What Is Journalizsdfving
What Is Journalizsdfving
What Is Journalizsdfving
Journalizing is the process of recoding business transactions in the Journal in chronological order, as and
when the transactions take place. Journal is also known as Book of Original Entry or the Book of Prime
Entry.
Journal has following five columns:
-Date
-Particulars
-Ledger Folio
-Amount Debited
-Amount Credited
-Entries for which there is no special journal : When the transactions cannot be recorded in the above
sub journals then the same are entered in the journal proper.
Examples of such transactions are: Distribution of goods as free sample, Goods destroyed by fire, etc
What are control ledgers? What are the purposes of maintaining it?
In a business, sometimes it is not feasible to carry accounts of all the suppliers and customers in the main
ledger. In such cases apart from General or main ledger, the control ledgers are maintained. Control
ledgers records the individual accounts. In the end of the period, balance shown in the main ledger has to
tally with the balance in the individual ledger accounts maintained in the control ledger. Purposes of
maintaining control ledgers are:
- Sundry Debtors
- Sundry Creditors
- Advances to Staff
What are the reasons which cause pass book of the bank and your bank book not tally?
* Cheques deposited into the bank but not yet collected
* Cheques issued but not yet presented for payment
* Bank charges
* Amount collected by bank on standing instructions of the concern.
* Amount paid by the bank on standing instructions of the concern.
* Interest debited by the bank
* Interest credited by the bank
* Direct payment by customers into the bank account
* Dishonour of cheques
* Clerical errors
What steps would you take to locate the errors in case Trial Balance disagrees?
In case Trial Balance disagrees, following steps should be taken to locate the errors:
-Totalling of all the subsidiary books and trial balance should be checked carefully.
-Opening balances of all the accounts are properly brought down in the current years books of account.
-Ledger accounts have been properly balanced and the balances of ledger accounts have been correctly
shown in the trial balance.
-To locate some errors the difference in the trial balance in halved.
-Another way is dividing the difference in the trial balance by 9.
-If the difference gets divisible without leaving any reminder that indicates the transposition of the
amounts.
-To locate certain other errors, current year trial balance can be compared with the trial balance of the
previous year.
Capital structure
What is capital structure? What are the principles of capital structure management?
Explain following principles of cost structure management: a.) Cost Principle b.) Risk Principle c.) Control
Principle d.) Flexibility Principle e.) Timing Principle
What are the internal factors affecting capital structure?
Marginal costing
What is Marginal Costing? What are its features? What are the basic assumptions made by Marginal
Costing?
How is the concept of marginal costing practically applied?
What are the limitations of Marginal Costing?
What is Cost Volume-Profit relationship?
Basics financial accounting
Explain the following: a) Business Entity Concept b) Dual Aspect Concept c) Going Concern Concept
d)Accounting Period Concept e)Cost Concept f)Money Measurement Concept g)Marketing
Concept.................
2) Historical Nature:
Financial accounting considers only those transactions which are of historical nature i.e the transaction
which have already taken place. No futuristic transactions find any place in financial accounting,
howsoever important they may be from business point of view.
3) Legal Requirement:
Financial accounting is a legal requirement. It is necessary to maintain the financial accounting and
prepare financial statements there from. It is also obligatory to get these financial statements audited.
4) External Use:
Financial accounting is for those people who are not part of decision making process regarding the
organization like investors, customers, suppliers, financial institutions etc. Thus, it is for external use.
5) Disclosure of Financial Status:
It discloses the financial status and financial performance of the business as a whole.
6) Interim Reports:
Financial statements which are based on financial accounting are interim reports and cannot be the final
ones.
7) Financial Accounting Process:
The process of financial accounting gets affected due to the different accounting policies followed by the
accountants. These accounting policies differ mainly in two areas: Valuation of inventory and Calculation
of depreciation.
3) It is meant for those people who are part of the decision making process of the organization. Thus, it is
only for internal use.
4) It is not a legal requirement. It is not compulsory to maintain cost accounting records.
5) In Cost Accounting, data is immediately available which facilitates in decision making process.
6) Cost Accounting considers each and every transaction, whether related to past or future which will
have an impact on the business.
4) Financial Accounting considers only transactions of historical financial nature whereas Cost Accounting
considers not only historical data but also future events.
5) Financial Accounting reports are prepared in the standard formats in accordance with GAAP whereas
Cost accounting information is reported in whatever form management wants
What are Nominal Accounts? List accounts consisting the Nominal Account.
Nominal Accounts are the accounts of Incomes, Expenses, Losses and Gains. Nominal Accounts consist
of the following types of accounts:
-Insurance Account
-Wages Account
-Interest Paid or Received Account
-Commission Paid or Received Account
-Telephone Expenses Account
-Salary Account
What is the principal of Double Entry system of accounting? What are the
advantages of Double Entry system of accounting?
The principal of Double Entry system of Accounting is Every debit has a corresponding credit hence the
total of all debits has to be equal to the total of all credits. In simple words, every business transaction
affects two accounts. If one account is debited then the other account will be credited with the similar
amount. For example: if the business purchases a machinery worth Rs. 500000, then machinery account
gets debited with amount Rs. 500000 as the business is receiving an asset for its operation, on the other
side cash account automatically gets credited with the same amount of Rs. 500000 as cash is going out
of the business.
Advantages of Double Entry system of Accounting:
-It considers both the aspects of business transaction
-Arithmetic accuracy of the accounting records can be checked and verified by preparing trial balance
-Correct results of the operations can be ascertained by preparing Final Accounts
-Correct valuation of assets and liabilities at any point of time by preparing Balance sheet
What are the rules of double entry book keeping for various types of accounts?
Following are the basic rules of double entry book keeping for various types of accounts:
-Personal Account : Debit the Receiver, Credit the Giver
-Real Account : Debit what comes in, Credit what goes out
-Nominal Account : Debit all the Expenses, Credit all the Incomes
-Entries for rare transactions: Journal proper is used for rare transactions.
-Entries for which there is no special journal: When the transactions cannot be recorded in the above
sub journals then the same are entered in the journal proper.
Examples of such transactions are: Distribution of goods as free sample, Goods destroyed by fire, etc