This book gives a clear and crisp explanation on the principle and practices of the corporate accounting. It is written to address the syllabi requirements of all UG students of Commerce.
Cover
Title Page
Copyright Page
Table of Contents
Preface
Illustrations Layout
Chapter 1 Introduction
Accounting
Definition of Accountancy
Attributes in Accounting
Advantages of Accounting
Limitations of Accounting
Stakeholders Interested in Accounting Information
Book Keeping
Objectives of Book Keeping
Book Keeping vs Accounting
Branches of Accounting
Financial Accounting
Cost Accounting
Management Accounting
Methods of Accounting
Single Entry System
Double Entry System
Classification of Accounts
Rules for Double Entry
Bases of Accounting
Accounting Equation
Accounting Concepts and Conventions
Accounting Concepts
Accounting Conventions
Review Questions
Chapter 2 Journal and Ledger
Journal
Meaning of Journal
Advantages of Journal Entries
Points to be Observed while Passing Journal Entries
Ledger
Characteristics of Ledger
Proforma of a Ledger
Posting
Model Journal Entry for Posting from Journal to Ledger
Steps for Balancing of Ledger Accounts
Illustrations
Review Questions
Exercises
Chapter 3 Trial Balance
Introduction
Main Characteristics and Uses of a Trial Balance
Objectives of Preparing a Trial Balance
Methods of Preparation of Trial Balance
Total Method
Balance Method
Schedule of Debtors and Creditors
Advantages of a Trial Balance
Illustrations
Review Questions
Exercises
Chapter 4 Rectification of Errors
Introduction
Based on Nature
Errors of Omission
Errors of Commission
Errors of Principle
Compensating Errors
Based on the Impact on Trial Balance
Errors Not Disclosed by Trial Balance
Errors Disclosed by Trial Balance
Based on Accounts Criterion
Single Sided Errors
Double Sided Errors
Suspense Account
Basic Principles for Rectification of Errors
Illustrations
Review Questions
Exercises
Chapter 5 Subsidiary Book
Introduction
Advantages of Subsidiary Book
Basic Documents for Subsidiary Books
Kinds of Subsidiary Books
Purchases Book
Sales Book
Purchases Returns Book
Sales Returns Book
Bills Receivable Book
Bills Payable Book
Journal Proper
Cash Book
Illustrations
Review Questions
Exercises
Chapter 6 Cash Book
Introduction
Characteristics of a Cash Book
Advantages
Types of Cash Book
Single Column Cash Book or Simple Cash Book
Double Column Cash Book or Two Column Cash Book
Triple Column Cash Book or Three Column Cash Book
Analytical Petty Cash Book
Imprest System
Benefits of Petty Cash Book
Posting of Entries from Petty Cash Book
Illustrations
Review Questions
Exercises
Chapter 7 Final Accounts
Introduction
Objectives in the Preparation of Final Accounts
Stages in Preparation of Final Accounts
Manufacturing Account
Trading Account
Profit and Loss Account
Balance Sheet
Grouping and Marshalling of Assets and Liabilities
Final Accounts with Adjustment
Closing Stock
Expenses Outstanding
Prepaid Expenses
Accrued Incomes
Income Received in Advance
Depreciation on Fixed Assets
Bad Debts
Provision for Bad and Doubtful Debts
Provision for Discount on Debtors
Provision for Discount on Creditors
Interest on Capital
Interest on Drawings
Other Adjustments
Illustrations
Review Questions
Exercises
Chapter 8 Depreciation Accounting
Introduction
Characteristics of Depreciation
Factors / Causes of Depreciation
Wear and Tear
Effluxion of Time
Obsolescence
Disuse
Technical Growth
Depletion
Factors Affecting the Calculation of Depreciation
Need for Providing Depreciation
Methods of Depreciation
Straight Line Method or Fixed Installment Method or Original Cost Method
Diminishing Balance Method or Reducing Installment Method or Written Down Value Method
Annuity Method
Depreciation Fund or Sinking Fund Method
Insurance Policy Method
Sum of Years Digit Method
Revaluation Method
Depletion Method
Machine Hour Rate Method
Illustrations
Review Questions
Exercises
Chapter 9 Non-Trading Organisatons
Introduction
Final Accounts of Non-Profit Organisations
