Tag Archives: Accounting Knowledge

Capital Losses and Revenue Losses, Detail of Capital and Revenue Losses

Capital Losses and Revenue Losses

The loss suffered by a company on the sale of fixed assets, The loss suffered by the business in the ordinary course of business is called revenue loss. Capital and Revenue Losses: Revenue losses are the losses which arise during the normal course of business whereas capital losses are those which occur when selling fixed […]

Rules of Debit and Credit, The Concept of Debit and Credit Entries

Rules of Debit and Credit

Rules of Debit and Credit: The left hand side of an account is called the debit side; while the right hand side is called the credit side. An entry on the left side of an account is called a debit entry, or merely a debit, an entry on the right side is called a credit […]

Difference between Capital Receipts and Revenue Receipts

Difference between Capital Receipts and Revenue Receipts

Difference between Capital Receipts and Revenue Receipts: Receipts which are not of revenue nature are capital receipts.The Receipts which are not received now and then can be treated as capital receipt. The distinction of transaction into revenue and capital is done for the purpose of placing them in Profit and Loss account or in the […]

Capital Receipts and Revenue Receipts, Check out Major Difference

Capital Receipts and Revenue Receipts

Capital and Revenue Receipts: Capital receipts comprise of payments or contributions into the business by the proprietor, partners or companies towards the capital of the firm and also any sum received from debenture-holders, any loans and the proceeds of sale of any fixed assets of a business enterprise. Capital Receipts – Govt receipts which either create liability […]

Steps to Locate Errors | Rectification of Errors, Errors in Trial Balance

Steps to Locate Errors

Steps to Locate Errors: Even if there is only a very small difference in the trial balance, the errors leading to it must be located and rectified. A small difference may be the result of a number of errors. The following steps will be useful in locating errors: Whenever there is a difference in the trial […]

Trial Balance: features, objectives, methods of preparing the trial balance

Petty Cash Book

Trial Balance methods: A trial balance is a schedule or list of debit and credit balances extracted from various accounts in the ledger including cash and bank balances from cash book. Since every transaction has a dual effect i.e. every debit has a corresponding credit and vice versa, the total of the debit balances and […]

Role of Accountant : Maintenance of Books of Accounts by Accountant

Role of Accountant

Role of Accountant: An accountant performs financial functions related to the collection, accuracy, recording, analysis and presentation of a business, organization or company’s financial operations. An accountant has several roles and responsibilities to meet in their job, both in terms of their competence at carrying out accounting practices as well as their ethics and approach […]

Classification of Errors, Types of Errors (Clerical Errors, Errors of Commission)

Classification of Errors

Classification of Errors or Types of Errors: Every concern is interested in ascertaining its true profit and financial position at the close of the trading year. But inspite of the best efforts of the book-keeper and the accountant certain errors are committed in the recording of the transactions which affect the final accounts of the […]

Petty Cash Book, Imprest System of Petty Cash (Advantages)

Petty Cash Book

Petty Cash Book: Payments in cash of small amounts like traveling expenses, postage, carriage etc. are petty cash expenses. These petty cash expenses are recorded in the petty cash book. The petty cash book is maintained by separate cashier known as petty cashier. The firm may adopt Imprest System of maintaining petty cash. The petty cashier […]

Capital Profit and Revenue Profit, (check out detailed difference)

Capital Profit and Revenue Profit

Capital Profit and Revenue Profit: Capital profit which is earned on the sale of the fixed assets, The profit which is earned during the ordinary course of business is called revenue profit. Following are the main differences between capital profit and revenue profit. Capital profit is earned by selling assets, shares and debentures at a price more than their book […]