Download Nishi Sir's Accounts-Notes PDF

TitleNishi Sir's Accounts-Notes
File Size250.7 KB
Total Pages34
Table of Contents
                            “Preface”
	Author
	1.Nishi & Co A/c………….....Dr.
	DD/MM/YY
	DD/MM/YY
	DD/MM/YY
	To Cash A/c
		Total
	Purchase
	Expenses / Loss
	Gross Profit
	All liabilities
	Total
		Profit & LOSS ACCOUNT
		By Sundry Income
			Proprietor’s Capital Account
		Proprietor’s Capital Account
	EITHER		on 	Trading Account			DEBIT SIDE
	OR			on	Profit & Loss Account		DEBIT SIDE
		Specimen Form
		Transactions for the preparation of Bank Reconciliation Statement
			RECTIFICATION of ERRORS
			AS-2 Valuation of Inventories
		Accounting
			Accounting
	In the financial statements, there should be disclosure of
	The following disclosures are appropriate
		Types of Amalgamation
	The pooling of interest method
		Leases in the Financial Statements of Lessor
Amalgamation, Acquisition. Absorption, External Reconstruction
	If amount of P.C is given in the problem than follow Lump Sum Method
	To Equity Share Capital
	To Equity Share Capital
	To Cash/ Bank a/c
	P&L a/c or General Reserve a/c 		Dr.
                        
Document Text Contents
Page 2

What is Book –Keeping?

“Book” means “Books of Accounts” & “ Keeping” means “ Maintaining the books of Accounts.”

It is a Scientific Method to record day-to-day “ BUSINESS TRANSACTION” in books of Accounts in such
a manner that it gives us a correct and clear picture of financial position of the business.

Classification of Accounts:

As we are knowing that, in every transaction at least two aspects / amount are affected, this two fold

of every transaction in two Accounts is know as Double Entry System of Book – Keeping.

Three Golden rules for Book – Keeping & Accountancy are a follows:

 For Personal A/c: “DEBIT THE RECEIVER
CREDIT THE GIVER”

e.g. .1.Nihikant Pays Rs3000/- to M/s Nishi & Co.
Ans: DEBIT M/s Nishi & Co. A/c (As receiver) &

CREDIT Nishikant’s A/c (As giver)

 For Real A/c : “DEBIT WHAT COMES IN ;
CREDIT WHAT GOES OUT”

e.g. 2. Purchase goods for Cash Rs 3000/-
Ans; DEBIT Goods A/c (As comes in)

CREDIT Cash A/c (As goes out)

 For Nominal A/c: “ DEBIT ALL LOSSES & EXPENSES
CREDIT ALL INCOME &* GAINS”

e.g.3. Paid Salary Rs 3000/-
Ans: DEBIT Salary A/c (As expenses)

CREDIT Cash A/c (As goes out)

JOURNAL: It is a book of Prime Entry, in which daily transactions are recorded for the first time.

JOURNALIZE: it means record the transactions by passing Journal Entry; i.e. giving effects of every
transaction in terms of debit and credit by applying rules of Debit & Credit of different types of
Account

Nishikant’s Notes 2 / 34

Real A/c
Related with Tangible &
Intangible Assets or Things
(e.g. Cash A/c, Goods A/c, Goodwill A/c, Land
Building A/c, Plant & Machinery A/c)

Nominal A/c
Related to Expenses / Losses & Income /
Gains (e.g. Wages / Salary A/c, Rent A/c,
Loss by fire / Theft A/c etc)

Personal A/c
Name of the person / Institution;
Outstanding & prepaid Expenses
(e.g. Nitin’s A/c, Thakur College A/c, O/s
salary A/c etc)

Impersonal A/c

Page 33

7. Entry for discharge of Debenture of Vendor Co. by Issue of Debenture of purchasing
Co.
New Debenture (Vendor Co.) a/c Dr.
Discount on issue of Debenture a/c Dr.

To debenture of purchasing Co. a/c
To Security Premium (of issue of Debenture) a/c

8. Entry for liquidation / realization expense paid & bears by purchasing Co.
Capital Reserves / Goodwill A/c Dr.

To Cash/ Bank a/c

(Note: For amalgamation & external reconstruction opening balance of purchasing a/c from the
prepared from above entry but for absorption opening balance sheet of purchasing Co will be prepared
by following manner. Old balance sheet of purchasing Co.

B. Merger Method / Pooling of interest method:
1. Entry for fresh issue

Bank a/c Dr.
Discount on issue of share a/c Dr.

To Share Capital a/c
To Security Premium a/c

2. Entry for preliminary expense paid
Preliminary expense A/c Dr.

To Bank a/c

3. Entry for incorporation of Asset & liability of Vendor Co.
Fixed Asset a/c Dr.
Investment a/c Dr.
Current a/c Dr.
Misc Expenditure a/c Dr.

To all Liability (including Share Capital) a/c
To Reserves & Surpluses (Asset general reserve) a/c
To Debenture (vendor Co) a/c
To Business Purchase (amount of P.C) a/c
To P& L a/c or general reserve a/c(any difference) a/c

(Note: Any difference in debit / credit will be transferred to general reserve a/c. or profit & loss
a/c not in Goodwill & capital reserve.)

4. Entry for P.C Payable
Business Purchase a/c Dr.

To Liquidator of Vendor a/c

5. Entry for discharge of P.C
Liquidation of Vendor Co. a/c Dr.
Discount on issue of share Co. a/c Dr.

To Equity Share Capital
To Preference Share Capital
To Security Premium
To Bank

(Note: Preference shareholder of vendor Co. should be allotted preference share of purchasing
Co.)

6. Payment of Debenture of Vendor Co
-----% Debenture a/c (Purchasing Co.) a/c Dr.

To ----% Debenture a/c
To Cash/ Bank a/c

7. Liquidation expense paid & bears by purchasing Co

Nishikant’s Notes 33 / 34

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