Cover
Half-title
Title Page
Copyright
Dedication
Contents
Preface
Chapter 1: Introduction to Accounting
1.1 Accounting
1.2 Need for Accounting
1.3 Objectives of Accounting
1.4 Advantages of Accounting
1.5 Limitations of Accounting
1.6 Users of Accounting
1.6.1 Internal Users
1.6.2 External Users
1.7 Functions of Accounting
1.8 Branches of Accounting
1.8.1 Financial Accounting
1.8.2 Cost Accounting
1.8.3 Management Accounting
1.8.4 Social Responsibility Accounting
1.8.5 Human Resource Accounting
1.9 Bookkeeping Versus Accounting
1.10 Accounting Cycle
1.11 Methods of Accounting
1.11.1 Single Entry System
1.11.2 Double Entry System
1.12 Accounting Terminologies
Theory Questions
Chapter 2: Accounting Concepts and Conventions
2.1 Accounting Concepts
2.2 Need for Accounting Concepts
2.3 Accepted List of Accounting Concepts
2.3.1 Business Entity Concept
2.3.2 Going Concern Concept
2.3.3 Money Measurement Concept
2.3.4 Dual Aspect Concept
2.3.5 Accounting Period Concept
2.3.6 Cost Concept
2.3.7 Revenue Realisation Concept
2.3.8 Matching Concept
2.3.9 Accrual Concept
2.3.10 Objective Evidence Concept
2.4 Accounting Conventions
2.4.1 Convention of Conservatism
2.4.2 Convention of Consistency
2.4.3 Convention of Full Disclosure
2.4.4 Convention of Materiality
2.5 Accounting Equation
2.5.1 Fundamental Accounting Equation
Theory Questions
Chapter 3: Journal
3.1 Journal
3.1.1 Format of Journal
3.1.2 Importance of Journal
3.1.3 Objectives of Preparing a Journal
3.2 Journalising
3.2.1 Ledger Folio
3.2.2 Compound Journal Entry
3.2.3 Opening Entry
3.2.4 Golden Rules of Accounting
3.2.5 Journalising the Transaction
Theory Questions
Exercise Problems
Chapter 4: Ledger and Trial Balance
4.1 Ledger
4.2 Proforma of Ledger Account
4.3 Sub-division of Ledger
4.3.1 Debtors’ Ledger
4.3.2 Creditors’ Ledger
4.3.3 General Ledger
4.4 Posting of Accounts
4.4.1 Balancing of Ledger Accounts
4.5 Trial Balance
4.5.1 Definition
4.5.2 Format
Theory Questions
Exercise Problems
Chapter 5: Subsidiary Books
5.1 Cash Book
5.2 Kinds of Cash Book
5.3 Single-column Cash Book
5.3.1 Balancing of Cash Book
5.4 Two-column Cash Book
5.4.1 Cash Book with Discount and Cash Columns
5.4.2 Cash Book with Cash and Bank Columns
5.5 Contra Entry
5.6 Returns Books
5.6.1 Kinds of Returns Books
Theory Questions
Exercise Problems
Chapter 6: Rectification of Errors
6.1 Errors
6.2 Types of Errors
6.2.1 Errors of Principle
6.2.2 Clerical Errors
6.3 Disclosure and Non-disclosure of Errors by Trial Balance
6.4 Suspense Account
6.4.1 Suspense Account
Theory Questions
Exercise Problems
Chapter 7: Final Accounts
7.1 Final Accounts
7.2 Trading Account
7.3 Profit and Loss Account
7.4 Balance Sheet
7.5 Adjustment Entries
7.5.1 Closing Stock
7.5.2 Outstanding Expenses
7.5.3 Prepaid Expenses
7.5.4 Accrued Income
7.5.5 Income Received in Advance
7.5.6 Depreciation of Assets
7.5.7 Interest on Capital
7.5.8 Interest on Drawings
7.5.9 Bad Debts
7.5.10 Provision for Bad and Doubtful Debts
7.5.11 Provision for Discount on Debtors
7.5.12 Provision for Discount on Creditors
7.5.13 Loss of Stock by Accident, Fire, etc.
Theory Questions
Exercise Problems
Chapter 8: Bank Reconciliation Statement
8.1 Cash Book
8.2 Pass Book
8.3 Bank Reconciliation Statement
8.3.1 Purpose of Bank Reconciliation Statement
8.3.2 Favourable Balance
8.3.3 Unfavourable Balance/Overdraft Balance
