The advantages of book-keeping are:
(i) Transactions are recorded systematically in chronological order in the hooks of accounts.
(ii) Book-keeping is useful to get financial information,
(iii) It helps to have control over various business activities:
(iv) Records provided by business serve as a legal evidence in case of any dispute.
(v) Comparison of financial information over the years is possible. Also comparison of financial information of different business units is facilitated.
(vi) Book-keeping is useful to find out the tax liability.

Steps in posting:
(i) Procedure of posting for an account which has been debited in the journal entry:
Step 1: Locate in the ledger, the account to be debited and enter the date of the transaction in the date column on the debit side.
Step 2: Record the name of the account credited in the journal in the particulars column on the debit side as "To .......... (name of the account credited)".
Step 3: Record the page number of the journal in the J.F. column on the debit side of the ledger. And in the journal, write the page number of the ledger on which a particular account appears in the L.F. column.
Step 4: Enter the relevant amount in the amount column on the debit side.
(ii) Procedure of posting for an account which has been credited in the journal entry:
Step 1: Locate in the ledger, the account to be credited and enter the date of the transaction in the date column on the credit side.
Step 2: Record the name of the account debited in the journal in the particulars column on the credit side as "By................ (name of the account debited)".
Step 3: Record the page number of the journal in the J.F. column on the credit side in the ledger. And in the journal, write the page number of the ledger on which a particular account appears in the L.F column.
Step 4: Enter the relevant amount in the amount column on the credit side.

Dr. Profit and Loss Account of M/s. Riya Ltd. for the year ended 31.03.2002 Cr.

Particulars	Rs.	Particulars	Rs.
To Rent	15,000	By Gross profit	5,25,000
To Interest on Loan	5,000	By. Commission received	3,000
To Distribution charges	2,500	By Interest received	5,000
To Bad debts	2,200	By Discount received	2,000
To Taxes no insurance	2,200
To Salaries and wages	1,00,000
To Depreciation	5,000
To Office expenses	1,500
To Salesman salary	8,000
To Stationery and printing	500
To Advertising	9,000
To Net profit	3,89,300
(Transferred to Capital A/c)
	5,35,000		5,35,000

In the books of Kuna  Cash Book (Single column)

Date	Particulars	L.F	Amount Rs	Date	Payments	L.F	Amount Rs
2017				2017
Jan.1	To Balance b/d		11,200	Jan.7	By rent A/c		30
Jan.5	To Ramesh A/c		300	Jan.10	By Mohan A/c		700
Jan.8	To Sales A/c		300	Jan.27	by Furniture		200
				Jan.31	By Salaries A/c		100
				Jan.31	By Balance C/d		10,770
			11,800				11,800
Feb.1	To Balance B/d		10,770

Procedure
1. Open new excel sheet.
2. Input the table as given in the question.
3. Enter the data “Result” in Cell A3.
4. Type the following in Cell B3
B3 = IF(B1 > = 50,”Pass”,”Fail”)
5. Copy the formula from B3 to C3, D3 and E3
Output

Student	Percentage of marks	Result
1	59	Pass
2	60	Pass
3	65	Pass
4	45	Fail
5	35	Fail

Certain errors affect the agreement of trial balance. If such errors have occurred in the books of accounts, the total of debit and credit balances will not be the same. The trial balance will not tally.
Examples of such errors are follows:
(i) Entered in the journal but posted to one account and omitted to be posted to the other.
(ii) Posting an amount to the wrong side of a ledger account
(iii) Posting twice in a ledger account
(iv) Over-casting or Under-casting in a subsidiary book
(v) Posting a wrong amount to the correct sideof an account
(vi) Posting a wrong amount to the wrong side of an account
(vii) Errors arising in carrying forward the page total from one page to the next page of an account or subsidiary book.
(viii) Errors arising in the balancing of an account.
(ix) Omission to post an entry from a subsidiary book.

