Accounting Principles and Practices

Real accounts represent assets and always have a debit balance because assets cannot have a negative balance. Real accounts are debited when assets increase and credited when they decrease, but they normally show debit balances.

The ledger is called the Book of Final Entry (or Principal Book) because it contains the classified and summarized accounts from the journal. All final balances for preparation of trial balance and financial statements are drawn from the ledger.

It is prepared to ascertain deficit of expenses over income or surplus of income over expenses.

Since the donation received is incoming of cash and the cash that comes in is, shown in debit side of receipts and payments A/c.

The incoming and outgoing cash (receipts and payments) whether of the current year or previous year is shown in receipts and payments A/c.

When closing stock appears inside the trial balance, it indicates that it has already been adjusted against purchases. Therefore, it is only shown as an asset in the Balance Sheet and does not appear in the Trading Account.

In an Income and Expenditure Account, the credit side represents income and the debit side represents expenditure. A credit balance means the total income is greater than the total expenditure, resulting in a surplus.

The Income and Expenditure Account is prepared on an accrual basis for a specific period. It only includes income and expenses that relate to the current accounting year, excluding any amounts for previous or future years.

A periodical audit, also known as a final or annual audit, is conducted after the close of the financial year when the final accounts have been prepared. This differs from a continuous audit which happens throughout the year.

A realization account is prepared at the time of dissolution of a firm to determine the profit or loss on the sale of assets and settlement of liabilities. Since it is used to calculate profit or loss, it is classified as a nominal account.

Spreadsheet software, such as Microsoft Excel, is designed to handle numerical data, calculations, and record-keeping in a grid format. This makes it the most efficient tool for tracking billing and financial accounts.

Stock Journal Voucher is used for adjustment of stock like shortage, wastage, excess stock or decrease in stock or movement of stock from one godown to another, etc.

POS (Point of Sales) is an advanced capability to simplify retail operations and it has efficiently automated the check-out process for customers and also allows for creating invoices and collecting payment from customers in seconds at the Point of Sales.

F12 > Voucher Entry Configuration > Accounts Group