8.4 Reasons for Differences in Cash Book and Passbook
Theory Questions
Exercise Problems
Chapter 9: Depreciation
9.1 Depreciation
9.2 Need for Providing Depreciation
9.3 Causes of Depreciation
9.3.1 Internal Causes
9.3.2 External Causes
9.4 Terms Used for Depreciation
9.5 Factors Determining the Amount of Depreciation
9.6 Methods of Calculating Depreciation
9.6.1 Straight Line Method or Fixed Instalment Method or Original Cost Method
9.6.2 Written Down Value Method or Diminishing Balance Method or Reducing Balance Method
9.6.3 Annuity Method
9.6.4 Insurance Policy Method
9.6.5 Revaluation Method
9.6.6 Depletion Method
9.6.7 Machine Hour Rate Method
9.7 Journal Entries for Recording Depreciation
9.8 Calculation of Profit or Loss on Sale of Asset
9.9 Methods of Recording Depreciation
9.9.1 When Provision for Depreciation Account is Not Maintained
9.9.2 When a Provision for Depreciation Account is Maintained
9.10 Exchange of Assets with New Assets
9.11 Change in Method of Depreciation
Theory Questions
Exercise Problems
Chapter 10: Fire Insurance Claims
10.1 Fire Insurance
10.2 Need for Fire Insurance
10.3 Important Terms
10.3.1 Gross Profit Ratio
10.3.2 Stock on Date of Fire
10.3.3 Memorandum Trading Account
10.3.4 Salvaged Stock
10.3.5 Amount of Claim
10.3.6 Average Clause
10.3.7 Undervaluation of Stock
10.3.8 Overvaluation of Stock
10.3.9 Extraordinary Items
10.3.10 Loss of Profit
10.4 Steps in Calculation of Claims
Theory Questions
Exercise Problems
Chapter 11: Average Due Date
11.1 Average Due Date
11.2 Areas of Application of Average Due Date
11.3 Steps in Calculation of Average Due Date
11.4 Points to be Noted
Formulae
Theory Questions
Exercise Problems
Chapter 12: Current Account
12.1 Account Current
12.2 Scope of Account Current
12.3 Points to be Noted for Calculation of Days
12.4 Methods of Calculating Number of Days
12.4.1 Forward Method
12.4.2 Backward Method/Epoque Method
12.4.3 Daily Balance/Step/Periodic Balance Method
12.5 Methods of Calculation of Interest
12.5.1 Interest Table Method
12.5.2 Product Method/Forward Method
12.5.3 Interest Number Method
Theory Questions
Exercise Problems
Chapter 13: Sale of Goods on Approval or Return Basis
13.1 Methods of Recording Sale on Approval or Return Basis
13.1.1 When there are Only a Few Transactions
13.1.2 When there are Considerable Number of Transactions
13.1.3 When there are Many Transactions
Theory Questions
Exercise Problems
Chapter 14: Single Entry System
14.1 Single Entry System
14.2 Features of Single Entry
14.2.1 Suitable Only for Sole Traders and Partnership Firms
14.2.2 Records Personal Accounts and Cash Transactions
14.2.3 Lack of Uniformity
14.2.4 Dependence on Original Vouchers
14.2.5 Profit only an Estimate
14.2.6 True Financial Position cannot be Ascertained
14.3 Limitations of Single Entry
14.3.1 Incomplete and Unscientific Method
14.3.2 Trial Balance cannot be Prepared
14.3.3 Lack of Arithmetical Accuracy
14.3.4 Performance of the Business cannot be Ascertained
14.3.5 True Financial Position cannot be Ascertained
14.3.6 Frauds and Errors
14.3.7 Comparison cannot be Made
14.3.8 Unacceptable to Tax Authorities
14.4 Distinction Between Double Entry System and Single Entry System
14.5 Distinction Between Statement of Affairs and Balance Sheet
14.6 Methods of Ascertaining Profit or Loss
