1. Prof Seema Chakrabarti Preparing books of Accounts…..

2. Account An account is a book-keeping device to record increases and decreases in each specific asset or liability item. It has two sides divided by a vertical line from the centre, giving it the appearance of alphabet T and is, therefore, referred to as T-account.

3. Format 2: Ledger Book Format 1: Journal Book Account Books Journal book is a chronological record of transactions and is known as the book of original or first entry. Ledger book provides details (by listing increases as well as decreases) of each account. DateParticularsL.F.Dr. AmountCr. Amount Posting is the process of transferring entry from journal to ledger. DateParticularsJ.F.J.F. Dr. AmountDateParticularsJ. F. Cr. Amount

4. Debit and Credit Conventionally, the left side of an account is known as the debit (abbreviated Dr.) side and the right side as the credit (abbreviated Cr.) side. The account balance is always of the higher side. It is reasonably safe to assume that debtors have debit balance. Debtors are assets. Therefore, all assets have debit balances. Liabilities are opposite of assets and, therefore, have credit balances. Profits and revenue/income items are liabilities (as payable to the owners), hence, have credit balances. Conversely, expenses and loss items have debit balances.

5. The Accounting Cycle Consists of Seven Sequential Stages 1. 1.Transaction analysis 2. 2.Recording transactions in journal books 3. 3.Posting them in ledger books 4. 4.Preparation of trial balance 5. 5.Recording adjustment entries in journal book 6. 6.Closing entries in respect of nominal accounts 7. 7.Preparation of financial statements, namely, Profit and loss account, Profit and loss appropriation account and Balance sheet.

6. Accounting Cycle Accounting cycle refers to the procedural aspects of accounting records. (1) Transaction Analysis (2)Recording in Journal (3) Posting in ledger (4) Preparation of Trial Balance (5) Adjustment Entries (6) Closing entries (7) Preparation of Final Statements

7. Transaction Analysis…….

8. It refers to: It refers to: Segregating Monetary transaction from non monetary transaction Segregating Monetary transaction from non monetary transaction Identifying the two accounts involved in the transaction. Identifying the two accounts involved in the transaction. Classifying the accounts into respective categories Classifying the accounts into respective categories

9. Types of Accounts Personal (Permanent Account) Representa-tive Person Natural PersonArtificial Person Real (Permanent Account) TangibleIntangible Nominal (Temporary Account)

10. Recording of Journal Entries…….

12. Journal – A book of Prime Entry Since an accounting transaction relating to business is entered in the accounting records (in accounting terms) for the first time in a journal, it is also called a Book of Prime Entry. Since an accounting transaction relating to business is entered in the accounting records (in accounting terms) for the first time in a journal, it is also called a Book of Prime Entry.

13. Types of Accounts Personal (Permanent Account) Representa-tive Person Natural PersonArtificial Person Real (Permanent Account) TangibleIntangible Nominal (Temporary Account)

14. Rules for Debit and Credit Nominal Account Debit all expenses and losses and Credit all revenues, incomes and gains. Personal Account Debit the receiver and Credit the giver. Real Account Debit what comes in and credit what goes out.

29. And now…..

30. ITS TIME FOR ASSIGNMENT !!!