Adjusting entry

Date	Particulars	L.F.	Debit Rs	Credit Rs
2018	Capital A/c                                                 Dr.		50
March 31	To Interest on drawings A/c			50
	(Interest on drawings provided)
March 31	Bad debts A/c                                             Dr .		500
	To Sundry debtors A/c			500
	(Bad debts written off)
March 31	Depreciation A/c                                          Dr.		1,000
	To Furniture A/c			1,000
	(Depreciation provided on furniture)

S.no	Transaction	Cash	Stock	Debtors	Total Assets		Total Liabilities	Capital	Creditors
i)	Ramya started business	+25,000	-	-				+25,000
	Balance	+25,000						+25,000
	Equation				+25,000	=	+25,000
ii)	Credit purchases		+20,000						+20,000
	Balance	+25,000	+20,000					+25,000	+20,000
	Equation				+45,000	=	+45,000
ii)	Credit Sales		-18,000	+25,000				+,7000
	Balance	+25,000	+2,000	+25,000				+32,000	+20,000
	Equation				+52,000	=	+52,000
iv)	Cash withdraw for personal use	-5,000						-5,000
	Balance	+20,000	+2,000	+25,000				+27,000	+20,000
	Equation				+47,000	=	+47,000

S.No	Basis of Distinction	Trade Discount	Cash Discount
1	Parties	It is a reduction granted by a manufacturer/supplier.	It is a reduction granted by a wholesaler to the Buyer.
2	Purpose	To help the retailer to earn some profit.	To encourage prompt payment within a stipulated period.
3	Time when allowed	It is allowed on the purchase of goods.	It is allowed when payment is made within the specified period
4	Disclosure	It is shown by way of deduction in the invoice itself.	It is not shown in the invoice.
5	Ledger Account	A separate account is not opened in the Ledger.	A separate account. is opened in the Ledger for discount received and discount allowed.

(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.

S.No.	Transactions	Classification
i)	Rs.3,00,000 worth of debentures are issued for raising loan.	Capital receipt
ii)	Rs.5,000 received as dividend from the investment on shares.	Revenue receipt
iii)	Gokul started business with Rs.4,00,000.	Capital receipt
iv)	A machinery costing Rs.50,000 was sold for Rs.50,000.	Capital receipt
v)	Creditors allowed discount Rs.30,000.	Revenue receipt

Dr. Trading for the year ended 31st March 2016

Particulars	Rs.	Rs.	Particulars	Rs.	Rs.
To Opening Stock		10,000	By Sales	3,00,000
To Purchases	1,60,000		Less: Returns inward	16,000	2,84,000
Less: Returns outward	10,000	1,50,000	By Closing Stock		20,000
To Wages	30,000
Add: Outstanding	4,000	34,000
To Carriage inwards		10,000
To Freight inwards		8,000
To Gas and fuel	8,000
Less: Prepaid	1,000	7,000
To Gross profit c/d		85,000
		3,04,000			3,04,000

Ledger accounts

Dr. Machinery Account Cr.

Date	Particulars		Date	Particulars
2015 Jan			2015 20/100
1	To Bank A/c	90,000	31	By Depreciation A/c (1,00,000 \(\times\)20%)	20,000
	To Bank a/c	10,000	31	By Balance c/d	80,000
		1,00,000			1,00,000
2016 Jan 1	To Balance b/d	80,000	2016 Dec 31	By Depreciation A/c	16,000
				(80,000 \(\times\) 20%)
			Dec 31	By Balance c/d	64,000
		80,000			80,000
2017 Jan 1	To Balance b/d	64,000	2017 July 1	By Depreciation A/c	6,400
				(64,000\(\times\)20/100\(\times\)6/12
	To Profit & Loss A/c (Profit on sale)	400	July 1	By Bank A/c	58,000
		64,400			64,400

(i) Open a new spreadsheet in MS-EXCEL
(ii) Enter labels and values in the cells as given above
iii) To calculate DA in Cell C2
= B2*125%
iv) To calculate HRA in Cell D2
= IF(B2>8000,4000,2500)
v) To calculate Gross Pay in Cell E2
=SUM(B2:D2)
vi) To calculate PF in Cell F2
=(B2+C2)*12%
vii) To calculate TDS in Cell G2
=IF(E2>25000,E2*10%,0)
viii) To calculate Net Pay in Cell H2
=E2-(F2+G2)
Output

	A	B	C	D	E	F	G	H
1	Name	Basic Pay(Rs.)	DA	HRA	Gross pay	PF	TDS	Net Pay
2	Sasi	8000	10000	2500	20500	2160	0	18340
3	Hari	10000	12500	4000	26500	2700	2650	21150
4	Karthi	6500	8125	2500	17125	1755	0	15370
5	Viji	12000	15000	4000	31000	3240	3100	24660
6	Soni	9000	11250	4000	24250	2430	0	21820

Dr. In the Books of Deri Trading and Prout and loss account for the year ended 31.03.2018 Cr.