Preparation of Financial Statements
Receipts & Payment Account
Income & Expenditure Account
Treatment of Special Items of a Non-Profit Organisation
Entrance / Admission Fee
Donations
Life Membership Fee
Subscriptions
Calculation of Subscription to be Credited to Income & Expenditure Account
Special Receipts
Legacy
Sale of Assets
Sale of Newspapers, Magazines and Sports Materials
Honorarium
Other Funds
Treatment of Revenue Items in Income & Expenditure Account
Illustrations
Review Questions
Exercises
Chapter 10 Bank Reconciliation Statement
Introduction
Meaning
Definition
Need for Bank Reconciliation Statement
Reasons for Disagreement
Steps for Preparation of Bank Reconciliation Statement
Proforma of Bank Reconciliation Statement
Analysis of Bank Reconciliation Statement
Illustrations
Review Questions
Exercises
Chapter 11 Fire Insurance Claims
Introduction
Fire Insurance Claims
Types of Fire Insurance Claims
Loss of Stocks and Assets
Loss of Profit
Distinct Terms in Fire Insurance Claims
Illustrations
Review Questions
Exercises
Chapter 12 Single Entry System or Accounts from Incomplete Records
Meaning
Definition
Features
Advantages
Limitations
Differences between Double Entry System and Single Entry System
Process of Ascertainment of Profit
Distinction between Statement of Affairs and Balance Sheet
Steps Involved in Preparation of Final Accounts under Conversion Method from Incomplete Records
Illustrations
Review Questions
Exercises
Chapter 13 Branch Accounting
Introduction
Objectives of Branch Accounts
Categories of Branches
Inland or Domestic Branches
Incorporation of Branch Trial Balance in Head Office Books
Foreign Branches
Illustrations
Review Questions
Exercises
Chapter 14 Departmental Accounting
Introduction
Departmental Accounting
Objectives of the Departmental Accounting
Advantages of Departmental Accounts
Differences between Branch Accounting and Departmental Accounting
Methods and Techniques
Interdepartmental Transactions
Journal Entry
Disclosure in Balance Sheet
Illustrations
Review Questions
Exercises
Chapter 15 Hire Purchase System
Introduction
Hire Purchase
Special Features of this Hire Purchase Contract
Important Definitions of the Act
Differences between Sale and Hire Purchase
Instalment Method
Features of Instalment Payment System
Differences between Hire Purchase System and Instalment Purchase System
Accounting for Hire Purchase
Calculation of Interest & Cash Price
Termination of Hire Purchase Agreement before the Agreed Period of Instalments
Default and Repossession
Sale of Small Values of Goods and Its Accounting Treatment
Instalment System
Accounting of Instalment Purchase
Illustrations
Review Questions
Exercises
Chapter 16 Partnership
Introduction
Partnership Deed
Meaning
Contents
Rules Applicable in the Absence of Partnership Deed
Accounts of Partnership Firms
Adjustments to be Made to the Accounts
Partners Capital Accounts
Other Points Relating to Partnership
Capital Ratio
Adjustment of Capital Accounts after Closing Accounts of the Firm
Cancellation of Excess Interest
Guarantee
Illustrations
Review Questions
Exercises
Chapter 16A Reconstitution of Partnership by Admission of a Partner
Introduction
Admission of a New Partner
New Profit Sharing Ratio of the New Firm
Accounting Goodwill of the Existing Firm
Revaluation of Assets and Liabilities of the Firm
Capitalisation of Accumulated Profits and Losses
Adjustment of Partners’ Capitals of All Partners
Illustrations
Review Questions
Exercises
Chapter 16B Reconstitution of Partnership by Retirement of a Partner
Introduction
Sections Relating to Retirement
Sec. 32 (2)
Sec. 32 (3)
Sec. 32 (4)
Accounting Adjustments
Calculation of New Profit Sharing Ratio and Gaining Ratio of Continuing Partners
Adjustment Regarding Goodwill
Revaluation of Assets and Liabilities
Adjustment Regarding Undistributed Profits and Losses
Settlement of Retiring Partner’s Claim
Adjustment of Remaining Partners Capital Account after Retirement
Retirement Cum Admission
