Journal Entry

Date	Particulars	L.F	Debit Rs.	Credit Rs.
	Cash A/c		5,000
	To Sales A/c (Cash sales made)			5,000

(a) Sales account should be credited with Rs. 100.
(b) Purchases returns account should be debited with Rs. 200.

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.

Cash book with Cash and discount columns
Dr                                                                                                                   Cr

Date	Receipts	R.N	L.F	Amount		Date	Payments	V.N	L.F	Amount
				Discount  Rs	Cash Rs					Discount Rs	Cash Rs

(i) Transactions relating to previously purchased goods returned to the suppliers are recorded in a separate subsidiary book which is called purchases returns book.
(ii) Since goods are 'going out' to the suppliers, they are also known as 'returns outward' and the book is called as 'returns outward book or returns outward journal'.

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

The process of transferring the debit and credit items from the journal to the ledger accounts is called posting.

(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.

There are several persons who need the accounting information for various purposes. They can be classified into two.
(i) Internal users :
1. Owners
2. Management
3. Employees
(ii) External users :
1. Creditors and Financial institutions
2. Investors
3. Customers
4. General public
5. Tax authorities and regulatory bodies
6. Government
7. Researchers

The Steps involved in accounting are :
(i) Identifying the transactions and Journalising.
(ii) Posting and Balancing.
(iii) Preparation of Trial Balance.
(iv) Preparation of Trading Account.
(v) Preparation of Profit and Loss Account.
(vi) Preparation of Balance Sheet.

Rectification of Errors

S.No.	Particulars		L.F.	Debit Rs.	Credit Rs.
(a)	Machinery A/c	Dr.		3,500
	To Purchases A/c				3,500
	(Being the Purchase of plant wrongly entered in the purchases book rectified)
(b)	Salary A/c	Dr.		1,800
	To Raina A/c				1,800
	(Being Salaries paid to Raina wrongly debited to his account now rectified)
(c)	Commission A/c	Dr.		200
	To Interest Received A/c				200
	(Being Interest received Rs. 200 was credited to commission account, now rectified)
(d)	Purchased A/c	Dr.		1,800
	To Amudhanila A/c				1,800
	(Being goods purchased was not recorded in the books, now rectified)
(e)	Sales A/c	Dr.		350
	To Furniture A/c				350
	(Being the credit sale of used furniture credited to sales account, now rectified)

	Particulars		L.F.	Dr.	Cr.
a	Suspense A/c	Dr		2,000
	To Sales A/c				2,000
	(Under casting in the sales book rectified)
b	Machinery A/c	Dr		3,000
	To Purchases A/c				3,000
	(Purchase of machinery wrongly entered in the purchases book rectified)
c	Suspsense A/c	Dr		9
	To Mathi A/c				9
	(Excess amount posted to the debit of Mathi rectified)
d	Purchase returns A/c	Dr		200
	To Suspense A/c				200
	(Overcasting in the purchase returns book rectified)
e	Sales A/c	Dr		100
	To Suspense A/c				100
	(Excess amount carried forward in the sales book rectified)

Bank Reconciliation Statement as on 31^st March 2016

Particulars	Amount Rs	Amount Rs
Overdraft balance as per bank statement		1,26,640
Add: Cheques issued but not presented	23,360
Interest on Investment collected by the bank	24,000	47,360
		1,74,000
Less: Interest on overdraft but not recorded	3,200
Bank charges entered	600
Cheque deposited but not credited	43,400	47,200
Overdraft as per Cashbook		1,26,800

Bank Reconciliation Statement of Kamakshi Traders as on 31^st March 2018

Particulars	Amount Rs	Amount Rs
Balance as per cash book		15,000
Add: Cheques issued but not presented	1,500
Divided Received	200
Net payment entered twice in the Cashbook	300	2,000
		17,000
Less: Cheques deposited but not yet credited	1,000
Direct payment by bank	1,000
Locker Rent charged by the bank	1,200
Wrongly Debited in the bank	500	3,700
Balance as per bank statement		13,300

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 Rajeshwari Trial Balance as on 31.03.2017