Particulars	Rs.	Particulars	Rs.
To Opening stock	10,000	By Sales	1,22,500
To Purchases	95,000	By Closing Stock	8,000
To Freight inwards	750	By Gross loss c/d	2,750
To Wages	27,500
	1,33,250		1,33,250
To Gross loss b/d	2,750	By Net loss c/d	6,250
To Postage	150	(Transferred to capital a/c)
To Rent paid	2,500
To Sundry expenses	850
	6,250		6,250

Balance Sheet

Liabilities	Rs.	Rs.	Assets	Rs.	Rs.
Capital	1,00,000		Cash		2,500
Less: Net loss	6,250		Bank		5,000
	93,750		Machinery		50,000
Less: Drawings	4,500	89,250	Debtors		13,500
Creditors		5,000	Furniture		17,250
Bills payable		2,000	Closing stock		8,000
		96,250			96,250

Journal Entries

S.No.	Particulars		L.F.	Debit Rs	Credit Rs
(a)	Machinery A/c	Dr.		3,000
	To Purchases A/c				3,000
	(Correction of wrong debit to purchases A/c for Machinery purchased)
(b)	Commission A/c	Dr.		200
	To Interest A/c				200
	(Correction of wrong credit to commission A/c for interest received)
(c)	Salary A/c	Dr.		1,000
	To Tamil Selvan A/c				1,000
	(Salary paid to Tamil Selvan was debited to his personal account is now corrected)
(d)	Sales A/c	Dr.		300
	To Furniture A/c				300
	(Being sale of furniture costing Rs 5,000 was credited to sales A/c, now rectified)
(e)	Purchases A/c	Dr.		800
	To Soundarapandian A/c				800
	(Being goods purchased frdm Soundarapandian were not received in the books of accounts, now rectified)

Dr.                            In the Books of Mr. Raghavan Cash Book (Three columns)                Cr.

Date	Receipts	R.N.	L.F.	Amount			Date	Payments	V.N.	L.F.	Amount
				Discount allowed Rs.	Cash Rs.	Bank Rs.					Discount reveived Rs.	Cash Rs.	Bank Rs.
2017 June							2017 June
1	To Balance b/d				50,000		1	By Balance b/d					15,000
3	To Cash A/c		'C'			25,000	3	By Bank A/c		'C'		25,000
5	To Parthiban's A/c			60	3,690		8	By Bank A/c		'C'		3,690
8	To Cash A/c		'C'			3,690	10	By Cash A/c		'C'			8,000
10	To Bank A/c		'C'		8,000		14	By Parthiban's A/c					3,690
30	To Cash A/c		'C'			27,500	18	By Rent A/c				500
							20	By Bank charges A/c					150
							30	By Bank A/c		'C'		27,500
							30	By Balance c/d				5,000	29,350
				60	61,690	56,190						61,690	56,190
July 1	To Balance b/d				5,000	29,350

Bank Reconciliation Statement as on 31^st March 2018

Particulars	Amount Rs	Amount Rs
Credit balance as per bank statement		2,500
Less:  Cheques deposited but not credited	10,000
Overcasting payment	2,000	12,000
Balance as per cash book		9,500

Dr.                                        In the Books of Ahamad Cash Book (with Cash and Discount columns)                       Cr.

