Basic Concepts of Accounting

Profit and loss allocation is crucial to a company’s long-term success. In other words, the P&L Appropriation Account is vital to a company’s success. Appropriation accounts are vital for businesses, particularly partnerships because they allow the net of expenditures and income to be distributed. Let’s dig a little deeper into the profit and loss statement […]

A trial balance is a statement to record the ledger balances of all the accounts corresponding to a particular business. It comprises two columns, namely credit and debit. Generally prepared at the end of the financial year, it is used to prepare monetary statements like profit or loss accounts or a balance sheet. The primary

Inventory is a critical current asset that impacts corporate performance and profits. It determines the cost of products sold and the worth of unsold products in storage. In simple words, when an enterprise prepares its financial statements, inventory valuation helps determine the value of unsold goods. The evaluated inventory is included in the financial accounts.

The method through which a corporation spreads the cost of an asset over its useful life is known as depreciation. Because an asset loses fair value in the market over time, the cost is spread out over several years. Depreciation is the word used for tangible assets, while amortisation is used for intangibles. The procedure

These documents are the first record regarding any detail of the business transactions. The source documents consistently report the date, time, amount, and nature of the transactions. In simple words, from the source documents of accountancy, the transactions are recorded in the books of accounts. These documents of accountancy provide authentic proof of the recorded

Introduction to the Single-entry system of bookkeeping Under the Single Entry system, a business transaction affects only one account where the account’s value either increases or decreases depending upon certain event transactions. This system uses only personal accounts of debtors and creditors and only a cash book that records the receipts and payments of the

A balance sheet is a financial statement. It summarises the financial position of a company or a person undertaking some business as defined under the Income Tax Act 1961. The Balance sheet reports the assets and liabilities of the company at a specific period. The period can be different for different entities, but generally, it

Specific organizations are established to provide services to their members and the community. Clubs, charitable institutions, schools, religious organizations, trade unions, welfare societies, and societies to promote art and culture are examples of such organizations. Service, rather than profit, is the primary goal of these organizations, as opposed to profit in the case of businesses.

The Income and Expenditure Account is a summary of all income and expense items for the current fiscal year. It is created to determine the surplus or deficit resulting from current incomes over current expenses. It is created in the same manner as the Trading and Profit and Loss Account of a trading company. A

Rectification of errors can be described as the procedure of revising mistakes made while recording the transactions. While recording a transaction, there are times when there are errors made by the bookkeeper due to common human negligence. These errors result in disruption in tally and unbalance of the final account. Therefore, the rectification of errors