Joint Life Policy (JLP)
Illustrations
Review Questions
Exercises
Chapter 16C Reconstitution of Partnership by Death of a Partner
Introduction
Death of a Partner
Mode of Payment
Other Factors to be Considered in Case of Death of a Partner
Illustrations
Review Questions
Exercises
Chapter 16D Dissolution of Partnership Firm
Introduction
Meaning of Dissolution
Dissolution of Partnership
Dissolution of a Firm
Reasons of Dissolution of Partnership Firm
Settlement of Accounts
Accounts for Dissolution
Proforma of Realisation Account
Methods of Problems
Preparation of Memorandum of Balance Sheet
Voluntary Dissolution and All Partners are Solvent
Insolvency of a Partner
Piecemeal Distribution of Cash
Illustrations
Review Questions
Exercises
Chapter 17 Accounting Standards
Introduction
Components of Financial Statements
Objectives of Financial Statements
Indian Accounting Standards
Generally Accepted Accounting Principles
Benefits of Accounting Standards
Standards Setting Procedure
Indian Accounting Standards
Need to Converge towards Global Standards
International Financial Reporting Standards (IFRS) as Global Standards
IFRS Compliance
Convergence to IFRS in India
What are Indian Accounting Standards (IND AS)?
How to Implement Indian Accounting Standards (IND AS)?
For Companies Other than Banks, NBFCs and Insurance Companies
Notable Points to Consider
Differences between IFRS and IND AS
Review Questions
Index
Dr. K. Murugadoss Head PG & Research Department of Commerce Periyar Government Arts College Cuddalore.
Dr. M. Jaya Associate Professor and Head Department of Commerce Asan Memorial College of Arts and Science Chennai.
Dr. V. Charulatha Associate Professor and Head Department of Commerce (Corporate Secretaryship) Asan Memorial College of Arts and Science Chennai.
Dr. D. Baskar Associate Professor and Head Department of Commerce (Computer Applications) Asan Memorial College of Arts and Science Chennai.
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Description
This book gives a clear and crisp explanation on the principle and practices of the corporate accounting. It is written to address the syllabi requirements of all UG students of Commerce.
Table of contents
Cover
Title Page
Copyright Page
Table of Contents
Preface
Illustrations Layout
Chapter 1 Introduction
Accounting
Definition of Accountancy
Attributes in Accounting
Advantages of Accounting
Limitations of Accounting
Stakeholders Interested in Accounting Information
Book Keeping
Objectives of Book Keeping
Book Keeping vs Accounting
Branches of Accounting
Financial Accounting
Cost Accounting
Management Accounting
Methods of Accounting
Single Entry System
Double Entry System
Classification of Accounts
Rules for Double Entry
Bases of Accounting
Accounting Equation
Accounting Concepts and Conventions
Accounting Concepts
Accounting Conventions
Review Questions
Chapter 2 Journal and Ledger
Journal
Meaning of Journal
Advantages of Journal Entries
Points to be Observed while Passing Journal Entries
Ledger
Characteristics of Ledger
Proforma of a Ledger
Posting
Model Journal Entry for Posting from Journal to Ledger
Steps for Balancing of Ledger Accounts
Illustrations
Review Questions
Exercises
Chapter 3 Trial Balance
Introduction
Main Characteristics and Uses of a Trial Balance
Objectives of Preparing a Trial Balance
Methods of Preparation of Trial Balance
Total Method
Balance Method
Schedule of Debtors and Creditors
Advantages of a Trial Balance
Illustrations
Review Questions
Exercises
Chapter 4 Rectification of Errors
Introduction
Based on Nature
Errors of Omission
Errors of Commission
Errors of Principle
Compensating Errors
Based on the Impact on Trial Balance
Errors Not Disclosed by Trial Balance
Errors Disclosed by Trial Balance
Based on Accounts Criterion
Single Sided Errors
Double Sided Errors
Suspense Account
Basic Principles for Rectification of Errors
Illustrations
Review Questions
Exercises
Chapter 5 Subsidiary Book
Introduction
