(i) Capital receipts and revenue receipts: Capital receipts refer to the inflow of funds that result in the creation or acquisition of an asset or reduction in liabilities, resulting in long-term benefits to the entity. These receipts are not recurring in nature and are generated by selling fixed assets, issuing long-term loans, or raising share …

Distinguish between the following: (i) capital receipts and revenue receipts, (ii) capital profits and revenue profits, and (iii) capital losses and revenue losses. Read More »

A Bank Reconciliation Statement is a vital document that companies use to compare the balances of their bank account in the cash book and the bank statement. It is crucial to identify any discrepancies or errors between these balances. The primary objective is to ensure that the company’s bank account balance in the cash book …

What is a Bank Reconciliation Statement? Discuss the various causes of disagreement between the balances shown by the cash book and the pass book. Read More »

To journalize the transactions: 1. April 1, 2022:Cash Account Dr. 1,20,000To Capital Account 1,20,000(Being business commenced with cash) 2. April 3, 2022:Furniture Account Dr. 24,000To Cash Account 24,000(Being furniture purchased for cash) 3. April 4, 2022:Purchase Account Dr. 36,000To Vijay Account 36,000(Being goods purchased from Vijay) 4. April 5, 2022:Cash Account Dr. 4,800To Sales Account …

Journalise the following transactions, post them into ledger and balance the accounts: 1st April 2022 Ashok commenced business with cash Rs. 1,20,000 3rd April 2022 Purchased furniture for cash Rs. 24,000 4th April 2022 Purhased goods from Vijay Rs. 36,000 5th April 2022 Sold goods Rs. 4,800 7th April 2022 Paid rent Rs. 3,000 Read More »

Classification of accounts refers to the process of categorizing financial transactions into different groups based on their nature, purpose, and characteristics. These categories are important because they help businesses to organize their financial data and gain valuable insights into their financial health. Various categories of accounts are used in accounting to group financial transactions based …

Discuss the classification of accounts with example. Read More »

Differentiate between double entry system and single entry system. Double-entry system and single-entry system are two distinct methods of bookkeeping used by businesses to record their financial transactions. The primary difference between these two methods is the way transactions are recorded and the level of detail provided. The single-entry system is a straightforward bookkeeping method …

Differentiate between double entry system and single entry system. Read More »

Based on the information given, the following transactions should be recorded in the books of Mr. Mukesh Rana’s ready made garments business: a) Purchased a typewriter for Rs. 6,000 for office use:Debit: Office Equipment A/C – Rs. 6,000Credit: Cash/Bank A/C – Rs. 6,000 b) Sold old domestic furniture for Rs. 500:Debit: Cash/Bank A/C – Rs. …

Mr. Mukesh Rana carries on ready made garments business. A few transactions are given below. Identify the transactions to be recorded in the books of his business. a) Purchased a typewriter for Rs. 6,000 for ofice use. b) Sold old domestic furniture for Rs. 500. c) Purchased cloth for garments for Rs. 10,000. d) A shirt worth Rs. 250 is taken home for his son. e) Appointed Satish as an assistant in the shop. Read More »