Transactions(eg) :-

Journalize the following transactions of ABC Ltd:-

1. Ram started business with cash Rs. 250000
2. Brought furniture for Rs. 21000
3. Purchased goods from KP traders, Rs. 28500
4. Cash sales Rs. 35000
5. Sold goods on credit to Manoharan Rs.25000
6. Paid for office stationary Rs. 250
7. Cash received from Manoharan Rs. 10000
8. Interest on investment received RS. 1500
9. Paid rend RS. 5500
10. Paid salary Rs. 3000

Double entry System(eg):-

     Shaji started business with a capital of
rupees 50000/-
There are two aspects of the transactions,

• One is Business has received cash from shaji at rupees 50000/- (Assets)
• Second one is Business has to pay sum of rupees 50000/- to Shaji (Liabilities).

Accounting Equations:-

“Assets = Liabilities + Capital” (10=4+6)

“Capital = Assets - Liabilities” (6=10-4)

“Liabilities = Assets - Capital” (4=10-6)

“Assets - Capital - Liabilities = 0” (10-6-4=0)

Basic Tearms:-

1. Assets
   a. Current Assets
   b. Fixed Assets
   c. Liquid Assets

2. Liabilities
   a. Current Liabilities
   b. Fixed Liabilities

3. Expenses
   a. Direct expenses
   b. Indirect expenses

4. Incomes

   a. Direct incomes
   b. Indirect incomes

5. Goods
6. Purchases
7. Sales
8. Stokes
9. Debtors
10. Creditors
11. Drawings

Users of Accounting information:-

1. Owners
2. Management
3. Potential Inventories
4. Creditors and Bankers
5. Employees
6. Government(for Tax)
7. Researchers

Objectives of Accounting :-

1. To maintaining records of business.
2. Calculation of profi t or loss.
3. To know fi nancial position.
4. To Make information available to
    Various users.

Book Keeping and Accounting:-

The book keeping denotes the
recording business transactions in a set
of books an it is a part of accounting.
Accounting is a broude tearm
which describes recording os transactions
and systematic appraisal of the results
thus accounting is more analytic in
nature.