Date	Receipts	R.N.	L.F.	Amount		Date	Payments	V.N.	L.F.	Amount
				Discount allowed Rs	Cash Rs					Discount received Rs	Cash Rs
2017 Oct						2017 Oct
1	To Balance c/d				37,500	7	By Velen A/c			150	15,850
3	To Sales A/c				33,000	15	By Drawings A/c				4,800
25	To Perumal A/c			200	19,000	22	By Bank A/c				22,700
26	To Bank A/c				17,500	27	By Gopala Krishnan A/c			50	2,950
						28	By Subramanian A/c			100	14,200
						29	By Purchases A/c				13,500
						30	By Advertising A/c				1,500
						31	By Balance c/d				31,500
				200	1,07,000					300	1,07,000
Nov. 1	To Balance b/d				31,500

In the books of Kumaran Journal entries

Date	particulars	L.F	Debit Rs.	Credit Rs.
2017 April 1	Cash A/c    Dr.		1,00,000
	Stock A/c   Dr.		40,000
	Debtor A/c   Dr.		10,000
	Furniture A/c   Dr.		10,000
	To Creditor A/c (Anush)			40,000
	To Capital A/c(Balancing Figure)			1,20,000
	(Balancing of assets and liabilities brought forward)

Dr.                                         Ledger Account Cash Account                                               Cr.

Date	Particulars	J.F.	Amount Rs	Date	Particulars	J.F.	Amount Rs
2017 Apr 1	To Capital A/c		1,00,000	2017 Apr 30	By Balance c/d		1,00,000
			1,00,000				1,00,000
2017 May 1	To Balance c/d		1,00,000

Dr.                                                                Stock Account                                                   Cr.

Date	Particulars	J.F.	Amount Rs	Date	Particulars	J.F.	Amount Rs
2017 Apr 1	To Capital A/c		40,000	2017 Apr 30	By Balance c/d		40,000
			40,000				40,000
2017 May 1	To Balance b/d		40,000

Dr.                                                 Rohit Account                                                             Cr.

Date	Particulars	J.F.	Amount Rs	Date	Particulars	J.F.	Amount Rs
2017 Apr 1	To Capital A/c		10,000	2017 Apr 30	By Balance c/d		10,000
			10,000				10,000
2017 May 1	To Balance b/d		10,000

Dr.                                                           Furniture Account                                                    Cr.

Date	Particulars	J.F.	Amount Rs	Date	Particulars	J.F.	Amount Rs
2017 Apr 1	To Capital A/c		10,000	2017 Apr 30	By Balance c/d		10,000
			10,000				10,000
2017 May 1	To Balance b/d		10,000

Dr.                                                       Anush Account                                                            Cr

Date	Particulars	J.F.	Amount Rs	Date	Particulars	J.F.	Amount Rs
2017 Apr 1	To Balance c/d		40,000	2017 Apr 1	By Sundry Assets A/c		40,000
			40,000				40,000
				2017 May 1	By Balance b/d		40,000

Dr.                                              Kumaran's Capital A/c                                                       Cr.

Date	Particulars	J.F.	Amount Rs	Date	Particulars	J.F.	Amount Rs
2017 Apr 30	To Balance c/d		1,20,000	2017 Apr 1	By Cash A/c		1,20,000
			1,20,000				1,20,000
				2017 May 1	By Balance b/d		1,20,000

In the books of Baskar Trial Balance as on 31.03.2017

S.No	Name of account	L.F.	Debit balance Rs	Credit balance Rs
1.	Opening stock		40,000
2.	Capital			90,000
3.	Sales			1,77,200
4.	Salaries		12,000
5.	Bills payable			9,450
6.	Telephone charges		2,350
7.	Creditors			16,000
8.	Purchases		85,000
9.	Debtors		25,000
10.	Carriage inwards			16,500
11.	Bills receivable		20,000
12.	Commission received			5,550
13.	Cash at bank		17,000
14.	Furniture		19,000
15.	Plant, & Machinery		55,800
16.	Repairs		550
17.	Suspense Account		5,000
	Total		2,98,200	2,98,200

In the Books of M/s. Ram & Co., Sales Book

Date	Particulars	Outward Invoice No.	L.F	Amount
				Details (Rs)	Total (Rs)
2017 Jan 1	Anbu& Co.,
	20 reams of white paper @ Rs. 150				3,000
Jan 2	Jagadish & Sons
	6 dozen pens @ Rs. 360				2,160
Jan 15	M/s. Elango & Co.,
	10 drawing boards @ Rs. 170				1,700
	Sales A/c                               Cr.				6,860

Note:
(i) The transaction of cash sales on January 10 should not be recorded in sales book.
(ii) Sold of writing tables on January 20 should not be recorded in this book, because table is an asset for the firm dealing in furniture.

