Rules of Debit and Credit:

10:44 PM imran ali

Ruels of debit and credit denote to the rules of debiting an account and crediting another of a transaction under double entry book-keeping system. There are following approaches for the rules of debit and credit.Rules of Debit and Credit on the Basis of Nature of Account:This approach is known as English or Dual Aspect Approach.a) Personal Account: Personal accounts are related to any person or organization. Mukesh Account, Bill Account, John Account, Swiss Bank Limited Account etc. are some examples of personal accounts. According to this account, the rules of debit and credit is: Debit the receiver Credit the gi...


Rules of Journalizing:

10:35 PM imran ali

We have already discussed that journalizing is a task of recording transactions in a journal. Before journalizing a transaction, following three steps must be minded.Firstly, we need to find out the two aspects or two fold effect of a transaction.Secondly, we need to identify the accounts whether they are personal, real or nominal accounts.Finally, we need to use the golden rules of debit and cred...


Objectives or Advantages of Journal:

6:52 AM imran ali

The following are some objectives of journal.It provides date-wise (chronological) records of all business transactions.It helps to prepare ledger account.It helps to understand the principles of double entry book-keeping system through the accounts to be debited and credited.It gives complete information at one place about each business transaction with narration.Ruling or Format of a Journal:A general format of the journal is as given below which has five columns.Each Column is discussed in detail as follows:Date: This is the first column of a journal which is meant for recording the date of transaction. All the transactions should be recorded...


Journal

6:39 AM imran ali

When any transaction takes place, it may be immediately noted down in a book which is known as memorandum book so that the transaction may not be forgotten. It is a just rough book and after it, a journal is prepared. A journal is also known as book of original entry which is a chronological record (in order of occurrence) of transactions according to double entry book-keeping system. In other words, it is subsidiary book meant for recording the day-t0-day transactions of a business in the order in which they take place.The word 'Journal' has come from a French word 'Jour' which denotes a 'day book'. Therefore, it also may be known as day book. The act of recording transactions in journal is called 'journalizing' and the record of a transaction in journal is called 'journal entr...


Continue......Terms of Doub........

5:49 AM imran ali

12. Profit:Profit is an economic gain arises from the sale of goods. When the goods is sold at higher price than its cost the difference is profit. In case of running business, the profit for the year is the excess of income over expenditures. Mathematically, it can expressed as: Profit = Incomes - Expenses13. Loss:The word refers to the excess amount of expenditures over incomes. When goods of $10,000 has been sold for $8,000 the difference $2,000 ($10,000 - $8,000) is a loss. Goods lost by fire, theft, accidents etc also included in it.14. Financial Transactions:Any exchange of goods or services for cash or credit by one person to another is a transaction. Those transactions that are related with money are financial transactio...


Continue...........Some Basic.........

6:37 AM imran ali

9. Purchase:Purchase of raw material either on cash or credit by a manufacturing concern for production and then sale is termed as purchase. In case of trading concern, goods purchased for resale purpose is known as purchase. If a bookshop purchases books and stationery, they are termed as purchases but if it acquires furniture, then that is not treated as a purchase because the furniture is non-trading goods for a bookshop.10. Sale:The word 'sale' denotes the exchange of goods or services for money either on cash or credit. However, it does not include the sale of assets like sales of old machinery and furniture.11. Stock:The term stock denotes to unsold goods lying in business. It also includes the unused raw material in production. Opening stock is the amount of goods in hand at the beginning...


Some Basic Terms of Double Entry System:

6:25 AM imran ali

4. Drawings:Money or value of goods belonging to business withdrawn by proprietor for his personal and domestic use is called drawing. It reduces the capital of the business.5. Revenue:Revenue is the sum of money received or to be received from the customers or clients of a business as a result of sale of them of goods or both. Income generated from the sale of goods, rent received, commission received etc. are some items of revenue. They are regular in nature.6. Expenses:Expenses include the cost of goods sold, amount paid for salary, rent, advertisement, insurance, wage etc. They are spent for generating future revenue. Expenses is the amount spent to produce and sell goods or services.7. Debtors:A person or an organization that owes money to the business mainly on account of credit sale...


Some Basic Terms of Double Entry System:

6:15 AM imran ali

1. Capital:The amount that is invested in the business by the propreitor is called capital. In other words, capital is the excess of assets over external liablilities. For example, if the total assets of business is $120,000 and the liabilities is $80,000, then the capital on that date would be Rs. 40,000 ($120,000-80,000). Sometimes, it is also called as net worth or owner's equity.2. Assets:Any property or possession of the business is known as assets. It also refers to the amount due on debtors. Plant, machinery, land, building, cash in hand, cash at bank, bills receivable, debtors, prepaid expenses, accrued income etc. are some of example of assets. The following are further classifications of assets:Current AssetsFixed AssetsTangible Fixed AssetsIntangible Fixed Assets3. Liabilities:Liabilities...


