Scope of Account

7/24/2019 Scope of Account

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Scope of Account:

Book Writing, Balancing Ledgers, Find out Cash in hand, make a correctTrial Balance, Prepare Trading and Profit & Loss Account to ascertain theProfit or loss and at last finalizing the Balance heet!

Terms mostly used in Book Keeping:

Assets : "achiner#, Building, Furniture, Cash, Bank BalanceLia$ilities : Creditors, Capital, Loanale : ale of "aterial, ale of Finished %oodsPurchase : Purchase of "aterial, Purchase of Finished %oods'penses : (ent, alar#, Wages, Telephone 'ps, etc!)ncome : Commission, (ent (ecd!, )nterest (ecd!

Assets

Fi'ed Assets Current Assets"achiner# CashLand & Building tock in handFurniture Ad*ances

Car, cooter +e$tors)nstruments Bank Balance

Fi'ed Assets are those assets, hich are purchased to run the $usinesssmoothl# and remain fi'ed for a $usiness! There is no sale or purchase ofthese items on a regular $asis!

Current Assets are those assets that are $# their nature can $e con*ertedinto cash ith in a #ear or from those cash can $e generated in a shortperiod!

Lia$ilities


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Capital Term Lia$ilities Current Lia$ilities ecured Loans Creditors -nsecured Loans 'penses Pa#a$le

+a# ./Capital :

Amount +eposit From 0ner side!

Capital 1 All Assets 2 'ternal Lia$ilities

For 'ample suppose that the folloing $alance appeared in the $ooks of a

firm:

Cash /33334. "achiner# 533334. tock 6333334.+e$tors 733334. Creditors 833334.

Capital 1 All Assets 2 'ternal Lia$ilitiesAll Assets 1 Cash9 "achiner#9 tock9 +e$tors

1 /33339 533339 6333339 733331 /633334.

'ternal Lia$ilities 1 Creditors

1 833334.Capital 1 /63333. 83333

1 633334.

Term Loan :

Loan can $e hort Term or Long Term!hort Term : For Less Than 0ne #ear & this is called Current Lia$!Long Term : For "ore Than 0ne #ear

Loan Can $e ecured or -nsecured!ecured Loans : Against ecurit# of Propert#, etc!-nsecured Loans: Without ecurit#

Current Lia$ilities:


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Lia$ilities that are to $e paid ith in a #ear i!e! pa#ment to $e made toCreditors, Pa#ment to $e made to orkers, (ent pa#a$le, etc!

Conclusion :From the a$o*e e can find out the conclusion that:

Capital 1 All Assets . 'ternal Lia$!0r

All Assets 1 Capital 9 'ternal Lia$!0r

'ternal Lia$!1 All Assets . Capital!

;ature of Assets And Lia$ilities:

All the Assets ha*e +e$it BalancesAll the Lia$ilities ha*e Credit Balance

All the 'pense hould $e +e$itedAll the )ncomes hould $e Credited

)f Assets )ncrease : )t hould $e +e$ited)f Assets +ecrease : )t hould $e Credited

)f Lia$ilities )ncrease : )t hould $e Credited)f Lia$ilities +ecrease : )t hould $e +e$ited

'ample:

Furniture Purchased : Furniture A4c 2 +e$itConstruction of Building : Building A4c 2 +e$itC#cle old : C#cle A4c 2 CreditCar old : Car A4c 2 Credit

%oods Purchased : Purchase A4c 2 +e$itale "ade : ale A4c . Credit(ent 'penses : (ent A4c 2 +e$italar# 'penses : alar# A4c 2 +e$itCommission (ecd! : Commission 2 Credit)nterest (ecd! : )nterest (ecd! A4c 2 Credit(ent +ue, $ut not Paid : (ent Pa#a$le 2 Credit


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alar# +ue, $ut not Paid : alar# Pa#a$le . Credit

Balance heet:

)t is easier to understand the nature of assets and lia$ilities if eunderstand a Balance sheet Performa! A simple $alance sheet is as:.

Balance heet

Lia$ilities Amount Assets Amount

Capital 63333 Cash /3333Creditors 83333 "achiner# 53333

tock 633333+e$tors 73333

Total 210000 Total 210000

'ample

6! %opal tarted $usiness ith (s!


