The following are the different methods of providing depreciation:
(i) Straight line method or Fixed instalment method or Original cost method
(ii) Written down value method or Diminishing balance method
(iii) Sum of years of digits method
(iv) Machine hour rate method
(v) Depletion method
(vi) Annuity method
(vii) Revaluation method
(viii) Sinking fund method
(ix) Insurance policy method

(i) The errors that make up for each other or neutralise each other are known as compensating errors. These errors may occur in related or unrelated accounts.
(ii) Thus, excess debit or credit in one account may be compensated by excess credit or debit in some other account. These are also known as offsetting errors.

Dr. Trading account for the year ended 31st December, 2016 Cr.

Particulars	Rs	Particulars	Rs
To Opening stock	10,000	By Sales	40,600
To Purchases	26,100	By Closing stock	13,500
To Gross profit c/d	18,000
	54,100		54,100

All accounts relating to tangible and intangible properties and possessions are called real accounts

(i) Sales book is maintained to record only credit sale of goods in which the business is dealing.
(ii) Cash sale of goods and sale of property and assets whether for cash or on credit are not recorded in the sales book. This book is also named as sales day book, sold day book, sales journal or sale register.

According to R.N. Carter defines, "Book keeping is the science and art of recording correctly in the books of account all those business transactions of money or money's worth".

(i) Measurement :
1. The main function of accounting is to keep systematic record of business transactions, post them to the ledger and ultimately to prepare the final accounts.
2. It also shows the current financial position of the business enterprises.
(ii) Comparison :
1. Accounting helps to compare the actual performance with the planned performance.
2. It is also possible to compare with the accounting policies.

(i) When the trial balance does not tally, the amount of difference is placed to the debit (when the total of the credit column is higher than the debit column) or credit (when the total of the debit column is higher. than the credit column) to a temporary account known as 'suspense account'.
(ii) Suspense account will remain in the books until the location and rectification of errors.
(iii) If all the errors are located and rectified, the suspense account gets closed.

Dr. Trading account for the year ended 31^st December 2017 Cr.

Particulars	Rs	Rs	Particulars	Rs	Rs
To Adjusted purchases		70,000	By Sales		1,70,000
To Freight inwards		5,700
To Royalty on goods Purchased		4,300
To Wages		8,000
To Octroi on purchase of goods		4,000
To Gross profit c/d		78,000
		1,70,000			1,70,000

The advantages of maintaining subsidiary books can be summarised as under :
(i) Proper and systematic record of the business transactions : All the business transactions are classified and grouped conveniently as cash and non cash transactions, which are further classified as credit purchases, credit sales and returns etc.
(ii) Convenient posting: All the transactions of a particular nature are recorded at one place, i.e., in one of the subsidiary books. For Example: All credit purchases of goods are recorded in the purchases book and all credit sales of goods are recorded in the sales book.
(iii) Division of work: As journals are sub-divided, the work will be sub-divided and different persons can work on different books at the same time and the work can be speedily completed.
(iv) Efficiency: The sub-division of work gives the advantage of specialisation. Thus specialisation leads to efficiency in accounting work.
(v) Helpful in decision making: Subsidiary books provide complete details about every type of transactions separately. Hence the management can use the information as the basis for deciding its future actions.
(vi) Prevents errors and frauds: Internal check becomes more effective as the work can be divided in such a manner that the work of one person is automatically checked by another person. With the use of internal check, the possibility of occurrence of errors or fraud may be avoided or minimised.
(vii) Availability of requisite information at a glance : The maintenance of subsidiary books helps in obtaining the necessary information at a glance.

S.No.	Basis of Distinction	Journal	Ledger
1.	Book	It is the book of prime entry.	It is the main book of account
2.	Stage	Recording of entries in these books is the first stage	Recording of entries in the ledger is the second stage.
3.	Process	The process of recording entries in the books is called "Journalising".	The process of recording entries in the ledger is called "Posting".
4.	Transactions	Transactions relating to a person or property or expenses are spread over.	Transactions relating to a particular account are found together on a particular stage.
5.	Net effect	The final position of a particular account can not be found.	The final position of a particular account are found together on a particular stage.
6.	Tax authorities	Do not rely upon these books.	Rely on the ledger for assessment purpose.

The following are the limitations of trial balance.
(i) It is possible to prepare trial balance of an organisation, only if the double entry system is followed.
(ii) Even if some transactions are omitted, the trial balance will tally.
(iii) Trial Balance may tally even though errors are committed in the books of account.
(iv) If trial balance is not prepared in a systematic way, the final accounts prepared on the basis of trial balance may not depict the actual state of affairs of the concern.
(v) Agreement of trial balance is not a conclusive proof of the arithmetical accuracy of entries made in the accounting records.

(i) Only financial transactions are to be recorded because it is due to Money Measurement concept, which states that only those transactions are to be recorded in the books of accounts which consist of cash.
(ii) Hence it is concerned with the Nominal value not the real value.
(iii) For example Mohan purchase television for Rs.12,000. So this, will recorded in journal entry book as it has cash transactions.

(i) Accounting is the systematic process of identifying, measuring, recording, classifying, summarising, interpreting and communicating financial information.
(ii) Accounting gives information on :
1. the resources available
2. how the available resources have been employed and
3. the results achieved by their use.
(iii) The profit earned or loss incurred during the accounting period, value and nature of assets, liabilities, and capital can be ascertained from the information recorded in accounts.

