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Prof. Ganatra Kashyap A. 1

Book-Keeping

Book-Keeping is the system of maintainingbooks of accounts relating to business dealings,

from which the owner can find out whether he

has made a profit or loss for a particular year.

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Basic Accounting Terminology1) Debit and Credit.

2) Double Entry.3) Narration.

4) Books ofPrime/Original Entry.

5) Books of Account.6) Account.

7) Journal.

8) Ledger.

9) Folio

10) Casting.

11) Posting.

12)Debtor.

13) Creditor.

14) Assets.

15)Liabilities.

16) Capital.

17)Drawings.

18) Closing Entries.

19) Adjusting Entries.

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3

AccountingAccounting is the art of recording, classifyingand summarizing in a significant manner and in

terms of money, transactions and events which

are, in part at least, of a financial character, andinterpreting the results thereof .

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Principles of Double Entry Book- KeepingThe fundamental principle of

double entry book-keeping

is that every transaction has two aspects.

They are :

i) Receiving the benefit.

ii) Giving the benefit.

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The Golden Rules of Debit & Credit.

ACCOUNT RULE

DEBIT CREDIT

1) Personal TheReceiver

The Giver

2) Real What

comes in

What goes

out3) Nominal Expenses

or losses

Incomes or

gains

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Trial BalanceA Trial Balance is a statement recordingbalances in each account of the ledger in two

different columns debit and credit.

The main purpose of preparing trial balance is tofind out the arithmetical accuracy of the books of

accounts.

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I

mportant Terms & Adjustments1) Opening & Closing Stock.

2)Depreciation Two Methods.

3) Bad Debts.

4) Provision for Bad Debts.

5) Outstanding Expenses.

6) Prepaid Expenses.

7) Income received in Advance.8) Accrued Income.

Final Accounts

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Final Accounts are the accounts prepared at the end of

an accounting period.

They generally comprise of :

i) Trading A/c Account pertaining to trading itemsin goods.

ii) P/L A/c Account pertaining to expense andincomes.

iii) Balance Sheet Statement of Assets & Liabilities.

Sums

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Corporate Final Accounts

Financial Statements drawn in Vertical Format.