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 … Read more
Double Entry System of book-keeping has emerged in the process of evolution of various accounting techniques. It is the only scientific system of accounting. According to it, every transaction has two-fold aspects debit and credit and both the aspects are to be recorded in the books of accounts. For example, if a business acquires something … Read more
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 … Read more
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 … Read more
Suspense Account: When a trial balance does not agree, efforts are made to locate errors and rectify them. However, if reason for disagreement of trail balance cannot be found, a new account called suspense account is opened in order to give trial balance an appearance of agreement. Then final accounts are prepared. Debit balance in … Read more
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 … Read more
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 … Read more
Accounts and its Classification (Accounts Classification): The business transactions are recorded in accounts. An account is an individual record of a person, firm, or thing, an item of income or an expense. An account is prepared for each type of asset, liability, owner(s) equity, revenue and expense. For example, the account of cash would show the … Read more
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 … Read more
Revenue Expenditure: Expenses whose benefit expires within the year of expenditure and which are incurred to maintain the earning capacity of existing assets are termed as revenue expenditure. Amounts paid for wages, salary, carriage of goods, repairs, rent and interest, etc., are examples of revenue-expenditure. Depreciation on fixed assets is also a revenue-expenditure. To the extent … Read more
Advantages of Accounting: These advantages usually coincide with the ability for companies to improve operations and overall profitability. Business owners can also create a competitive advantage by developing cost allocation processes in their management accounting function. The Business is an economic activity undertaken with the motive of earning profits and to maximize the wealth for … Read more
5 Key Factors to Consider While Choosing an Accounting Software. How to Choose Accounting Software. Do you run a small business? Are you planning to switch from traditional bookkeeping practices to using a business accounting software? While almost every business has benefited greatly from employing accounting software, there are few factors that you should consider … Read more