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Assets 1 Lia$ilities 9 CapitalCash 9 Furniture 9 tock 1 Creditor 53333 9 5333 9 8=333 1 6=333 9 Lia$ilities Amount Assets Amount

Capital 3333 Cash =7333Creditors 6=333 Furniture 5333

tock 6/333+e$tors 65333


For >ome Work

6! "ukesh started $usiness ith Cash! 3333/! Purchased goods for Cash! /3338! Purchased goods on Credit! /33337! Purchased furniture for Cash =3335! (ent Paid /333=! Commission (ecd! 533

! old goods on credit ?Cost (s! 83333@ 73333! Paid to Creditors 65333


6/116

Scope of Account:

Book Writing, Balancing Ledgers, Find out Cash in hand, make a correct

Trial Balance, Prepare Trading and Profit & Loss Account to ascertain theProfit or loss and at last finalizing the Balance heet!



Assets

Fi'ed Assets Current Assets"achiner# Cash

Land & Building tock in handFurniture Ad*ancesCar, cooter +e$tors)nstruments Bank Balance



7/116


Lia$ilities


+a# ./Capital :




firm:



1 /33339 533339 6333339 733331 /633334.

'ternal Lia$ilities 1 Creditors1 833334.

Capital 1 /63333. 833331 633334.

Term Loan :


8/116





Conclusion :

From the a$o*e e can find out the conclusion that:









'ample:

Furniture Purchased : Furniture A4c 2 +e$it


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Construction of Building : Building A4c 2 +e$itC#cle old : C#cle A4c 2 CreditCar old : Car A4c 2 Credit%oods Purchased : Purchase A4c 2 +e$itale "ade : ale A4c . Credit(ent 'penses : (ent A4c 2 +e$italar# 'penses : alar# A4c 2 +e$itCommission (ecd! : Commission 2 Credit)nterest (ecd! : )nterest (ecd! A4c 2 Credit(ent +ue, $ut not Paid : (ent Pa#a$le 2 Creditalar# +ue, $ut not Paid : alar# Pa#a$le . Credit

Balance heet:


Balance heet



tock 633333+e$tors 73333


'ample



10/116

Cash 9 Furniture 9 tock 1 3 9

tock 6/333+e$tors 65333


For >ome Work

6! "ukesh started $usiness ith Cash! 3333/! Purchased goods for Cash! /3338! Purchased goods on Credit! /33337! Purchased furniture for Cash =333


11/116

5! (ent Paid /333=! Commission (ecd! 533

Scope of Account:



Assets : "achiner#, Building, Furniture, Cash, Bank BalanceLia$ilities : Creditors, Capital, Loanale : ale of "aterial, ale of Finished %oodsPurchase : Purchase of "aterial, Purchase of Finished %oods

'penses : (ent, alar#, Wages, Telephone 'ps, etc!)ncome : Commission, (ent (ecd!, )nterest (ecd!

Assets


12/116





Lia$ilities


+a# ./Capital :




firm:




13/116

1 /33339 533339 6333339 733331 /633334.


Capital 1 /63333. 833331 633334.

Term Loan :


Loan Can $e ecured or -nsecured!

ecured Loans : Against ecurit# of Propert#, etc!-nsecured Loans: Without ecurit#











14/116



'ample:

Furniture Purchased : Furniture A4c 2 +e$itConstruction of Building : Building A4c 2 +e$itC#cle old : C#cle A4c 2 CreditCar old : Car A4c 2 Credit%oods Purchased : Purchase A4c 2 +e$itale "ade : ale A4c . Credit

(ent 'penses : (ent A4c 2 +e$italar# 'penses : alar# A4c 2 +e$itCommission (ecd! : Commission 2 Credit)nterest (ecd! : )nterest (ecd! A4c 2 Credit(ent +ue, $ut not Paid : (ent Pa#a$le 2 Creditalar# +ue, $ut not Paid : alar# Pa#a$le . Credit

Balance heet:


Balance heet



tock 633333+e$tors 73333


'ample



15/116

Assets 1 Lia$ilities 9 CapitalCash


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+e$tors 65333


For >ome Work


Scope of Account:



Assets : "achiner#, Building, Furniture, Cash, Bank Balance


17/116

Lia$ilities : Creditors, Capital, Loanale : ale of "aterial, ale of Finished %oodsPurchase : Purchase of "aterial, Purchase of Finished %oods'penses : (ent, alar#, Wages, Telephone 'ps, etc!)ncome : Commission, (ent (ecd!, )nterest (ecd!

