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ACCOUNTING

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by

zarmeen saleem

on 29 October 2015

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Transcript of ACCOUNTING

System to
record
,
report
, and
analyze
financial transactions of a business.
ACCOUNTING
How do we do it?
ACCOUNTING CYCLE
T-account displays the balances in each account.
General Ledger / T-Accounts
BASIC CONCEPTS
ACCOUNTING
GENERAL ENTRIES, LEDGER, TRIAL BALANCE
GENERAL JOURNAL
Transaction #1:
On December 1, 2014, Mr. Donald Gray started Gray Electronic Repair Services by investing $10,000.
A list/statement/worksheet of all the account balances.
TRIAL BALANCE
By. Zarmeen Saleem
R.no. 1539109

Why we do it?

Bookkeeping.

Measured & Predict.
Decision Making.
Track

(who owes you what, what you owe to who ? )
Collect all the source document.
receipts, bank statements, checks,
and purchase order
what effect they have had on company accounts.
post entries into the journal
for the analyzed transactions
These accounts are broken down
by account number and class
The total debit balance &
total credit balance
must be equal.
Prepare adjusting entries,
list of all accounts &
their balances after
adjustments have been
made.
specific order because
information from one
financial statement to
prepare
another
This involves shifting the balances
to the retained earnings account, period.
Every Transaction is recorded into two accounts
ASSETS

Economic Resources own by the business.
Or
Resources controls with the expectation that it will provide future benefit.
LIABILITIES
CAPITAL
REVENUE
EXPENSE
Liabilites are Debts
or
It represent as -ve future cash flows for the enterprise
(a sum of money that is owed or due)
Accounts Payable
Notes Payable
Accrued Expense
Unearned Revenue
The prson to whom
debt is own is said
CREDITOR
Amount or asset which is invested in business by businessman or owner of business.
In
Sole proprietorship business, the capital is called
Owner's Equity or Owner's Capital.

Partnerships, it is called
Partners' Equity or Partners' Capital.

Corporations,
Stockholders' Equity.
Amounts that a business earns from selling goods or providing services to its customers.

Examples:
Service Revenue.
Professional Fees.
Rent Income.
Interest Income.
Sales.
Cost that occurs as part of a company's operating activities during a specified accounting period.
The cost of goods sold
rent for the retail space
the cost of the electricity used
advertising that took place
wages and salaries that were incurred, etc.
Key Points.
1. Double-entry accounting, each transaction affect two accounts.
2. Understand the Description.
3. Mention Date in 1st column.
4. Write Explanation of each account in 2nd column.
5. If the entry is of credit account, write in credit column (Right side)
6. If the entry is of Debit account, write in Debit column (left side)

Let's Start......
Transaction #2:

On December 7, the company acquired service equipment for $16,000. The company paid a 50% down payment and the balance will be paid after 60 days.
Transaction #3
On December 9, the company received $1,900 for services rendered.
Transaction # 4
Transaction # 5
On December 29, the company paid rent for , $ 1,500.
On December 31, the company paid salaries to its employees, $3,500
Key points:
1. Journal entry is transferred from the general journal.
2. The debits are always transferred to the left side.
3. The credits are always transferred to the right side.
4. After entering data, recognize either it is credit balance or debit balance
T -Accounts
It is an important base for the preparation of the final accounts.
It's prepared:
1. To check the Acuracy of postings made in Ledger Accounts.
2. By comparing the trial balances of various period, certain important
changes in different figures can be notifies and its analysis can be made.
3. It helps in locating errors by providing a starting point for the location
of errors committed if any.
Thank you for your concentration..
Full transcript