Inventory

6:06 AM imran ali

Assets whose purpose is for sale to customers are inventory. In a grocery store, food is inventory. Books and magazines are inventory. Cash registers are not inventory. Example A developer builds a tract of homes and puts them up for sale. Are those buildings fixed assets or inventory? Answer: inventory because their purpose is for sale to customers. For people live in those homes, they are fixed assets. Even though a homeowner may hope to sell it sometime down the road, he’s using the asset, not just holding it for sale. Inventory accounting shows up in two places in the financial statements. It is a current asset in the Balance Sheet. It is also a part ...


QuickBooks 2010................

5:53 AM imran ali

continue from QuickBooks 2010.........QuickBooks 2010 also helps small business owners gain valuable insights into how their business is performing so that they can make better decisions and increase profitability. New features to help customers improve their bottom line include:Company Snapshot: QuickBooks users can now create a customized report to display on their computer screen, getting an immediate view of their company’s bottom line. Previously, the Company Snapshot was a static view that could not be personalized. Users can choose from several reports, including new ones for yearly expenses and income comparisons, detailed expense and income breakdowns, and a top customer list. Plus, the reports can be changed instantly.Report Center: This radically re-designed report center...


5:53 AM imran ali

You know that when you take a brand new computer out of its box it is no longer as valuable as the price you paid for it. Fixed assets depreciate in value. The difference between what you bought an asset for and what is it now worth is depreciation.Depreciation is an expense. It is also a contra-account against fixed assets.ExampleThis is what the Fixed Assets section of a Balance Sheet might look like: The journal entry for this might have beenMachinery and Equipment $ 50,000Buildings 100,000Less: Accum. Dep. (20,000) =======Total Fixes Assets $130,000Depreciation Expense (debit) 5,000Accumulated Depreciation (credit) 5,000Tip - Jack’sMake only one journal entry for all your assets. Use only...


Depreciation

5:53 AM imran ali

You know that when you take a brand new computer out of its box it is no longer as valuable as the price you paid for it. Fixed assets depreciate in value. The difference between what you bought an asset for and what is it now worth is depreciation.Depreciation is an expense. It is also a contra-account against fixed assets.ExampleThis is what the Fixed Assets section of a Balance Sheet might look like: The journal entry for this might have beenMachinery and Equipment $ 50,000Buildings 100,000Less: Accum. Dep. (20,000) =======Total Fixes Assets $130,000Depreciation Expense (debit) 5,000Accumulated Depreciation (credit) 5,000TipMake...


Accounts Receivable and Accounts Payable

5:50 AM imran ali

Account receivable is an asset where as account payable is a liability. Account receivable represents money that customers owe you and on the other hands money that you owe for being a customer of somebody else is account payable.Both account receivable and account payable do not affect the cash balance but it affect to the net income of the company. These allow you to put money into the income statement without cash actually moving.When invoices are sent or received, then transactions are recognized.Example Assume: You get an invoice from the phone company. Book the amount as a debit to Telephone Expense and the credit to Accounts Payable. When you finally get around to paying the bill, book the debit to Accounts Payable instead of Telephone Expense. You don’t want the same bill expenses...


Accounts Receivable and Accounts Payable

5:20 AM imran ali

Normal 0 false false false MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman"; mso-ansi-language:#0400; mso-fareast-language:#0400; mso-bidi-language:#0400;} Account receivable is an asset where as account payable is a liability. Account receivable represents money that customers owe you and on the other hands money that you owe for being a customer of somebody else is account payable.Both account receivable...


NetSuite continue........

4:41 AM imran ali

NetSuite offers the industry’s first and only:• Built-in, customizable dashboards• CRM and ERP with integrated ecommerce• NetFlex Customization and extensionNetSuite features include:*• Customer Relationship Management- Sales Force Automation- Marketing Automation- Customer Support and Service- Incentive Management- Offline Sales Client- Partner Relationship Management• Financials/ERP- General Ledger- Accounts Receivable, Accounts Payable- Advanced Financials- Revenue Recognition- Budgeting- Multi-currency- Order Management and Fulfillment- Time and Billing- Purchasing- Inventory Management- Drop Shipment/Special Order- Integrated FedEx® Shipping Functionality- Integrated UPS OnLine® Shipping Tools- Standard, Customizable Reports•Ecommerce- Database Driven Web Site/Web Store- Front-...


Double Entry Book-keeping System

4:32 AM imran ali

Every debit must have a credit and vice versa. Example Assume you write a check for your monthly rent. You reduce cash and increase expenses. Credit cash; debit rent expense. Every transaction has to be analyzed with its impact on at least two accounts. Sometimes a transaction involves more than two accounts. Example You make a loan payment. Part of any loan payment is for interest and part is for principle. So one part of your check is debited to interest expense and the principal reduction is debited to loans payable. The two amounts added together equals the amount of your check which is credited...


Rules for Debit and Credit

5:47 AM imran ali

Debits are on the LEFT. Credits are on the RIGHT. Welcome to the obstacle course. Here’s where we’re going to put this concept to work. Assets are on the left. Got that? Debits are on the left. Whenever you code an entry to an asset account that increases the amount, you put the amount in the debit column. And yes, you over there, those assets include cash. If money is received, cash is debited. Not credited, DEBITED! Why? Because cash is an asset. Assets are on the left. Debits are on the left. Increases to assets are debited. For liabilities and the equity, it goes on the right side or credits are on the right. If you take out a loan, you will credit your...