Assets

Fi'ed Assets Current Assets"achiner# CashLand & Building tock in handFurniture Ad*ancesCar, cooter +e$tors)nstruments Bank Balance



Lia$ilities


+a# ./Capital :



18/116


For 'ample suppose that the folloing $alance appeared in the $ooks of afirm:



1 /33339 533339 6333339 733331 /633334.


Capital 1 /63333. 833331 633334.

Term Loan :





Conclusion :






19/116





)f Lia$ilities )ncrease : )t hould $e Credited

)f Lia$ilities +ecrease : )t hould $e +e$ited

'ample:

Furniture Purchased : Furniture A4c 2 +e$itConstruction of Building : Building A4c 2 +e$itC#cle old : C#cle A4c 2 CreditCar old : Car A4c 2 Credit%oods Purchased : Purchase A4c 2 +e$itale "ade : ale A4c . Credit(ent 'penses : (ent A4c 2 +e$italar# 'penses : alar# A4c 2 +e$itCommission (ecd! : Commission 2 Credit)nterest (ecd! : )nterest (ecd! A4c 2 Credit(ent +ue, $ut not Paid : (ent Pa#a$le 2 Creditalar# +ue, $ut not Paid : alar# Pa#a$le . Credit

Balance heet:


Balance heet


Capital 63333 Cash /3333


20/116

Creditors 83333 "achiner# 53333tock 633333+e$tors 73333


'ample



21/116

Assets 1 Lia$ilities 9 CapitalCash 9 Furniture 9 tock 9 +e$tors 1 Creditor =5333 9 5333 9 6/333 9 65333 1 6=333 9 6333.6333 9 3 9 3 9 3 1 3 9 .6333=7333 9 5333 9 6/333 9 65333 1 6=333 9 3333

Balance heet



tock 6/333+e$tors 65333


For >ome Work



22/116

Scope of Account:




Assets





Lia$ilities


23/116


+a# ./Capital :




firm:



1 /33339 533339 6333339 733331 /633334.


1 833334.Capital 1 /63333. 83333

1 633334.

Term Loan :





24/116











'ample:




25/116


Balance heet:


Balance heet



tock 633333+e$tors 73333


'ample



26/116



tock 6/333+e$tors 65333


For >ome Work




27/116

Scope of Account:





Assets





28/116


Lia$ilities


+a# ./Capital :




firm:



1 /33339 533339 6333339 733331 /633334.


Capital 1 /63333. 833331 633334.

Term Loan :


29/116





Conclusion :










'ample:



30/116


Balance heet:


Balance heet



tock 633333+e$tors 73333


'ample



31/116


tock 6/333+e$tors 65333


For >ome Work



32/116


Scope of Account:





Assets


33/116





Lia$ilities


+a# ./Capital :




firm:




34/116

1 /33339 533339 6333339 733331 /633334.


Capital 1 /63333. 833331 633334.

Term Loan :














35/116



'ample:



Balance heet:


Balance heet



tock 633333+e$tors 73333


'ample



36/116



37/116

+e$tors 65333


For >ome Work


Scope of Account:





38/116


Assets




Lia$ilities


+a# ./Capital :



39/116





1 /33339 533339 6333339 733331 /633334.


Capital 1 /63333. 833331 633334.

Term Loan :





Conclusion :






40/116







'ample:


Balance heet:


Balance heet




41/116



'ample



42/116


Balance heet



tock 6/333+e$tors 65333


For >ome Work



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Scope of Account:




Assets





Lia$ilities


44/116


+a# ./Capital :




firm:



1 /33339 533339 6333339 733331 /633334.


1 833334.Capital 1 /63333. 83333

1 633334.

Term Loan :





45/116











'ample:




46/116


Balance heet:


Balance heet



tock 633333+e$tors 73333


'ample



47/116



tock 6/333+e$tors 65333


For >ome Work




48/116

Scope of Account:





Assets





49/116


Lia$ilities


+a# ./Capital :




firm:



1 /33339 533339 6333339 733331 /633334.


Capital 1 /63333. 833331 633334.