S.No	Name of account	L.F.	Debit balance Rs	Credit balance Rs
1.	Opening Stock		1,00,000
2.	Salaries		36,000
3.	Creditors			1,32,000
4.	Bank		35,000
5.	Carriage inwards		18,000
6.	Rent received			9,000
7.	Discount allowed		6,000
8.	Purchases		3,48,000
9.	Bills payable			60,000
10.	Debtors		45,000
11.	Carriage outwards		15,000
12.	Capital			1,63,000
13.	Returns inward		9,000
14.	Discount received
15.	Trade expenses		18,000
16.	Sales
17.	Building		1,14,000
	Total		7,44,000	7,44,000

In the books of Ravichandran trial balance as on 31.12.2016

S.No	Name of account	L.F.	Debit balance Rs	Credit balance Rs
1.	Capital			1,50,000
2.	Debtors		22,800
3.	Rent received			500
4.	Bank overdraft			3,100
5.	Creditors			5,500
6.	Premises		1,46,000
7.	Opening Stock		10,000
8.	Purchases		45,000
9.	Sales			75,000
10.	Return inwards		1,000
11.	Discount allowed		800
12.	Discount received			1,000
13.	Wages		2,900
14.	Salaries		3,500
15.	Commission paid		1,100
16.	General expenses		2,000
	Total		2,35,100	2,35,100

In the books of Mary Journal Entries

Date	Particulars		L.F	Debit Rs	Credit Rs
2018 March 1	Cement bags A/c	Dr		20,000
	To Sibi A/c				20,000
	(Cement bags bought on credit)
2	Electricity charges A/c	Dr		500
	To Bank A/c				500
	(Electricity charged paid by net banking)
3	Sibi A/c	Dr		5,000
	To Purchases return A/c				5,000
	(Goods returned to Sibi)
4	Drawings A/c	Dr		1,000
	To Purchases A/c				1,000
	(Being goods taken for personal use)
5	Advertisements expenses A/c	Dr		2,000
	To Cash A/c				2,000
	(Advertisement expenses paid)
6	Mano A/c	Dr		20,000
	To Sales A/c				20,000
	(Credit sales)
7	Sales return A/c	Dr		5,000
	To Mono A/c				5,000
	(Goods returned to Mano)
8	Bank A/c	Dr		15,000
	To Mano A/c				15,000
	(Payment received from Mano through NEFT)

In the Books of Purchases Book

Date	Particulars	Inward Invoice No.	L.F.	Amount
				Details (Rs)	Total (Rs)
2017 April 1	Prasad
	100 meters silk @ Rs. 450			45,000
	75 meters velvet @ Rs. 180			13,500
April 20	Hari Ram & Sons
	50 rolls kada cloth @ Rs. 730			36,500
	80 rolls cotton cloth @ Rs. 650			52.000	88,500
	Purchases A/c                     Dr.				1,47,000

Note: The transaction of Cash sales on April 24 should not be recorded in this book.

In the Books of Sales Book

Date	Particulars	Outward Invoice No.	L.F	Amount
				Details (Rs)	Total (Rs)
2017 April 10	Rathinam
	60 meters silk @ Rs. 490			29,400
	50 meters velvet @ Rs. 210			10,500
	Sales to Rathinam				39,000
April 18	Nathan & Sons
	100 meters silk @ Rs. 510				51,000
	Sales A/c              Cr.				90,900

Journal Entries

Date	Particulars	L.F.	Debit Rs.	Credit Rs.
2017 Aug. 1	Cash A/c                                   Dr. To Dharma's Capital A/c                (Amount invested in business)		70,000	70,000
6	Cash A/c                                   Dr. To Ganesan's A/c                           (Cash received)		10,000	10,000
10	Rent A/c                                   Dr. To Cash A/c                              Dr. (Rent paid)		3,000	3,000
20	Cash A/c                                   Dr. To Commission received A/c          (Commission received)		5,000	5,000

Dr.                              Ledger Account Cash Account                       Cr.

Date	Particulars	J.F.	Amount Rs.	Date	particulars	J.F.	Amount Rs.
2017 Aug 1	To Dharma's Capital A/c		70,000	2017 Aug 10	By Rent A/c		3,000
6	To Ganesan's A/c		10,000	31	By Balance c/d		82,000
20	To Commission received A/c		5,000
			85,000				85,000
2017 Sep 01	To Balance B/d		82,000

Dr.                                        Dharma's Capital Account                                  Cr.

Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2017 Aug 31	To Balance c/d		70,000	2017 Aug 1	By Cash A/c		70,000
			70,000				70,000
				2017 Sep 1	By Balance b/d		70,000

Dr.                                                Ganesan's Account                                      Cr.

Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2017 Aug 31	To Balance c/d		10,000	2017 Aug 6	By Cash A/c		10,000
			10,000				10,000
				2017 Sep 1	By Balance b/d		10,000

Dr.                                                Rent Account                                                 Cr.

Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2017 Aug 10	To Cash A/c		3,000	2017 Aug 31	By Balance c/d		3,000
			3,000				3,000
	To Balance b/d		3,000		By Balance b/d

Dr.                                         Commission received Account                                  Cr.

Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2017 Aug 31	To Balance c/d		5,000	2017 Aug 20	By Cash A/c		5,000
			5,000				5,000
				2017 Sep 1	By Balance b/d		5,000

Dr.                                                  Anand Account                                       Cr.

Date	Particulars	J.F.	Amount Rs	Date	Particulars	J.F.	Amount Rs
2017 July 15	To Cash A/c		2,000	2017 July 01	By Cash A/c		4,000
20	To Cash A/c		4,000	18	By Purchases A/c		8,000
31	To Balance c/d		11,000	25	By Purchases A/c		5,000
			17,000				17,000
				2017 Aug 01	By Balance b/d		11,000

In the books of Manohar Journal Entries

Date	Particulars	L.F.	Debit Rs.	Credit Rs.
2018 March 1	Cash A/c                              Dr. To Manohar's capital A/c           (Account invested in business)		60,000	60,000
2	Furniture A/c                        Dr. To Cash A/c                               (Furniture bought for cash)		10,000	10,000
3	Purchases A/c                     Dr. To Cash A/c                               (Goods purchased by cash)		25,000	25,000
6	Purchases A/c                      Dr. To Kamalesh A/c                        (Credit purchases)		15,000	15,000
8	Cash A/c                               Dr. To Sales A/c                               (Credit sales)		28,000	28,000
10	Hari A/c                                 Dr. To Sales A/c                               (Credit sales)		10,000	10,000
14	Kamalesh A/c                        Dr. To Cash A/c                                (Cash paid)		12,000	12,000
18	Rent A/c                                Dr. To Cash A/c                                (Rent paid)		500	500
25	Cash A/c                                Dr. To Hari's A/c                                (Cash received)		8,000	8,000
28	Drawings A/c                         Dr. To Cash A/c                                 (Withdrawn for personal use)		4,000	4,000

An accountant designs the accounting procedures for an enterprise. He plays several roles in an organisation as follows:
(i) Record keeper :
1. The accountant maintains a systematic record of financial transactions.
2. He also prepares the financial statements and other financial reports.
(ii) Provider of information to the management :
The accountant assists the management by providing financial information required for decision making and for exercising control.
(iii) Protector of business assets :
The accountant maintains records of assets owned by the business which enables the management to protect and exercise control over these assets.
(iv) Financial advisor :
The accountant analyses financial information and advises the business managers regarding investment opportunities, strategies for cost savings, capital budgeting, provision for future growth and development, expansion of enterprise, etc.
(v) Tax Manager :
1. The accountant ensures that tax returns are prepared and filed correctly on time and payment of tax is made on time.
2. The accountant can advisee the managers regarding tax management, reducing tax burden, availing tax exemptions, etc.
(vi) Public relation officer :
The accountant provides accounting information to various interested users for analysis as per their requirements.

Importance of accounting is enumerated as below :
(i) Systematic records :
1. All the business transactions are recorded in the books of accounts.
2. Any event or happening which has financial effects is included in the accounting records.
(ii) Preparation of financial statements :
Results of business operations and the financial position of the concern are provided by accounting periodically through the preparation of financial statements namely profit and loss account and balance sheet.
(iii) Assessment of progress :
Analysis and interpretation of financial statements can be done to assess the progress made in different areas and it also identify the areas of weaknesses.
(iv) Information to interested groups :
Accounting supplies appropriate information to different interested groups 'like owners, creditors, management, employees, financiers, tax authorities, and government.
(v) Taxation :
Accounting records are the basis source for computation and settlement of sales tax, income tax, and other local taxes.