Advantages of Subsidiary Book
Basic Documents for Subsidiary Books
Kinds of Subsidiary Books
Purchases Book
Sales Book
Purchases Returns Book
Sales Returns Book
Bills Receivable Book
Bills Payable Book
Journal Proper
Cash Book
Illustrations
Review Questions
Exercises
Chapter 6 Cash Book
Introduction
Characteristics of a Cash Book
Advantages
Types of Cash Book
Single Column Cash Book or Simple Cash Book
Double Column Cash Book or Two Column Cash Book
Triple Column Cash Book or Three Column Cash Book
Analytical Petty Cash Book
Imprest System
Benefits of Petty Cash Book
Posting of Entries from Petty Cash Book
Illustrations
Review Questions
Exercises
Chapter 7 Final Accounts
Introduction
Objectives in the Preparation of Final Accounts
Stages in Preparation of Final Accounts
Manufacturing Account
Trading Account
Profit and Loss Account
Balance Sheet
Grouping and Marshalling of Assets and Liabilities
Final Accounts with Adjustment
Closing Stock
Expenses Outstanding
Prepaid Expenses
Accrued Incomes
Income Received in Advance
Depreciation on Fixed Assets
Bad Debts
Provision for Bad and Doubtful Debts
Provision for Discount on Debtors
Provision for Discount on Creditors
Interest on Capital
Interest on Drawings
Other Adjustments
Illustrations
Review Questions
Exercises
Chapter 8 Depreciation Accounting
Introduction
Characteristics of Depreciation
Factors / Causes of Depreciation
Wear and Tear
Effluxion of Time
Obsolescence
Disuse
Technical Growth
Depletion
Factors Affecting the Calculation of Depreciation
Need for Providing Depreciation
Methods of Depreciation
Straight Line Method or Fixed Installment Method or Original Cost Method
Diminishing Balance Method or Reducing Installment Method or Written Down Value Method
Annuity Method
Depreciation Fund or Sinking Fund Method
Insurance Policy Method
Sum of Years Digit Method
Revaluation Method
Depletion Method
Machine Hour Rate Method
Illustrations
Review Questions
Exercises
Chapter 9 Non-Trading Organisatons
Introduction
Final Accounts of Non-Profit Organisations
Preparation of Financial Statements
Receipts & Payment Account
Income & Expenditure Account
Treatment of Special Items of a Non-Profit Organisation
Entrance / Admission Fee
Donations
Life Membership Fee
Subscriptions
Calculation of Subscription to be Credited to Income & Expenditure Account
Special Receipts
Legacy
Sale of Assets
Sale of Newspapers, Magazines and Sports Materials
Honorarium
Other Funds
Treatment of Revenue Items in Income & Expenditure Account
Illustrations
Review Questions
Exercises
Chapter 10 Bank Reconciliation Statement
Introduction
Meaning
Definition
Need for Bank Reconciliation Statement
Reasons for Disagreement
Steps for Preparation of Bank Reconciliation Statement
Proforma of Bank Reconciliation Statement
Analysis of Bank Reconciliation Statement
Illustrations
Review Questions
Exercises
Chapter 11 Fire Insurance Claims
Introduction
Fire Insurance Claims
Types of Fire Insurance Claims
Loss of Stocks and Assets
Loss of Profit
Distinct Terms in Fire Insurance Claims
Illustrations
Review Questions
Exercises
Chapter 12 Single Entry System or Accounts from Incomplete Records
Meaning
Definition
Features
Advantages
Limitations
Differences between Double Entry System and Single Entry System
Process of Ascertainment of Profit
Distinction between Statement of Affairs and Balance Sheet
Steps Involved in Preparation of Final Accounts under Conversion Method from Incomplete Records
Illustrations
Review Questions
Exercises
Chapter 13 Branch Accounting
Introduction
Objectives of Branch Accounts
Categories of Branches
Inland or Domestic Branches
Incorporation of Branch Trial Balance in Head Office Books
Foreign Branches
Illustrations
Review Questions
Exercises
Chapter 14 Departmental Accounting
Introduction
Departmental Accounting
Objectives of the Departmental Accounting
Advantages of Departmental Accounts
Differences between Branch Accounting and Departmental Accounting
Methods and Techniques
Interdepartmental Transactions
