Ledgers
Ledger or Book of Final Entry – Definition, Types, Examples and Purpose of Uses: Ledger is a book of accounts (also called book of final…
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Ledger or Book of Final Entry – Definition, Types, Examples and Purpose of Uses: Ledger is a book of accounts (also called book of final…
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Cash Discount (Prompt Payment Discount, Settlement Discount) – Definition, Calculation and its Types: Cash discount sometimes called prompt payment discount. It is the difference between the…
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Cash Book – Definition, Explanation, Preparation and its Types: Cash book is used to record all cash transactions. Cash transactions not only involve receipt and…
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General Journal or Journal Proper – Definition and Explanation: Majority of all business transactions pass through books of original entry before being posted to ledgers. General…
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Return Outwards Journal or Return Outwards Day Book or (Purchase Returns) – Definition and Explanation: Return outwards journal sometimes call return outwards day book or…
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Return Inwards Journal or Return Inwards Day Book or (Sales Returns) – Definition and Explanation: Return inwards journal sometimes called return inwards day book or…
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Purchases Journal or Purchases Day Book – Definition and Explanation: Purchases of goods may be on cash or on credit basis. Purchases journal sometimes called…
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Sales Journal or Sales Day Book – Definition and Explanation: The sales of goods may be on cash or on credit basis. Cash sales are…
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Books of Original Entry or Books of Prime Entry or Day Books and Journal – Introduction and Definition: A business must ensure that its accounting…
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As we know about capital and revenue items. These are: (1) Capital Expenditure (2) Revenue Expenditure (3) Capital Receipt (4) Revenue Receipt Effects of Wrong/Incorrect…
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Definition of Receipts and its Types: Receipts are the amounts actually received in cash. The receipts may be categorized as: (1) Capital Receipts and (2)…
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Before this article, we should know the difference between terms; expenditure and expense. Expenditure is an amount incurred by a business to purchase assets and…
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Introduction – Capital and Revenue Items: In order to know the fair performance and financial standing of a business; the nature of business transactions taking…
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Definition – Accounting Concept for Revaluation of Assets: Accounting concept for revaluation of assets defines and states that, it is proper adjustment made to the…
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Definition, Explanation and Use of Money Measurement Concept (Convention, Principle) of Accounting or Monetary Unit Assumption: Money measurement concept (convention or principle) of accounting or…
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Definition, Explanation and Use of Objectivity Concept (Convention, Principle) of Accounting: Objectivity concept (convention or principle) of accounting defines and states that while preparing the…
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Definition of Substance Over Form Concept (Convention, Principle) of Accounting: Under Substance over form concept (convention, principle) of accounting, “transactions should be dealt with reference…
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Definition, Explanation and Application of Accrual Concept (Convention, Principle) of Accounting: Accrual is derived from the verb “accrue” which means to increase, to accumulate or…
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Definition of Matching Concept (Convention or Principle) of Accounting: Matching concept (convention or principle) of accounting defines and states that “while preparing the income statement,…
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Definition of Materiality Concept (Convention, Principle) of Accounting: Materiality concept (convention, principle) of accounting defines and states that “items, transactions or an event which significantly…
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Definition of Consistency Principle (Concept, Convention) of Accounting: Consistency principle (concept, convention) of accounting defines and states that, “accounting transactions and accounting methods should be…
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Definition of Historical Cost Concept (Convention, Principle) or Cost Principle of Accounting: Historical cost concept (convention, principle) or cost principle of accounting states and defines…
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Definition of Going Concern Concept (Convention, Principle): “Going concern concept (convention, principle) defines and assumes that a business intends to operate as a business unit for…
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Definition of Prudence Concept (Convention, Principle) or Conservatism Concept of Accounting: Prudence concept (convention, principle) of accounting is also well known as conservatism concept. This…
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Definition of Business Entity Concept (Convention, Principle): “Business entity concept (convention, principle) of accounting entails that business is to be treated as a self-contained entity….
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Basic Accounting Concepts, Conventions, Assumptions and Principles: Accounting concepts, conventions, assumptions and principles suggest logical and generally accepted accounting treatments and principles. These concepts are…
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Following are the accounting procedures or treatment for depreciation non-current assets. The journal entries are as: (1) Journal entry to record purchase of non-current assets:…
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Definition of Provision for Depreciation or Accumulated Depreciation or (Difference between Depreciation and Provision for Depreciation): Depreciation is an expense which is charged in the current year’s…
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Features and Differences – Straight Line and Reducing Balance Methods: Straight Line Method: (1) Depreciation rate and amount remain the same in each year of…
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Under annual depreciation method, higher depreciation charge is recognized in earlier years of asset’s life but charges lower depreciation in the later years compared to…
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Reducing Balance Method or Diminishing Balance Method or Written Down Value Method of Depreciation: Reducing balance method is also named as diminishing balance or written…
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Straight line depreciation method or original cost method is the simplest and most commonly used depreciation method. Under this method, the difference between the original…
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Revaluation depreciation method is usually used to calculate depreciation of assets where, there are numerous small identifiable assets of low value but nevertheless of lasting…
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Different methods are used to calculate the amount of depreciation charge. These are following: (1) Revaluation Depreciation Method (2) Straight Line Depreciation Method or Original…
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Depreciation has the following characteristics or attributes: (1) Depreciation is only charged on non-current assets. (2) Depreciation occurs from the date of purchase of an…
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While calculating the depreciation of non-current assets, following factors involve and must always be consider: (1) Cost Factor – The Original Cost of Asset: The cost…
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Non-Current Assets and Depreciation – Definition, Concept and Explanation: Non-current assets are purchased by a business not for resale but to be used within the…
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There are following important points related to accounting treatment of provisions for doubtful debts and discounts allowed: (1) Both provisions for doubtful debts and provision for…
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There are following benefits or advantages of offering cash discounts in business: (1) Discount offer induce a trade receivable to pay early, which not only…
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Cash Discounts Allowed – Definition: Some firms allow cash discounts to their customers for prompt payment. In that case at year end, the outstanding trade…
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Recovery of Bad Debts – Concept, Accounting Journal Entries and Solved Example: Some times business receives a pleasant surprise, when it recovers the bad debts which…
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Definition and Concept of Aging Schedule for Calculating Provision for Doubtful Debts: Sometimes provision for doubtful debt is calculated with the help of aging schedule…
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Concept and Definition of Provision for Doubtful Debts or Allowance for Bad Debts or Allowance for Un-Collectible Accounts: Businesses usually create a provision for doubtful…
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Bad Debts, Trade Receivables and Doubtful Debts – Definition, Example, General Journal Entry and their Difference: Bad Debts: A bad debt is a debt that is…
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Purpose of Bank Reconciliation Statement (BRS): The purpose of bank reconciliation statement is to carried out uncover and correct any errors in the recording of…
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The process for preparing the bank reconciliation statement (BRS) follows the below steps or method: (1) Compare the both opening balances of cash book and…
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Definition, Meaning and Need for BRS: If there is any discrepancy between the cash book balance and that of bank statement, then the business prepares…
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Absorption of Overheads or Cost Recovered – Definition, Procedure and Formula: Once total production overheads (calculation of overhead absorption rate) of production cost centers are…
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Plant or Factory Wide (Single) Overhead Absorption Rate – Definition, Formula and Use: Plant or factory wide (single or blanket) rate is used for the…
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Basis (Methods) for Calculating Overhead Absorption Rate: The production overheads calculated for each production department after going through apportionment and allotment are used to calculate…
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Explains financial and managerial accounting. Exercises, problems, calculators and more.