Term Loan :


50/116





Conclusion :










'ample:



51/116


Balance heet:


Balance heet



tock 633333+e$tors 73333


'ample



52/116


tock 6/333+e$tors 65333


For >ome Work



53/116


Scope of Account:





Assets


54/116





Lia$ilities


+a# ./Capital :




firm:




55/116

1 /33339 533339 6333339 733331 /633334.


Capital 1 /63333. 833331 633334.

Term Loan :














56/116



'ample:



Balance heet:


Balance heet



tock 633333+e$tors 73333


'ample



57/116



58/116

+e$tors 65333


For >ome Work


Scope of Account:





59/116


Assets




Lia$ilities


+a# ./Capital :



60/116





1 /33339 533339 6333339 733331 /633334.


Capital 1 /63333. 833331 633334.

Term Loan :





Conclusion :






61/116







'ample:


Balance heet:


Balance heet




62/116



'ample



63/116


Balance heet



tock 6/333+e$tors 65333


For >ome Work



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Scope of Account:




Assets





Lia$ilities


65/116


+a# ./Capital :




firm:



1 /33339 533339 6333339 733331 /633334.


1 833334.Capital 1 /63333. 83333

1 633334.

Term Loan :





66/116











'ample:




67/116


Balance heet:


Balance heet



tock 633333+e$tors 73333


'ample



68/116



tock 6/333+e$tors 65333


For >ome Work




69/116

Scope of Account:





Assets





70/116


Lia$ilities


+a# ./Capital :




firm:



1 /33339 533339 6333339 733331 /633334.


Capital 1 /63333. 833331 633334.

Term Loan :


71/116





Conclusion :










'ample:



72/116


Balance heet:


Balance heet



tock 633333+e$tors 73333


'ample



73/116


tock 6/333+e$tors 65333


For >ome Work



74/116


Scope of Account:





Assets


75/116





Lia$ilities


+a# ./Capital :




firm:




76/116

1 /33339 533339 6333339 733331 /633334.


Capital 1 /63333. 833331 633334.

Term Loan :














77/116



'ample:



Balance heet:


Balance heet



tock 633333+e$tors 73333


'ample



78/116



79/116

+e$tors 65333


For >ome Work


Scope of Account:





80/116


Assets




Lia$ilities


+a# ./Capital :



81/116





1 /33339 533339 6333339 733331 /633334.


Capital 1 /63333. 833331 633334.

Term Loan :





Conclusion :






82/116







'ample:


Balance heet:


Balance heet




83/116



'ample



84/116


Balance heet



tock 6/333+e$tors 65333


For >ome Work



85/116

Scope of Account:




Assets





Lia$ilities


86/116


+a# ./Capital :




firm:



1 /33339 533339 6333339 733331 /633334.


1 833334.Capital 1 /63333. 83333

1 633334.

Term Loan :





87/116











'ample:




88/116


Balance heet:


Balance heet



tock 633333+e$tors 73333


'ample



89/116



tock 6/333+e$tors 65333


For >ome Work




90/116

Scope of Account:





Assets





91/116


Lia$ilities


+a# ./Capital :




firm:



1 /33339 533339 6333339 733331 /633334.


Capital 1 /63333. 833331 633334.

Term Loan :


92/116





Conclusion :










'ample:



93/116


Balance heet:


Balance heet



tock 633333+e$tors 73333


'ample



94/116


tock 6/333+e$tors 65333


For >ome Work



95/116


Scope of Account:





Assets


96/116





Lia$ilities


+a# ./Capital :




firm:




97/116

1 /33339 533339 6333339 733331 /633334.


Capital 1 /63333. 833331 633334.

Term Loan :














98/116



'ample:



Balance heet:


Balance heet



tock 633333+e$tors 73333


'ample



99/116



100/116

+e$tors 65333


For >ome Work


Scope of Account:





101/116


Assets




Lia$ilities


+a# ./Capital :



102/116





1 /33339 533339 6333339 733331 /633334.


Capital 1 /63333. 833331 633334.

Term Loan :





Conclusion :






103/116







'ample:


Balance heet:


Balance heet




104/116



'ample



105/116


Balance heet



tock 6/333+e$tors 65333


For >ome Work



106/116

Scope of Account:

Book Writing, Balancing Ledgers, Find out Cash in hand, make a correctTrial Balance, Prepare Trading and Profit & Loss Ac

Documents

Scope of Account