Tag Archives: Accounting Standards

Comparison between Capital Expenditure and Revenue Expenditure

Difference between Capital Expenditure and Revenue Expenditure

Comparison between Capital Expenditure and Revenue Expenditure, check out difference between capital Expenditure and Revenue Expenditure. Capital Expenditure: This represents expenditure incurred for the purpose of acquiring a fixed asset which is intended to be used over long term for earning profits there from. e. g. amount paid to buy a computer for office use […]

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 […]

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 […]

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 […]

Types of Cash Book, How Many Types of Cash Book, Contra Entry

Types of Cash Book

Types of Cash Book: Cash book is the book in which all transactions concerning cash receipts and cash payments are recorded. Cash Book is in the form of an account. It serves the purpose of Cash Account also. On the debit side, all cash receipts are recorded while on the credit side, all cash payments […]

Accounting Cycle, Detail of Accounting Cycle, What is Accounting Cycle

Accounting Cycle

Accounting Cycle: When complete sequence of accounting procedure is done which happens frequently and repeated in same directions during an accounting period, the same is called an accounting cycle. Accounting cycle starts from the recording of individual transactions and ends on the preparation of financial statements and closing entries. The accounting cycle is the name given to the collective […]

Balancing Ledger Accounts, Check Ledger accounts balancing procedure

Balancing Ledger Accounts

Balancing Ledger Accounts: Balancing of an account means the process of equalizing the two sides of an account by putting the difference on the side where amount is short. After  Ledger Posting is completed the various accounts are balanced in order to know the exact position of a particular kind of transaction. Where the debit side of an account […]

Rectification of Errors | Stages of Errors | Need for Rectification of Errors

Rectification of Errors

Rectification 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 concern. It, therefore, becomes utmost […]