S.No.	Transaction	Cash Rs.	Stock Rs.	Bank Rs.	Furniture Rs.	Total Assets Rs.	=	Total Liabilities Rs.	Capital Rs.
a)	Started business with cash	+80,000							+80,000
	Balance	+80,000							+80,000
	Equation					+80,000	=	+80,000
b)	Cash purchases	-30,000	+30,000
	Balance	+50,000	+30,000						+80,000
	Equation					+80,000	=	+80,000
c)	Paid salaries by cash	-5,000							-5,000
	Balance	+45,000	+30,000						+75,000
	Equation					+75,000	=	+75,000
d)	Deposited money in CDM	-5,000	+5,000
	Balance	+40,000	+35,000						+75,000
	Equation					+75,000	=	+75,000
e)	Introduced additional capital	+10,000							+10,000
	Balance	+50,000	+35,000						+85,000
	Equation					+85,000	=	+85,000

External users are the persons who are outside the organisation but make use of accounting information for their own purposes. They are:
(i) Creditors and Financial institutions:
1. Suppliers of goods and services, commercial banks, public deposit holders, debenture holders etc; are included in this category.
2. They are interested in the liquidity position and repaying capacity of the business to know the safety of getting the interest and get back the principal amount.
(ii) Investors:
1. Persons who are interested in investing their surplus funds should know about the financial condition of a business unit while making their investment decisions.
2. They are more interested in future earning and risk.
(iii) Customers :
1. Those who use the products and services of a firm are interested in knowing the justification for the prices charged to them.
2. They examine the expenses, sales and profits to see if they are paying fair prices for the products and services.
(iv) Tax authorities:
1. Accounting information helps them in computing goods and services Tax, Income tax etc., to be collected from business units.
2. They scrutinise the revenues and expenses of business firms to determine their accuracy. "
(v) Government:
1. Government also administers prices of certain trades.
2. In such cases, government agencies have to ensure that the guidelines for pricing are followed.
vi) Researchers:
Researchers to carry out their research can make use of the published financial statements in their analysis and evaluation.

When goods meant for resale are sold, it is Called sales.

(i) Debts which cannot be recovered or become irrecoverable are called Bad debts.
(ii) It is a loss for the business and should be adjusted against profit.

A set of programs that form an interface between the hardware and the user of a computer system are referred to as software.

i)\( \text { Amount of depreciation per year } =\frac{\text { Original cost of the asset }-\text { Estimated scrap value }}{\text { Estimated useful life of the asset in years }} \)
ii) \( \text { Rate of depreciation } =\frac{\text { Amount of depreciation per year }}{\text { Original cost }} \times 100\)

Revenue receipt is the receipt of income which is earned during the normal course of business. It is recurring in nature. Examples.
i) Proceeds from sale of goods
ii) Interest on investments received
iii) Rent received
iv) Dividend received

(a) Sales account should be credited with Rs. 100
(b) Sales account should be debited with Rs. 200
(c) Purchases account should be debited with Rs. 300
(d) Purchases account should be credited with Rs. 400
Tutorial Note:
(a) In this case, the sales book is undercast by Rs. 100. The total of sales book is posted to the credit side of sales account in the ledger. The undercasting has resulted in undercrediting of sales account by Rs. 100. This is an error of commission. The error is only in sales account. There is short credit in sales account by Rs. 100. Hence, it is rectified by crediting sales account by Rs. 100.

It means balance lying with the bank or the deposits made by the firm are more than its withdrawals.

Personal accounts can be classified into natural, artificial and representative personal accounts

(i)  Goods returned by the customers may also be known as "returns inwards".
(ii)  Sales return book has got the same column as Sales Book.
(iii) In this book are recorded the transactions relating to goods sold on credit only.

Trial Balance

S.No	Name of account	L.F.	Debit balance Rs	Credit balance Rs
1	Purchases		2,00,000
2	Bank loan			1,50,000
3	Debtors		3,00,000
4	Stock		70,000
5	Sales			3,00,000
6	Creditors			1,00,000
7	Cash		1,80,000
8	Capital			2,00,000
	Total		7,50,000	7,50,000