Journal Entry
Disclosure in Balance Sheet
Illustrations
Review Questions
Exercises
Chapter 15 Hire Purchase System
Introduction
Hire Purchase
Special Features of this Hire Purchase Contract
Important Definitions of the Act
Differences between Sale and Hire Purchase
Instalment Method
Features of Instalment Payment System
Differences between Hire Purchase System and Instalment Purchase System
Accounting for Hire Purchase
Calculation of Interest & Cash Price
Termination of Hire Purchase Agreement before the Agreed Period of Instalments
Default and Repossession
Sale of Small Values of Goods and Its Accounting Treatment
Instalment System
Accounting of Instalment Purchase
Illustrations
Review Questions
Exercises
Chapter 16 Partnership
Introduction
Partnership Deed
Meaning
Contents
Rules Applicable in the Absence of Partnership Deed
Accounts of Partnership Firms
Adjustments to be Made to the Accounts
Partners Capital Accounts
Other Points Relating to Partnership
Capital Ratio
Adjustment of Capital Accounts after Closing Accounts of the Firm
Cancellation of Excess Interest
Guarantee
Illustrations
Review Questions
Exercises
Chapter 16A Reconstitution of Partnership by Admission of a Partner
Introduction
Admission of a New Partner
New Profit Sharing Ratio of the New Firm
Accounting Goodwill of the Existing Firm
Revaluation of Assets and Liabilities of the Firm
Capitalisation of Accumulated Profits and Losses
Adjustment of Partners’ Capitals of All Partners
Illustrations
Review Questions
Exercises
Chapter 16B Reconstitution of Partnership by Retirement of a Partner
Introduction
Sections Relating to Retirement
Sec. 32 (2)
Sec. 32 (3)
Sec. 32 (4)
Accounting Adjustments
Calculation of New Profit Sharing Ratio and Gaining Ratio of Continuing Partners
Adjustment Regarding Goodwill
Revaluation of Assets and Liabilities
Adjustment Regarding Undistributed Profits and Losses
Settlement of Retiring Partner’s Claim
Adjustment of Remaining Partners Capital Account after Retirement
Retirement Cum Admission
Joint Life Policy (JLP)
Illustrations
Review Questions
Exercises
Chapter 16C Reconstitution of Partnership by Death of a Partner
Introduction
Death of a Partner
Mode of Payment
Other Factors to be Considered in Case of Death of a Partner
Illustrations
Review Questions
Exercises
Chapter 16D Dissolution of Partnership Firm
Introduction
Meaning of Dissolution
Dissolution of Partnership
Dissolution of a Firm
Reasons of Dissolution of Partnership Firm
Settlement of Accounts
Accounts for Dissolution
Proforma of Realisation Account
Methods of Problems
Preparation of Memorandum of Balance Sheet
Voluntary Dissolution and All Partners are Solvent
Insolvency of a Partner
Piecemeal Distribution of Cash
Illustrations
Review Questions
Exercises
Chapter 17 Accounting Standards
Introduction
Components of Financial Statements
Objectives of Financial Statements
Indian Accounting Standards
Generally Accepted Accounting Principles
Benefits of Accounting Standards
Standards Setting Procedure
Indian Accounting Standards
Need to Converge towards Global Standards
International Financial Reporting Standards (IFRS) as Global Standards
IFRS Compliance
Convergence to IFRS in India
What are Indian Accounting Standards (IND AS)?
How to Implement Indian Accounting Standards (IND AS)?
For Companies Other than Banks, NBFCs and Insurance Companies
Notable Points to Consider
Differences between IFRS and IND AS
Review Questions
Index
Biographical note
Dr. K. Murugadoss Head PG & Research Department of Commerce Periyar Government Arts College Cuddalore.
Dr. M. Jaya Associate Professor and Head Department of Commerce Asan Memorial College of Arts and Science Chennai.
Dr. V. Charulatha Associate Professor and Head Department of Commerce (Corporate Secretaryship) Asan Memorial College of Arts and Science Chennai.
Dr. D. Baskar Associate Professor and Head Department of Commerce (Computer Applications) Asan Memorial College of Arts and Science Chennai.