a ca+ital ofRs.7,@@,@@@

"ul 7? De+osited into Ban9 Rs.,@@@ "ul 7? Purchased goods 'orth Rs.7,@@@ 1 +aing cash

"ul C? Purchased goods fro# Mr.Mahesh for cashRs.=@,@@@

"ul ? Purchased goods fro# Mr. Rahul on credit Rs.,@@@ "ul ? Machiner +urchased Rs.7@,@@@ "ul =@? old goods to Rahi# Rs.,@@@

"ul =C? Received a che;ue fro# Rahi# for the fulla#ount due. This che;ue 'as de+osited into 1an9 thene5t da.

"ul =? alar +aid Rs.=@@ "ul =? It 'as found that Rahi#%s che;ue 'as

dishonoured. "ul =>? ash sales Rs.,@@@ "ul 7C? Received a che;ue fro# Rahi# for Rs.@@,

discount Rs.@@ "ul 7? Paid rent of the 1uilding 1 cash Rs.=@@@.


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The following transactions were noticed in the books of Mr. Mohan:

2012 January 3 : Mohan started business with Rs.1,00,000 cash, Rs.0,000 !urniture

and Rs.",000 #ehicles

$: %urchased new furniture costing Rs.20,000 fro& Ra' (td

. %urchased goods Rs.30,000 fro& )nil. *ut of this, Rs.10,000 was +aid by cash

i&&ediately.

. -old goods costing Rs.10,000 to Reh&an for Rs.,/00 in full settle&ent.

. ae a cheue to Ra' (td. for the a&ount due.

/. -old goods to )run Rs./000 and receied cheue. This cheue was de+osited intobank the sa&e day.

. )lbert, a custo&er, directly de+osited into our bank account Rs.,000

1. t was found that )run4s cheue was dishonoured, bank charges Rs.0

1/. -ettled )nil4s account. 5e allowed us a discount of 10 6.

20. 7ithdrew Rs.10,000 fro& bank for office use.22. 7ithdrew Rs.000 fro& bank for +ersonal use.

2$. ntroduced additional ca+ital into business Rs.$0,000

Enter the above transactions in their respective ledger accounts. Also prepare

Trial Balance.


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From the following transactions in the books of Mahesh,

prepare Cash account:

7@== e+te#1er =? tarted 1usiness 'ith Rs.,@@,@@@e+t 7? 3+ened a savings account 'ith anara Ban9, Mangalore

e+t C? Purchased 1uilding Rs.7,@@,@@@ and &urniture Rs.@,@@@

e+t ? De+osited Rs.=,@@,@@@ into 1an9

e+t =@? Purchased goods Rs.@,@@@ fro# AB *td. 3ut of this,Rs.7@,@@@ 'as +aid in cash i##ediatel.

e+t. =? ettled the dues of AB *td 1 che;ue

e+t. 7@? ash sales Rs.7@@@@

e+t 7? 3ut of the goods sold on e+t 7@, goods costingRs.7,@@@ 'as returned to Mahesh

e+t. E@ ? 2ithdre' Rs.E@@@ fro# 1an9 for oFce use and Rs.7@@@

fro# cash 1alance for +ersonal use.


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The following transactions were reported by a

businessman:

= A+ril 7@@7? 3+ening cash 1alance Rs.7,7@@, 1an9 1alance

Rs.@@

A+ril C? old goods Rs.,@@ and received a che;ue. This

che;ue 'as de+osited into our 1an9 account i##ediatel.

A+ril >? Received fro# Das Rs.,@@@ in full settle#ent of his

account. (Actual a#ount due Rs.7@@)

A+ril =@? Gave Rs.,@@@ to Rahi# (Actual a#ount due Rs.,E@@)A+ril =7? &urniture +urchased and +aid 1 che;ue Rs.,@@

A+ril =? Paid carriage Rs.7@@

A+ril =? A dividend of Rs.@@ 'as directl credited to our 1an9

account.A+ril 7@? 2ithdre' fro# 1an9 Rs.7,@@@

A+ril 7? Paid 'ages Rs.=,@@

A+ril 7? Paid Ghosh Rs.=,@@@ 1 che;ue.

Draft cash account, bank a/c and discount account torecord the above transactions

f " hith


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of "arshitha:

7@@> A+ril =? 3+ening 1alance? ash Rs. ,@@@ Ban9 Rs.E@@@

A+ril E ? Purchased goods and +aid 1 che;ue Rs.=@@@

A+ril C ? ash sales Rs.@@

A+ril ? De+osited Rs.E@@ into 1an9A+ril ? Received fro# Halinga Rs.C@@, in settle#ent of his account

1alance of Rs.C=@

A+ril =7? 2ithdra'n Rs.@

A+ril =? Paid Hanchana Rs.=@@@ 1 che;ue in settle#ent of her

account, discount allo'ed 1 her Rs.=@

7@? he;ue received fro# Hasha+ Rs.7. This che;ue 'as endorsed

to Hada#1ari the ne5t da

7E? Received fro# Hinara Rs.E@@ on account, discount allo'ed Rs.

7>? A che;ue of Rs.C@@ 'as received fro# Heerthan in settle#ent ofhis account 1alance of Rs.C=@. This che;ue 'as de+osited into 1an9

the sa#e da.

E@? It 'as found that Heerthan%s che;ue 'as dishonoured. Ban9

charges Rs.@

E@? Ban9 credited our account 'ith Rs.E@@ as interest.

Accounting1.ppt

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