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CHAPTER: 2 , ACLOUNTING PROCESS _— : i! e Gae % UAIIT-1 BASTC ACCOUNTING procedure TOURNAL ENTRIES Advantages .ofedouble entry, Sqstero EG 1) By the use of this System dhe aeeuraty CFE TO tila. Uoxk Can be e&tablished, through tee device Or ’ ee ; . @ 2) ‘the protit. earned [loss rncunned during aperiod ia | AScerdained together with details . V2 ; 2) The financial position of the entity o7 He ins Can be ascertained ok the end of cath project» OF the financial statement . | | 4) Reseult of one year Moy be Compared with mee OT ie | Yetrs¢ Yeasons for the change mow be A.certained . fitubion Contenes through Pyeparut. = PrLViOUS CANNING s no ali sti berted to the shave © Kividends = earnings distributed to the Snarcholders lysed ia te%or of money and Be ce ns OOO, Bese | Enna Beers nttouns Supported by Propey documents ane vecovare A \ Under double entry Syst? : poet aang Tworopproarhes er *dnalyse the: dualiaspece oF ACE » Accounting! Eauction approach Y * Relationship of assets with that of [vecbilities 4 Owners equiry Q hiss in the equation form - Accounting EQUATION ° Capra = Contribution by the owney * (vabitities = vushat the business owes * Short term Liabilitees - + Long term lWabilrties = * Trade payables +- Short term Liabilities velabed to cvedit Purchase of merchandise. * Laxpense Payables :- other purchase and Sewvice reread on Cece MEQuity «- ousne’s clan / fund. *Eduuty + Long fern brabilities = Froted asseps + current assets ~ current Woibilt eves - © Loss incmd + Reduction 1 eQuity (€.-& 1) e Opening balancelcap ital = Closing Capital ~ aN cr o Liabilities at the end of yeor = Total Capital = closing Capital. - o Assets atthe end of the Yeca » = closing copital 4 Viaborlibies ab the endof the yor 2) Real ale :- Ov. what Comes tn (els) ety, what goes out 3) Nominal ale :- OY. all expenses G Wwsses CPaU CY: all ineome % gains Modena classif ication « reecerate) 1) Assets Dy Cinerease) 2) Lia litres CY, Cinerease) 3) Capit al Gye Cintrease) [Fe deurcare— vise verse) Ly Revenue CY. Cuncrease) 5) Expenditure py, _ Ctnerease) 6) Wwithcdnaw OY . Cuncvease) Towing surbsids cor bool’: 11 is the book of Original enty in which tyansactions Of entered on a daily basis in a chrondeg: 4 cal ovdey. Advantages 0 = Die » As transactions yecorcled in chronological ovde7, ane Cong yanscattion 0% fienely Complete information about the business © basis. Ke © Entries recorded in te journal ave Sup Asal logy Gu UGE eI Namakion, which is a Precise explanation ot doe oe PropeY understanding of the entry * JouToal forms the basis for poskin a the oe” and Teduce® tne Chances of e770: ea Sabian feosures: ofsGiP ee "GST ié levied on supply at eath oF the Suy * Loder Gist, tam i loved only the value addeal chou Gs Sa destination = based st ei or Ors SY, tem a ( s heve S no -tase on tax / Cascading 0 ae 08 % rade * Undey Gat, there is a hanmo nization of laws, proceduyi 4 OF tax across the county . |] {9estofedances, conderGustr l) D IM bra-stote Supply OF Gocals¢ Sewices -_ The location OF the apples f State / Union Ancl the place of Supply of Qoods Aservices axe inthe some / teryitory. ‘ | ‘ t lie I > Interstate supply of Gocals; Services .—~ he fo cabion of tre Supphey | Cdl iy Don SRE nae A ny ol Pherent S4AAES 0 the place of Supply OF qoods/sevvrces @ELe 1) Ge i } Union territories oy a stats and a union terytory -| HI ( Ht Input tax. - Credit of input tax already paid (ass) y)) © Output tow -- cast changed on supply of qoods|services macle by « i sO Gas) = Jowmalentrguic cose of Sales o | Account vecervable /oebtors Ale 07| Gross 2 (wntu- Ls J SEV Vico To Salesak Net & (exec: GST) « TO Output Gist | = ohasr | 1D Case Plivehase of Goods! service Purchase oly OF. Wet baste bs) Input Cast ale DY. | 2 of cot To Account Payable | Creditors a4, Pre 
