1. Double Entry Accounting System Topics  Double Entry Accounting System-What it is?  Cash and Accrual based Accounting  Concept of Debit and Credit  Revenue & Capital  Accounting definitions.

2. What is Accounting? Accounting is an art of recording,classifying and summarizing the financial information in a significant manner.

3. Single Entry System  Under this system both the aspects of transaction are not recorded.  Only Personal accounts & cash book are opened.  Under this system balance sheet is not prepared. This system is therefore not considered as an authentic one.

4. Double Entry Accounting System  Based on principle of duel aspect of each transaction.  For correct presentation both of them should be recorded.  Requires maintenance of records of assets, liabilities, revenues and expenditure.  Impact of each transaction can be seen or measured.  Total assets are equal to total equities.

5. Classification of Accounts  Personal Account  Real Account  Nominal Account

6. Personal Account  Definition & Examples of accounts:-  Personal Account: Personal accounts are accounts relating to persons or organisations with whom the business has transactions. E.g Customer, Supplier, Money lenders etc.

7. Real Accounts Real Accounts: Real accounts refer to accounts in which property and possession are recorded. E.g Land, Building, Plant & Machinery, Vehicle Cash, Bank etc.

8. Nominal Accounts  Nominal Accounts: Nominal accounts are revenue, expenses, gains, and losses. E.g. Wages, Salary, Discount etc.

9. Concept of Debit & Credit(Golden Rules)  For Personal Accounts :Debit the receiver and credit the giver. E.g. Furniture has been purchased from Godrej & Boyce Ltd on credit of Rs.2,00,000/- Journal Entry: Furniture A/C Dr. Rs.2,00,000/- To Godrej & Boyce Ltd Cr. Rs.2,00,000/-

10. Concept of Debit & Credit (Golden Rules) For Real Accounts: Debit what comes in and credit what goes out. A vehicle has been purchased of Rs. 8,00,000/- by cheque. Journal Entry: Vehicle A/C Dr. Rs.8,00,000/- To Bank Cr. Rs.8,00,000/-

11. Concept of Debit & Credit (Golden Rules) For Nominal Accounts: Debit all expenses (and loses) and Credit all incomes(and gain). E.g Telephone bill amounting to Rs.25,000/- paid by cheque. Telephone Expense A/c Dr. Rs.25000/- To Bank A/c Cr. Rs. 25000/-

12. Double Entry Accounting System classification  Cash Based :- Cash basis of accounting is a method of accounting in which transactions are recorded in the books of account when cash is actually received or paid out. Eg.Property Tax has been received of Rs.10,000/- Cash A/C Dr Rs.10,000/- To Property Tax Cr. Rs.10,000/-

13. Accrual Based Accrual Based :- Accrual basis of accounting is an accounting system which recognises revenues and expenses as they are earned or incurred, not as cash received or paid respectively. Eg.Raised demand and sent Property Tax bills of Rs.10,000/- on 10 th May2014 and the same amount has been received against the demand on 30 th May,2014.

14. Accrual Based 10.05-2014 Property Tax Receivable A/C Dr 10,000/ To Property Tax A/C Cr. 10,000/- 30-05-2014 Cash/Bank A/C Dr 10,000/- To Property Tax Receivable A/C Cr 10,000/-

15. Accrual Based  A)Received a bill for construction of road from NBCC Ltd for Rs.10,00,000/-(Bill Processed and deductions made Security Money Rs.1,00,000/-,TDS Rs.50,000/-,TVAT 1,20,000,labour Cess Rs.10,000/-) on 30 th May,2014.  B)Paid Rs.7,20,000/- to NBCC Ltd on 3 rd June,2014. 30-05-2014 Roads A/C Dr 10,00,000/- To, Security Money1,00,000/- To, TDS, Income Tax 50,000/- To, TVAT 1,20,000/- To, Labour Cess 10,000/- To, NBCC Ltd7,20,000/- 3-06-2014 NBCC Ltd A/C Dr 7,20,000 /- To, Bank 7,20,000/-

16. Capital and Revenue Expenditure Capital expenditure is the expenditure where the benefits are not fully consumed in a year but spread over several years. Revenue Expenditure is the expenditure which provides benefits in the current accounting year only. It can not be forwarded to next year or years.

17. Primary Accounting Documents Following primary accounting documents have to be maintained:  Receipt Vouchers  Payment Vouchers  Fund Transfer Vouchers/Contra Vouchers.  Journal Vouchers

18. Primary Books of Accounts Before preparation of Financial Statements we have to prepare following primary books of accounts:  Cash book  Bank book ( incl. Bank Reconciliation Statement)  Journal book  Ledger  Trial Balance

19. Financial Statement  Receipts & Payments Statement.  Income & Expenditure Account.  Balance Sheet.

20. Why the Financial Statement is mandatory for ULB. To know the actual position of the assets, liabilities and reserve of the ULB. Shows the position of general fund of ULB.

21. Receipts & Payments Account. Receipts Amount(Rs ) Payments Amount( Rs ) To Balance b/d 1,00,00,000 By Salary3,00,000 To Share of Taxes(SOT) 1,00,00,000By Wages1,00,000 To TUEP50,00,000By Electricity Expenses 50,000 To Property Tax5,00,000By Fuel10,00,00 0 To Water Tax6,00,000By TUEP13,00,00 0 By Balance c/d2,33,50,0 00 2,61,00,000

22. Income & Expenditure Account Expenditure Amount( R s) Income Amount(Rs ) To Salary10000By Property Tax 1,00,000 Wages5000Add-Outstanding 50,000 1,50,000 Printing & Stationery 3000By Water Tax 30,000 Interest5000By Profit on sale of refreshment(50,0 00-20,000) 20,000 Insurance1000 Excess of Income over Expenditure 1,86,000 2,00,000

23. Balance Sheet. LiabilitiesAmou nt AssetsAmoun t Capital Fund Rs. 10,00,00,000 Less: Excess of Income over Exp. Rs. 1,86,000 8,14,000Furniture5,00,000 Loan from HUDCO1,00,000Cash in Hand10,000 Outstanding Rent20,000Cash at Bank3,29,000 Subscription received in advance 5,000Stock1,00,000 9,39,000

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