Closing stock is shown in final accounts as follows:
(i) On the credit side of the Trading A/c
(ii) On the assets side of Balance Sheet

Accounting information when contained in a computerized environment is called accounting information system. It is a system that performs the enterprises accounting applications by processing high volume of data. It is widely used in profit as well as non-profit organizations because the accounting information that it provides is used not only by the accounts department but also by other departments, like production department, human resource department, market department, manufacturing department etc. Accounting information system gathers data describing the organizations activities, maintains a detailed financial record of the organizations operations, transforms the data into information and makes the information available to users both inside and outside the organization. Accounting information system processes the data of the enterprise. It collects the data, transforms the dat into information and makes the information available to the user.
An Accounting Information System is a system of collecting, processing, summarizing and reporting information about a business organization in monetary items.

Three parties involved in a bill of exchange:
(i) The drawer: The party which makes the order is known as the drawer.
(ii) The acceptor: The party which accepts the order is known as the acceptor.
(iii) The payee: The party to whom the amount has to paid is known as payee. The drawer and the payee may be the same person.

Distinction between Capital Expenditure and Revenue Expenditure

Amortisation refers to writing-off the cost of intangible assets like patents, copyright, trademarks, franchises, leasehold, mines which are entitlements to use for a specific period of time. The procedure for amortisation or periodic write-off of a portion of the cost of intangible assets, is the same as that for the depreciation of fixed assets.
For example: if a business firm buys a patent for Rs. 10,00,000 and estimates that its useful life will be 10 years, then the business firm must write-off Rs. 10,00,000 over 10 years. The amount so written-off is technically referred to as amortisation.

The role of accounting has been changing over the period of time. In the modern world, the role of accounting is not only limited to recording financial transactions but also to provide a basic framework for various decision-making, providing relevant information to various users and assist in both short-run and long-run planning. The role of accounting in the modem world is given below:
(i) Assisting management : Management uses accounting information for short-term and long term planning of business activities to predict the future conditions, prepare budgets and various control measures.
(ii) Comparative study : In the modern world, accounting information helps us to know the performance of the business by comparing current year's profit with that of the previous years and also with other firms in the same industry.
(iii) Substitute of memory: In the modern world, every business incurs large number of transactions and it is beyond human capability to memorise each and every transaction. Hence, it is very necessary to record transactions in the books of accounts.
(iv) Information to end user : Accounting plays an important role in recording, summarising and providing relevant and reliable information to its users, in form of financial data that helps in decision-making.

Difference between Capital Expenditure and Revenue Expenditure

(i) According to this principle the accounting data should be verifiable and bias-free. Thus, only those transactions should be recorded in the accounting books, which are evidenced and supported by business documents.
(ii) Normally, we follow historical cost accounting, in which accounting books are based on original documents, such asvouchers, cash memos, invoices receipts, etc. As these transactions are based on documentary evidences, they are therefore, verifiable.
(iii) Books of accounts based on evidences are considered bias-free as the users of financial statements feel that data supported by documents are reliable and are not subject to the bias of either accountants or management.
If this principle is not followed, there may be dispute with regard to value to be shown in accounting books because of different valuations of items by different valuers. Although, historical cost accounting is also not free from shortcomings and limitations.

The objectives of Trial Balance are as follows: (i) Ascertaining arithmetical accuracy: Trial balance act as a device to check the arithmetical accuracy of the accounting process culminating in the ledger accounts. If the Trial Balance agrees, it may be taken that arithmetical errors do not exist, even though this cannot be conclusively stated.
(ii) Summarize: To afford a summarised version of the position of each account and accounts in general. Scanning the Trial Balance enables one to know the assets that one possesses, the amounts that are owed to others and the amounts due from others, etc.
(iii) Facilitates preparation of financial statements: To act as a starting point for the preparation of the final accounts, viz., the Profit & Loss Account and the Balance Sheet. The final accounts are made on the basis of the trial balance. The various adjustments that are to be made can be made only after the Trial Balance is ready.

The following are the most common source documents:
(i) Voucher
(ii) Cheque
(iii) Pay-in-slip
(iv) Debit note
(v) Receipt
(vi) Invoice or Bill
(vii) Cash memo
(viii) Credit note.

Cash book is a book in which all transaction-relating to cash receipt' and cash payments are recorded. It starts the cash or bank balances at the beginning of the period. Generally, it is made on monthly basis. It serves the purpose of both journal as well as the ledger (cash) amount since, transactions are recorded for the first time in the cash book, it is also called the book of original entry. When a cash book is maintained, transactions of cash are not recorded in the journal, and no separate account for cash or bank is maintained.
Types of Cash Book
There are there types of Cash Book.
(i) One column Cash Book /Simple Cash Book- Their is ordinary cash book having one column of Amount on each side of book for cash. It records only cash transactions.
(ii) Two column Cash Book- Their cash book contains two columns of amount on each side of book for cash and Bank. It records all cash bank transactions in a single book.
(iii) Petty Cash Book-It in collaborated cash book to annuitants record of petty cash expense like conveyance, cartage, stationery etc.

Electronic Spreadsheet is a specially designed programme for the business firms. Electronic Spreadsheet is an interactive computer application for organization, analysis and storage of data in tabular form. Spreadsheets are developed as computerized simulations of paper accounting worksheets. The program operates on data entered in cells of a table.

