MIS - Management Information System
CPU - Central Processing Unit

Dual aspect principle: It is the basis for Double Entry, system of book-keeping. All business transactions recorded in accounts have two aspects receiving benefit and giving benefit. For example, when a business acquires an asset it must pay cash.
Here, the asset is one aspect (receiving benefit) and the cash is another aspect (giving benefit).

Journal: The books in which a transaction is recorded for the first time from a source document are called "Books of original entry or prime entry". Journal is one of the books of original entry in which transactions are originally recorded in a chronological (day-to-day) order according to the principles of double entry system. Journal is a date-wise record of all the transactions with details of the accounts debited and credited and the amount of each transaction.

The ledger that is normally use in a majority of business concern is a bound notebook. But in bigger concerns, instead of bound note-book, loose-leaf ledger is used. In a loose-leaf ledger, appropriate ruled sheets of thick paper are introduced and fixed up with the help of a binder.
Whenever necessary additional pages may be inserted, completed accounts can be removed and the accounts may be arranged and rearranged in the desired order. This type of ledger is known as Loose-Leaf Ledger.

According to Proof Carter, "A Profit and loss account is an account into which all gains and losses are collected, in order to ascertain the excess of gains over the losses or vice-versa".

The goods remaining unsold at the end of the accounting period are mown as closing stock.

Car cost on 1st July, 2012 = Rs. 4,00,000
Total Depreciation = \(4,00,000\frac { 5 }{ 100 } \times \frac { 9 }{ 12 } \)
= Rs. 45,000
Car was used for Rs. 20,000 km = for first 15,000 km for business use and for remaining 5,000 km for . personal use. Therefore proportion of usage = 3 : 1, Hence total depreciation is to be divided in 3 : 1 i.e., Rs. 33,750 and Rs. 11,250.

Rs.3,00,000 will be deducted from purchases on the debit die of trading account, Rs.1,20,000 will be shown on the debit side of profit and loss account and Rs.1,80,000 will be shown on the assets side of the balance sheets.

A computer system accepts input in the form of raw data, processes it and gives desired results called output.

Revenue profit is the Profit which arises from the normal course of the business. i.e., Net profit the excess of revenue receipts over revenue expenditure.

(i) The failure of the accountant to record a transaction in the books of accounts is known as an error of omission.
(ii) It can be complete omission or partial omission.

Isurance premium paid but not entered in cash book is Rs. 2,500

Wrong credit in cash book is Rs.1,000
Instead of personal bank account he can open business bank account (i.e.) current account

Yes, she maintains a bank account for her business

Credit transactions are recorded in the special purpose books, i.e.,
(a) Purchase book
(b) Sales book
(c) Purchase returns book
(d) Sales returns book

The need for accounting standards is:
1. To promote better understanding of financial statements.
2. To help accountants to follow uniform procedures and practices.

Researchers to carry out their research can use accounting information and make use of the published financial statements for analysis and evaluation.

In calculation of the due date three extra days are added, to the specified period of the bill is called "Days of grace".

According to J.R. Batliboi "A trial balance is a statement, prepared with the debit and credit balances of the ledger accounts to test the arithmetical accuracy of the books".

(i) The income which has been earned during the current accounting year but not received till the end of that accounting year is called as accrued income.
(ii) It generally happens in case of amount to be received on account of commission, interest, dividend, etc

(i) In a firm there will be a number of items, both expenses and incomes, which have to be adjusted.
(ii) All unadjusted items which need to be brought into books of accounts at the time of preparing final accounts are called "Adjustments".
(iii) The journal entries passed to effect the required adjustment are known as adjusting entries.

A mnemonic code consists of alphabets or abbreviations as symbols to codify a piece of information.
For example:

The physical components of a computer constitute its hardware. Hardware consists of input devices and output devices that make a complete computer system. Examples of input devices are keyboard, optical scanner, mouse, joystick, touch screen and slylus which are used to feed data into the computer. Output devices such as monitor and printer are media to get the ouput from the computer.

The process of allocation of the cost of a fixed asset oyer its useful life is known as depreciation

(i) Trading account provides information about Gross Profit or Grass Loss.
(ii) It provides an opportunity to safeguard against possible losses.
(iii) It provides information about direct expenses and direct incomes.

The expenditure incurred for day to day running of the business or for maintaining the earning capacity of the business is known as revenue expenditure. It is recurring in nature.

i) Capital expenditure
ii) Revenue receipt
iii) Capital expenditure
iv) Capital receipt.

(a) Purchases returns account should be credited with Rs. 500
(b) Purchases returns account should be debited with Rs. 600
(c) Sales returns account should be debited with Rs. 700
(d) Sales returns account should be credited with Rs. 800

(a) No
(b) No
(c) No
(d) No
(e) Yes

Causes of disagreement between the balances shown by the cash book and bank statement.
(i) Cheques issued but not yet presented for payment.
(ii) Cheques paid into bank for collection but not yet collected.

Value of trust is being violated by the accountant by passing a dummy entry and not even informing the seniors about it.

If bank allows the customer to draw more money from bank account than the actual amount lying in the bank account, then it will have negative balance. Such negative bank balance is called overdraft

(i) A three column cash book includes three amount columns on both sides, i.e., cash, discount and bank, This cash book is prepared in the same way as simple and double column cash books are prepared.
(ii) Opening balance, cash deposited into bank, cheque deposited in the bank appear in the bank column on the debit side of the three column cash book.
(iii) All the transactions which decrease bank balance are recorded in the bank column on the credit side

The process of analysing the business transactions under the heads of debit and credit and recording them in the journal is called journalising.

(i) Invoice is a business document or bill or statement giving the details of goods sold as to the quantity, quality, price, total value, etc.
(ii) Thus the invoice is a source document of prime entry both for the buyer and seller. It is purchase invoice or inward invoice for the buyer and sales invoice or outward invoice for a seller

(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.

(i) Cash book is the book in which only cash transactions are recorded. Cash receipts are recorded in the debit side while cash payments are recorded in the credit side.
(ii) The cash book is the book of original entry or prime entry.

A trial balance can be prepared in the following methods.
(i) Total Method
(ii) Balance Method.
(iii) Total and Balance Method

(i) A trial balance is a statement containing the debit and credit balances of all Ledger Accounts on a particular date.
(ii) It is arranged in the form of debit and credit columns placed side by side and prepared with the object of checking the arithmetical accuracy of entries made in the books of accounts and to facilitate preparation of financial statements.

According to L.C. Cropper, "the book which contains a classified and permanent record of all the transactions of a business is called the Ledger".

(i) Balance is the difference between the total debits and the total credits of an account.
(ii) Balancing means the writing of the difference between the amount columns of the two sides in the lighter (Smaller Total) side, so that the grand totals of the two sides become equal.

a) Debtors :
A person who receives a benefit without giving money or money's worth immediately, but liable to pay in future or in due course of time.
b) Creditors :
A person who gives a benefit without receiving money or money's worth immediately but to claim in future

(i) The Consistency convention implies that the Accounting practice should remain the same from one year to another.
(ii) The results of different years will be comparable only when same accounting methods are followed from year to year.
(iii) The firm should be modify the method of charging the depreciation from one to another.
(iv) If any change has to be incorporated, valid reasons for such a change should be emphasised.

(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.

American Accounting Association has defined accounting as "the process of identifying, measuring and communicating economic information to permit informed judgments and decisions by users of the information".