14.6.1 Statement of Affairs Method
14.6.2 Conversion Method
Theory Questions
Exercise Problems
Chapter 15: Accounts of Non-trading Organisations
15.1 Non-trading Organisations
15.2 Important Terms
15.2.1 Subscription
15.2.2 Entrance Fees or Admission Fees
15.2.3 Life Membership Fees
15.2.4 Endowment Fund
15.2.5 Donation
15.2.6 Legacy
15.2.7 Sale of Old Newspapers
15.2.8 Sale of Old Sports Material
15.2.9 Purchase of Fixed Assets
15.2.10 Payment of Honorarium
15.2.11 Purchase of Consumable Items
15.2.12 Capital Fund
15.2.13 Special Fund
15.3 Receipts And Payments Account
15.3.1 Features of Receipts and Payments Account
15.3.2 Proforma of Receipts and Payments Account
15.4 Income And Expenditure Account
15.4.1 Steps to Prepare Income and Expenditure Account
15.4.2 Specimen Form of Income and Expenditure Account
15.5 Distinction Between Receipts and Payments Account and Income and Expenditure Account
15.6 Distinction between Receipts and Payments Account and Cashbook
15.7 Balance Sheet
Theory Questions
Exercise Problems
Chapter 16: Royalty
16.1 Royalty
16.2 Minimum Rent
16.3 Strike and Lock Out
16.4 Shortworking
16.4.1 Recoupment of Shortworkings
16.5 Journal Entries for the Books of Lessee or Tenant
16.6 Journal Entries for the Books of Landlord or Lessor
Theory Questions
Exercise Problems
Chapter 17: Branch Account
17.1 Branch Accounting
17.2 Objectives of Branch Accounting
17.3 Types of Branches
17.3.1 Dependent Branches
17.3.2 Independent Branches
Theory Questions
Exercise Problems
Chapter 18: Departmental Accounting
18.1 Departmental Accounting
18.2 Need of Departmental Accounting
18.3 Advantages of Departmental Accounting
18.4 Distinction Between Department And Branch
18.5 Methods of Departmental Accounting
18.5.1 Individual Set of Books are Maintained
18.5.2 All Departmental Accounts are Maintained Columnar-wise Collectively
18.6 Direct and Indirect Expenses
18.7 Basis of Allocation of Departmental Expenses
18.8 Inter-departmental Transfers
18.8.1 Calculation of Stock Reserve on Inter-departmental Transfer
Theory Questions
Exercise Problems
Chapter 19: Hire Purchase and Instalment Purchase Systems
19.1 Introduction
19.2 Instalment System
19.3 Accounting Procedure for Hire Purchase System
19.3.1 Calculation of Interest
19.3.2 Default and Repossession
19.4 Illustrations
Theory Questions
Exercise Problems
Chapter 20: Admission of a Partner
20.1 Partnership Deed
20.2 Interest on Capital
20.3 Admission of a Partner
20.4 New Profit-sharing Ratio
20.5 Calculation of Sacrificing Ratio
20.6 Adjustment for Revaluation of Assets and Liabilities
20.7 Adjustment for Accumulated Profits and Reserves
Theory Questions
Exercise Problems
Chapter 21: Retirement, Retirement Cum Admission and Death of Partner
21.1 Adjustments Required
21.2 New Profit-sharing Ratio
21.1.1 When the Deed is Silent on the New Ratio after Retirement
21.1.2 Continuing Partners Purchase the Retiring Partner’s Share in Specified Ratio
21.3 Gaining Ratio
21.4 Treatment of Goodwill
21.5 Retirement Cum Admission
21.6 Death of a Partner
21.7 Joint Life Policy
Theory Questions
Exercise Problems
Chapter 22: Dissolution of Partnership Firm
22.1 Dissolution
22.2 Modes of Dissolution
22.3 Settlement of Accounts on Dissolution
22.4 Accounting Entries Regarding Dissolution
22.5 Garner Versus Murray Rule