The process of ascertaining the amount of profit earned or the loss incurred during a particular period it involves deduction of related expenses from the revenue earned during that period. The matching concept emphasises exactly on this aspect. It States that expenses incurred in an accounting period should be matched with revenues during that period. It follows that the revenues and expenses incurred to earn these revenues must belong to the same accounting period. Revenue is recognised when a sale is complete or services is rendered rather when cash is received. Similarly an expense is recognised not only when cash is paid but when an asset or services has been used to generate revenue. For example, expenses such as salaries, rent, insurance are recognised on the basis of period to which they relate and not when these are paid. Similarly, costs like depreciation of fixed asset is divided over the periods during which the assets is used.
The matching concept, thus, implies that all revenues earned during an accounting year, whether received during that year, or not and all costs incurred, whether paid during the year, or not should be taken into account while ascertaining profit or loss for that year.

The following are the practical difficulties that are encountered by a trader due to incompleteness of accounting records:
(i) Unscientific: Absence of systematic recording of both aspects of a transaction under this, makes it unscientific.
(ii) No trial balance for arithmetical accuracy of accounts : Dual aspects of a transaction is not recorded under this system. As a result, trial balance cannot be prepared from the accounting records maintained. Hence, arithmetical accuracy of accounting records cannot be checked
(iii)True Profits cannot be known: Nominal accounts are not maintained and therefore, it is not possible to prepare trading and profit and loss account to calculate gross profit and net profit respectively. Although the amount of net profit is determinable but the absence of details of revenue, other income, expenses and losses affect sound decision making.
(iv) True financial position cannot be determined: As all the assets and liabilities and depreciation are not recorded, the Balance Sheet cannot be prepared and as a result the true financial position cannot be ascertained.
(v)Difficulty in planning and decision making : In the absence of reliable information about nominal and real accounts, effective planning and control over expenses, assets, etc. is not possible
(vi) Not recognised by tax-authorities : Accounts maintained based on this system are not accepted by sales-tax and income-tax authorities.
(vii) Inter firm comparison not possible : Due to the variation in accounting procedure and rules, comparison of two or more business is not possible

Profit = Closing Capital + Drawings - Additional Capital - Opening Capital.
= Rs. 90,000 + Rs. 5,000 - Rs. 10,000 - Rs. 60,000.
= Rs. 25,000.

(i) Account: An account is a basic way of recording/ posting business transactions in terms of 'Debit' and 'Credit'.
(ii) Sales : The term 'Sales' is used only for the sale of goods which are purchased with the purpose of resale. The term 'sales' includes both cash sales and credit sales. In accounting terminology, sale of assets are not sales. Sales should be a regular feature.
(iii) Goods: Articles purchased for sale or for use in the manufacturing of other products as raw material are known as 'Goods'. For example: furniture will be the goods for the firm dealing in furniture but it will be an asset for the firm dealing in stationery.
(iv) Voucher: A voucher is an evidence, in writing, of a transaction that has taken place.

(i) Dual Aspect: According to Dual Aspect principle every business transaction has two aspects, i.e., debit and credit with same amount. e.g., Rent paid Rs 1,000. So this transaction has two aspect one is debit as rent and other is cash which will be credit. Trial Balance is also prepared as per the Dual Aspect principle.
(ii) Accrual: According to this principle, all anticipated losses and expenses should be recorded in the books of accounts, but all anticipated gains should be ignored.
(iii)Conservatism: It is also called Prudence Principle. Conservatism principle says that provide for all possible anticipated losses but not for profits. But the biggest drawback of this principle is creation of secret reserve. For example: Creation of Provision for doubtful debts.

(i) Endorsement:
Endorsement is a process by which an instrument such as bill of exchange is made payable to any third person. For example: Mohit draws a bill on Nitin. The amount of bill is generally payable to Mohit. Suppose Mohit wants to give this bill to his creditor Aman, Mohit will endorse this bill in favour of Aman. As a result, Nitin will make payment to Aman.
(ii) Paying Bill of Exchange before maturity date:
A bill of exchange is payable generally on the maturity date. But an acceptor of bill may pay bill of exchange before maturity date. In this case, payee allows a discount known as rebate.
The purpose and benefits of retiring a bill of exchange to the debtor is that he is entitled to a rebate or discount on such an early payment. A debtor earns a rebate which is again to him. The purpose and benefit of retiring a bill of exchange to the creditor is to ensure the payment before maturity.

Suspense Account may be defined as a temporary account to which the difference in trial balance has been put till the errors are located and rectified. For example: A payment received from an unidentified party is recorded as:
Bank A/c       Dr.
To Suspense A/c
While preparing Trial Balance, if an accountant is unable to detect the difference in the totals of the Trial Balance, he can put the difference in suspense account. If the debit side is short, the suspense account shall be debited by the amount of difference. If the credit side is short, then the difference shall be credited to the suspense account. Thus, with the help of the suspense account the trial balance will get balanced. As soon as the errors are detected, these are rectified by passing Journal entries. When all the errors leading to difference in the trial balance are located and rectified, the suspense account shall be closed automatically.