COURSE CONTENT
Accounting is the process of recording, summarizing, and analyzing financial transactions to ensure accurate financial reporting and decision-making. It helps businesses track income, expenses, assets, and liabilities, providing a clear picture of financial health. Essential for compliance and strategy, accounting is the foundation of sound financial management. .
Accounting Types: Includes financial, managerial, cost, and tax accounting, each serving specific purposes like reporting, decision-making, cost control, and compliance. Heads of Accounts: Major categories like assets, liabilities, equity, income, and expenses, organizing financial transactions for clarity and reporting. Ledgers: Detailed records of all financial transactions, categorized by account heads, ensuring accuracy and traceability. Groups: Collections of similar accounts (e.g., current assets, fixed liabilities) for streamlined financial analysis and reporting.
In accounting, vouchers are documents used to record transactions. Common types include: Payment Voucher: Records cash or bank payments. Receipt Voucher: Documents cash or bank receipts. Journal Voucher: Adjusts non-cash transactions like depreciation. Sales Voucher: Records sales transactions. Purchase Voucher: Documents purchase of goods/services. Contra Voucher: Tracks cash-bank transfers. Essential for accurate financial tracking
In accounting, vouchers are documents used to record transactions. Common types include: Payment Voucher: Records cash or bank payments. Receipt Voucher: Documents cash or bank receipts. Journal Voucher: Adjusts non-cash transactions like depreciation. Sales Voucher: Records sales transactions. Purchase Voucher: Documents purchase of goods/services. Contra Voucher: Tracks cash-bank transfers. Essential for accurate financial tracking
Books of accounts are essential records for tracking financial transactions. Key types include: Cash Book: Records cash inflows and outflows. Ledger: Summarizes transactions by account heads. Journal: Chronologically logs all transactions. Sales Book: Tracks credit sales. Purchase Book: Records credit purchases. Trial Balance: Verifies ledger accuracy. Crucial for financial reporting and compliance.
In accounting, inventory vouchers are documents used to record transactions involving inventory movement. Different types of inventory vouchers are commonly used in accounting software like Tally. Below are the primary types of inventory vouchers:Receipt Note 2. Delivery Note 3. Stock Journal 4. Physical Stock Voucher 5. Material In Voucher 6. Material Out Voucher 7. Manufacturing Journal 8. Rejection In 9. Rejection Out .
Petty cash is a small amount of money kept on hand to cover minor business expenses such as stationery, postage, or travel costs. It allows quick payments without writing cheques or using bank transfers. A petty cash book records all transactions to maintain control and accountability over these small expenses.
Ledger posting is the process of transferring financial transactions from the journal or subsidiary books to the respective accounts in the general ledger. It organizes transactions by account heads, ensuring accurate and systematic record-keeping. This step is crucial for preparing trial balances and financial statements, providing a clear overview of financial activities. .
Reconciliation of books of accounts involves comparing internal financial records with external statements (e.g., bank statements) to ensure consistency and accuracy. It identifies discrepancies, errors, or omissions, ensuring all transactions are correctly recorded. This process is vital for maintaining financial integrity, detecting fraud, and preparing accurate financial reports for decision-making and compliance.
A trial balance is a summary of all ledger account balances, listing debit and credit totals separately. It ensures the accuracy of bookkeeping by verifying that total debits equal total credits. It serves as a preliminary step in preparing financial statements and helps identify errors in the accounting process .
The Trading Account calculates gross profit or loss by comparing sales revenue with the cost of goods sold. The Profit & Loss (P&L) Account determines net profit or loss by deducting operating expenses, taxes, and other costs from gross profit. Both are essential for assessing a business’s financial performance
The Trading Account calculates gross profit or loss by comparing sales revenue with the cost of goods sold. The Profit & Loss (P&L) Account determines net profit or loss by deducting operating expenses, taxes, and other costs from gross profit. Both are essential for assessing a business’s financial performance
Accounting adjustments are year-end entries made to update accounts before preparing financial statements. They include accruals for unpaid expenses and earned incomes, deferrals for prepaid expenses and unearned revenues, depreciation to allocate asset costs, provisions for doubtful debts, and corrections for errors or omissions, ensuring accurate and fair financial reporting.