Assets, Liabilities and Equity

6:50 PM imran ali

A short Discussion of Assets, Liabilities and Equity:Assets:Assets are those physical and non physical material which you own. Generally in balance sheet, assets are recorded on the left side. It is mainly categoried into two i.e. current and non-current assets.Current assets are those assets that can readily be converted to cash. Bank accounts are of course most readily convertible, but any assets that can be converted to cash within a short time are current assets. The short time for the current assets is taken as one year or less.Non-Current assets are further divided into fixed assets and other assets. Non-current assets are mainly intended for long period of time like machine, building, furniture etc. Such non-current assets may be sold in less than one year or is intended to help to...


Changes in Retained Earnings

6:43 PM imran ali

Retained Earnings can be charged in capital depending on the nature of company. It starts with the beginning balance and then shows the major elements that increased and decreased the equity during the period. Footnotes complete the required financial reporting packag...


The Cash Flow Statement

6:33 PM imran ali

The Cash Flow Statement compares net income to change in cash. It is greatly related to the transactions of cash. Generally there are two methods i.e. the direct method and indirect method. Indirect method is easier than the direct method. But we have to practice in both methods. Here both of the methods require a reconciliation between net income and net changes in cash. In this requirement, net income is at the top of the page and cash is at the bottom. All those things that account for the difference between the two amounts are listed in between.Example:Depreciation is an expense that reduces net income. However, no cash actually goes out of the bank account when it is recorded. Therefore it has to be added back to net income as part of the process of reconciling it to cash.In cash flow...


The Financial Statement

6:16 PM imran ali

Balance SheetBalance sheet shows the assets and liabilities of the concern. The difference between the two is the entity.Generally, assets are listed on the left side of the page where as the liabilities and equity are listed on the right side of the balance sheet. This is significant in understanding debits and credits. Liabilities and equity are always shown together which mean that if liabilities are greater than assets, then equity is negative.The main features and objectives of balance is to show the financial position of the concern at a specific time period say in fiscal year or financial year.Income StatementIncome statement shows the revenues and expenses of the company. the difference between the two is net income.Revenues and expenses are self explanatory. Many income statements...


Softrax Revenue Manager: Revenue Recognition for ERP

8:39 AM imran ali

KEY BENEFITSThe consolidation of revenue recognition activities into a single application allows companies using Softrax Revenue Manager to:* Lower their compliance risk* Achieve more accurate and consistent revenue recognition* Bring revenue into the normal close process* Get faster and more flexible revenue recognition reporting* Improve revenue recognition forecasting* Gain new insight into future revenue streams THE REVENUE COMPLIANT ENTERPRISESoftrax Revenue Manager enables companies to systematically support compliance with complex revenue recognition accounting guidance, including EITF 00-21, SOP 81-1, SOP 97-2, SOP 98-9, SAB 101/ SAB 104. With Softrax Revenue Manager, revenue recognition processes are inherently auditable down to the line item level. As a result, the basis...


A SHORT HISTORY OF ACCOUNTING AND BUSINESS

5:38 AM imran ali

The history of accounting is as old as civilization, among the most important professions in economic and cultural development, and fascinating. That’s right, fascinating! Accountants invented writing, developed money and banking, innovated the double entry book Fra Luca Pacioli keeping system that fueled the Italian Renaissance, were needed by Industrial Revolution inventors and entrepreneurs for survival, helped develop the capital markets necessary for big business so essential for capitalism, turned into a profession that brought Fra Luca Pacioli credibility for complex business practices that.............. continue from previous page........Accounting history is summarized in seven chapters. An overview places accounting in perspective. In some ways accounting hasn’t changed since Paciolli...


A SHORT HISTORY OF ACCOUNTING AND BUSINESS

4:44 AM imran ali

The history of accounting is as old as civilization, among the most important professions in economic and cultural development, and fascinating. That’s right, fascinating! Accountants invented writing, developed money and banking, innovated the double entry book v\:* {behavior:url(#default#VML);} o\:* {behavior:url(#default#VML);} w\:* {behavior:url(#default#VML);} .shape {behavior:url(#default#VML);} Normal 0 false false false MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0;...


Accounting History

4:19 AM imran ali

In the past years, the accounting is only related to recording system for banking services and tax collection. Due to commercial revolution, accounting is developed into modern double-entry booking system to serve the information needs of trading companies. The Accounting system of this age is to reveal continuing change to adapt to the economic changes. Similarly due to the industrialization and division of labor, the need of managerial accounting and cost behavior analysis is emerges. The rise of the modern corporations during the industrial revolution, with funding provided by outside owners, led to the development of periodic financial reporting. Accounting reflects the cultural, economic, legal, social and political conditions of the environment within which it operates. Accounting practices...


Pages 371234 »