Sunday, October 20, 2019
Basic Accounting Assignment Essay Example for Free
Basic Accounting Assignment Essay Generally Accepted à Principles, Balance sheet, Accounts receivable, Income statement, Debt, Liability, Double-entry bookkeeping system, Accounts payable 1- Explain the collecting, recording, classifying, summarizing, analyzing and reporting process of accounting. ââ¬â Collecting:- Data obtained from various sources with the help of appropriate measures is called collection of data. ââ¬â Recording:- Arranging the data into its chronological form is called recording of data. ââ¬â Classifying:- Division of data according to nature of events is called classification of data. ââ¬â Ledger is used for classifying transactions ââ¬â Posting is the process of transferring transactions from journal to ledger. Summarizing:- This involves presenting the classified data in a manner which is understandable and useful to the management and other interested parties. Follow statements are prepared:- ââ¬â Income statement ââ¬â Balance Sheet ââ¬â Cash flow statement ââ¬â Analyzing:- The comparison of data in a business is called analyzing of data. For example, analyzing of present data with past data, or actual data with projected data. ââ¬â Reporting:- Forwarding the results to financial users like chairman, directors, managers etc. is called reporting of data. ââ¬â Discuss in detail the nature of accounts i. e. assets, expenses, liabilities, revenues and capital by giving examples. ââ¬â Assets:- The resources of a business are called assets. They are of two types:- ââ¬â Fixed Assets: Land, Building, Equipment, Vehicle etc. ââ¬â Current Assets: Cash, cash at bank, A/c receivable, debtors, prepaid expenses. ââ¬â Expenses:- The amount spent in a business wit h a view to gain profit in the future is called expense. Examples are rent expenses, salaries expenses, advertisement expenses etc. ââ¬â Liabilities:- The financial responsibilities of the business for which it is liable are called liabilities. They are divided into two types:- ââ¬â Fixed Liabilities (Bank Loan, Bonds Payable, Mortgage Payable. ) ââ¬â Current Liabilities (Notes Payable, Unearned Income, Creditors. ) ââ¬â Capital:- The amount of money invested by the owner in the business is called capital. ââ¬â Revenue:- The incomes and the profits earned in the business through selling are called revenues. For example, Sales, Service revenue, Interest, commission earned. ââ¬â Drawings:- The amount of money taken away by the proprietor for personal benefits is called Drawings. 3- Describe the accounting rule of debit and credit for accounts like assets, expenses, liabilities, revenues and capital. ââ¬â Assets ââ¬â Increase in Asset is debit. ââ¬â Decrease in Asset is credit. ââ¬â Liabilities ââ¬â Increase in liabilities is credit. ââ¬â Decrease in liabilities is debit. ââ¬â Revenues ââ¬â Increase in revenues is credit. ââ¬â Decrease in revenues is debit. ââ¬â Expenses ââ¬â Increase in expense is debit. ââ¬â Decrease in expense is credit. ââ¬â Capital ââ¬â Increase in capital is credit. ââ¬â Decrease in capital is debit. ââ¬â Select any twenty categories from the above and identify a transaction that will have the required effect on the business. 1- Purchased Goods on credit 25,000. 2- Gave services for cash 5,000. 3- Brought cash in business 65,000. 4- Adjusting entry of out standing salaries 9000. 5- Wa ges wrongly debited to Sales 400. 6- Salaries wrongly debited to Drawings 600. 7- Paid to accounts payable in cash 1500. 8- Goods returned by customer worth 650. 9- Withdrew cash for personal use 550 Basic Accounting Assignment. (2018, Oct 26).
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