Opening Entry

Date	Particulars	L.F.	Debit Rs.	Credit Rs.
2017	Cash A/c                                                        Dr.		30,000
Jan1	Stock A/c                                                       Dr.		15,000
	Furniture A/c                                                  Dr.		3,000
	To Sundry creditors A/c			10,000
	To Capital A/c			38,000
	(Balance of assets and liabilities brought forward)

(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.

(i) When the cheques are issued by the business, it is immediately entered on the credit side of the cash book by the business.
(ii) But, this may not be entered in the bank statement on the same day.
(iii) It will be entered in the bank statement only after it is presented with the bank.
(iv) It is also known as an outstanding cheque.

When the two accounts involved in a transaction are cash account and bank account, then both the aspects are entered in cash book itself. As both the debit and credit aspects of a transaction are recorded in the cash book, such entries are called contra entries.
Example:
(i) When cash is paid into bank, it is recorded in the bank column on the debit side and in the cash column on the credit side of the cash book.
(ii) When cash is drawn from bank for office use, it is entered in cash column on the debit side and in the bank column on the credit side of the cash book.

(i) Insurance premium paid on the life of the proprietor is a personal account.
(ii) It is spend for the personal use of the proprietor not for the business purpose. Hence Drawings A/c should be debited.
The entry is 

Drawings A/c  Dr	xxxx
To Cash A/c		xxx

(i) Ledger account is a summary statement of all the transactions relating to a person, asset, liability, expense or income which has taken place during a given period of time and it shows their net effect. From the transactions recorded in the journal, the ledger account is prepared.
(ii) Ledger is known as principal book of accounts.
Utilities of ledger
1) Quick information about a particular account:
Ledger account helps to get all information about a particular account like sales, purchases, machinery, etc., at a glance. For example where there are several transactions with a debtor, the net amount due from a debtor can be known from the ledger account.
2) Control over business transactions:
From the ledger balances extracted, a thorough analysis of account balances can be made which help to have control over the business transactions.
3) Trial balance can be prepared:
With the balances of ledger accounts, trial balance can be prepared to check the arithmetical accuracy of entries made in the journal and ledger.
4) Helps to prepare financial statements:
From the ledger balances extracted, financial statements can be prepared for ascertaining net profit or loss and the financial position

Trial balance is prepared with the following objectives:
(i) Test of arithmetical accuracy:
Trial Balance is a means by which the arithmetical accuracy of the book-keeping work is Checked.
(ii) Basis for preparing final accounts:
Financial statements, namely, trading and profit and loss account and balance sheet are prepared on the basis of summary of ledger balances obtained from the trial balance.
(iii) Location of Errors:
1) When the Trial balance does not tally, it is an indication that certain errors have occurred.
2) The errors may have occurred at one or more of the stages of the accounting process, namely, journalising or recording in subsidiary books, totalling subsidiary books, posting in ledger accounts, balancing the ledger accounts, carrying ledger account balances to the trial balance, totalling the trial balance columns, etc.
(iv) Summarised information of Ledger Accounts:
1) The summary of ledger accounts is shown in the trial balance.
2) Ledger accounts have to be seen only when details are required in respect of an account

(i) "Business units last indefinitely". This statement is used in Going Concern Concept.
(ii) Going concern concept influences Accounting practices in relation to valuation of assets and liabilities, depreciation of the fixed assets, treatment of outstanding and prepaid expenses and Incomes.
(iii) The values involved in the going concern concept are
1. Growth: By following the going concern concept, business activities are to be carried out for future growth. 
2. Preparing for future: By following the going concern assumption, business firm always intends to prepare for the future.

(i) According to this concept, revenues during an accounting period are matched with expenses incurred during that period to earn the revenue during that period.
(ii) This concept is based on accrual concept and periodicity concept.
(iii) Periodicity concept fixes the time frame for measuring performance and determining financial status.
(iv) All expenses paid during the period are not considered, but only the expenses related to the accounting period are considered.

(i) 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 concerned about future earnings and risk bearing capacity of the organisation which will affect the return to the investors.
(ii) Government :
1. The scarce resources of the country are used by business enterprises.
2. Information about performance of business units in different industries helps the government in policy formulation for development of trade and industry, allocation of scarce resources, grant of subsidy, etc.
3. Government also administers prices of certain commodities.