22.5.1 Fixed Capital Method
22.5.2 Fluctuating Capital Method
22.5.3 Application of Garner versus Murray Rule in India
22.6 Insolvency of all Partners
22.6.1 Procedure to be Followed when all the Partners are Insolvent
Theory Questions
Exercise Problems
Chapter 23: Dissolution of Partnership: Piecemeal Distribution
23.1 Piecemeal Distribution
23.1.1 Proportionate Capital Method or Surplus Capital or Highest Relative Capital Method
23.1.2 Maximum Loss Method
Theory Questions
Exercise Problems
Chapter 24: Bill of Exchange
24.1 Introduction
24.2 Promissory Note
24.2.1 Features of a Promissory Note
24.2.2 Parties to a Promissory Note
24.3 Bill of Exchange
24.3.1 Parties to a Bill of Exchange
24.4 Distinction between Bills of Exchange and Promissory Note
24.5 Specimen of Bills of Exchange
24.6 Advantages of Bill of Exchange
24.7 Important Terms
24.7 Accounting Treatment of Bill Transactions
24.7.1 Bills Receivable
24.7.2 Bills Payable
Theory Questions
Exercise Problems
Chapter 25: Consignment Accounting
25.1 Introduction
25.2 Mechanism of Consignment
25.3 Features of Consignment
25.4 Difference between Consignment and Sale
25.5 Types of Commission
25.5.1 Ordinary Commission
25.5.2 Del-credere Commission
25.5.3 Overriding Commission
25.6 Valuation of Closing Stock
25.7 Non-recurring Expenses
25.8 Recurring Expenses
25.9 Goods in Transit
Theory Questions
Exercise Problems
Chapter 26: Joint Venture
26.1 Introduction
26.2 Meaning of Joint Venture
26.3 Features of Joint Venture Account
26.4 Difference between Joint Venture and Partnership
26.5 Difference between Joint Venture and Consigment
26.6 Methods of Maintaining Joint Venture Account
26.6.1 When Separate Set of Books of Accounts is Maintained
26.6.2 When Separate Set of Books are not Maintained
26.6.3 When Each Co-venture Keep Record of all Transactions
26.6.4 When Each Co-venture Keep Record of Own Transactions Only
26.7 Memorandum Joint Venture Account
Theory Questions
Exercise Problems
Chapter 27: Self Balancing Ledgers
27.1 Introduction
27.1.1 Advantages of Self-balancing System
27.1.2 Limitation of Self-balancing System
27.1.3 Cause of Imbalances of Discrepancies in Self-balancing Ledgers
27.1.4 Process Involved in Balancing Subsidiary Ledgers with General Ledger
27.2 Debtors Ledger
27.3 Creditors Ledger
27.4 General Ledger
27.4.1 General Ledger Adjustment Account
27.4.2 Debtors Ledger Adjustment Account
27.4.3 Creditors Ledger Adjustment Account
27.4.4 Transfer from One Trade Ledger to Another
27.5 Sectional Balancing System
27.6 Proforma of Total Debtors Account
Theory Questions
Exercise Problems
Chapter 28: Accounting Standards for Financial Reporting
28.1 Financial Statement – Meaning
28.2 Types of Financial Statements
28.2.1 Income Statement
28.2.2 Balance Sheet
28.2.3 Cash Flow Statement
28.2.4 Statement of Changes in Equity
28.3 Accounting Standards – Meaning
28.4 Development of Accounting Standards
28.5 Number of Accounting Standards
28.6 Advantages of Accounting Standards
28.7 Limitations of Accounting Standards
28.8 International Financial Reporting Standards (IFRS)
28.8.1 Role of IFRS
28.8.2 Components of IFRS
28.9 Convergence Implementation Plan in India)
28.10 Ind AS
28.10.1 Adoption
28.10.2 Covergence
28.11 Distinction Between IND AS and IFRS
Theory Questions
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