	Particulars		L.F.	Dr.	Cr.
a	Anitha A/c	Dr		50
	To Vanitha A/c				50
	(Amount paid to Anitha wrongly debited to Vanitha account, now rectified)
b	Sales A/c	Dr		500
	To Furniture A/c				500
	(Sale of furniture wrongly credited to sales account, now rectified)
c	Purchases A/c	Dr		750
	Sales A/c	Dr		750
	To Natarajan A/c				1,500
	(Purchases from Natarajan wrongly passed through sales book, now rectified)
d	Machinery A/c	Dr		1.000
	To Wages A/c				1,000
	(Wages paid for erection of machinery wrongly debited to wages account, now rectified)

Particulars	Amount Rs	Amount Rs
Bank overdraft as per cash book		20,000
Add: Cheque deposited but not yet credited	4,000
Interest on overdraft	2,000
Amount wrongly debited by bank	300
Cheque deposited but dishonoured	2,000	8,300
		28,300
Less: Cheques issued but not yet credited	1,000
Rent collected by bank	500
Cheque issued but dishonoured	5,000	6,500
Overdraft as per bank statement		21,800

In the Books of Kamala Stores Sales Book

Date	Particulars	Outward Invoice No.	L.F	Amount
				Details (Rs)	Total (Rs)
2017 May 2	Naveen Stores
	5 computer tables @ Rs 1,750				8,750
May 9	Deepa& Co.,
	6 dining tables @ Rs 1,900				11,400
May 15	Rajesh
	10 dressing tables @ Rs 2,750				27,500
May 24	Anil
	5 wooden tables @ Rs 1,250				6,250
	Sales A/c                        Cr.				53,900

Note:
(i) Sold of old computers on May 27 should not be recorded in this book, because computer is an asset for firm dealing in Furniture.
(ii) The transaction of cash sales on May 29 should not be recorded in this book.

S.No.	Transaction	Cash Rs.	Stock Rs.	Bank Rs.	Total Assets Rs.	=	Total Liabilities Rs.	Capital Rs.	Creditors Rs.
i)	Opening balance	+20,000	+50,000	+80,000				+1,50,000
	Balance	+20,000	+50,000	+80,000				+1,50,000
	Equation				+1,50,000	=	+1,50,000
ii)	Credit Purchases		+10,000						+10,000
	Balance	+20,000	+60,000	+80,000				+1,50,000	+10,000
	Equation				+1,60,000	=	+1,60,000
iii)	Bank charges			-500				-500
	Balance	+20,000	+60,000	+79,500				+1,49,500	+10,000
	Equation				+1,59,500	=	+1,59,500
iv)	Paid Suresh in full settlement			-9,700				+300	-10,000
	Balance	+20,000	+60,000	+69,800				+ 1,49,800	0
	Equation				+1,49,800	=	+1,49,800
v)	Credit Purchases		+15,000						+ 15,000
	Balance	+20,000	+75,000	+69,800				+1,49,800	+ 15,000
	Equation				+1,64,800	=	+1,64,800
vi)	Goods returned		-4,000						-4,000
	Balance	+20,000	+71,000	+69,800				+1,49,800	+11,000
	Equation				+1,60,800	=	+1,60,800

In the Books of Seshadri Cash Book (Single column)

Date	Receipts	R.N	L.F	Amount Rs	Date	Payments	V.N	L.F	Amount Rs
2017 May					2017 May
1	To Balance c/d			40,000	7	By Wages A/c			2,000
5	To Swathi A/c			4,000	10	By Purchases A/c			6,000
15	To Sales A/c			9,000	18	By Computer A/c			15,000
30	To Interest A/c			500	22	By Sabapathi A/c			5,000
					28	By Salary A/c			2,500
					31	By Balance c/d			23,000
				53,000					53,000
July 1	To Balance b/d			23,000

Dr                                    Ledger Account Cash Account                                                                        Cr

Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2017 July 1	To Sankar Capital A/c		1,00,000	2017 July 9	By Wages A/c		6,000
5	To Sales A/c		10,000	19	By Salaries A/c		8,000
				20	By Advertisement A/c		4,000
				31	By Balance c/d		92,000
			1,10,000				1,10,000
2017 Aug. 1	To Balance b/d	92,000

Dr                                               Shankar Capital Account                                                     Cr

Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2017 July 31	To Balance c/d		1,00,000	2017 July 1	By Cash A/c		1,00,000
			1,00,000				1,00,000
				2017 Aug. 1	By Balance b/d		1,00,000

Dr                                                       Sales Account                                                            Cr

Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2017 July 31	To Balance c/d		10,000	2017 July 05	By Cash A/c		10,000
			10,000				10,000
				2017 Aug. 1	By Balance b/d		10,000

Dr                                                       Wages Account                                                            Cr

Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2017 July 9	To Cash A/c		6,000	2017 July 31	By Balance c/d		6,000
			6,000				6,000
2017 Aug. 1	To Balance b/d		6,000

Dr                                                       Salaries Account                                                            Cr

Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2017 July 19	To Cash A/c		8,000	2017 July 31	By Balance c/d		8,000
			8,000				8,000
2017 Aug. 1	To Balance b/d		8,000

Dr                                                       Advertisement Account                                            Cr

Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2017 July 20	To Cash A/c		4,000	2017 July 31	By Balance c/d		4,000
			4,000				4,000
2017 Aug. 1	To Balance b/d		4,000

Trial Balance

S.No	Name of account	L.F	Debit Balance	Credit Balance
1	Bank Loan			2,00,000
2	Bills Payable			1,00,000
3	Stock		70,000
4	Capital			2,50,000
5	Purchases		1,80,000
6	Sales			3,00,000
7	Debtors		4,00,000
8	Bank		2,00,000
	Total		8,50,000	8,50,000