TALENT ACADEMY ; MENTORING & COUNSELING Director faisal sir

  TALENT ACADEMY      ' TOPIC ADJUSTMENTS DRAWING S  NOTES BY FAISAL YAFAI     CA   C P T  ACADEMY IN ADILABAD Drawings of stock implies the Stock/Goods taken away by the proprietor or the partner for personal purposes. These goods are to be valued at cost and not at their selling prices. Recording » Journal Entry We know that ledgers provide the information we need in accounting and anything that gets into the ledger should be through the journal. Even this forms a transaction that should be recorded through the journal. Debit » Drawings a/c The value of goods taken away being drawings has to be debited to the "Drawings a/c" which represents the owner of the business. [Drawings a/c – Personal a/c – Debit the benefit receiver.]   Credit » The value of goods withdrawn by the proprietor represents the value of stock that has not been used for trading purposes. To reveal the cost of goods sold, the value of stock unused for trading activi

  Adjustments are nothing but transactions relating to the business which have not been journalised. Therefore, to deal with adjustments one needs to understand the journal entry to be recorded if the transaction representing the adjustment is to be recorded in the books of accounts. The adjustments relating to prereceived/receivable incomes are dealt with here. S Topic NOTES prepaid by            FAISAL YAFAI { Faculty in ACCOUNTS @ MS COLLEGE HYD                                ADJUSTMENTS NOTES  FOR CA C P T &  Inter students... Incomes Receivable   At the end of the accounting period, there may be incomes which have become due but have not yet been received. If the organistion is following the mercantile system of accounting, these incomes are to be brought into account. Credit » Income a/c "Income a/c" is a nominal account with a credit balance. The balance in the "Income a/c" generally indicates the total amount received on accou

djustments are nothing but transactions relating to the business which have not been journalised. Therefore, to deal with adjustments one needs to understand the journal entry to be recorded if the transaction representing the adjustment is to be recorded in the books of accounts. The adjustments relating to outstanding/prepaid expenses and pre-received/receivable incomes are dealt with here. Outstanding Expenses At the end of the accounting period, there may be expenses which have become due but have not yet been paid. If the organisation is following the mercantile system of accounting, these expenses are to be brought into account. Debit » Expenditure a/c "Expenditure a/c" is a nominal account with a debit balance. The balance in the "Expenditure a/c" generally indicates the total amount paid on account of the expenditure during the current accounting period. To bring the expenditure that has not yet been brought into account i

Capital, Profit, Loss :: An Understanding   Learning Accounting through an example     A poor unemployed person (we shall call him Oberoi) thought of making his livelihood by selling vegetables going around houses in a locality. He could only garner a small amount say Rs. 200/- with which he could start the business. • Business In a very simple sense, business implies something that is carried on with a motive to earn profit/income. Profit motive is inherent in business. Not that every business generates profits, but the motive behind every act/transaction in a business would be making profit. • Capital The amounts and other resources with which a business is started or carried on is called Capital. Owned Capital T he amounts and other resources employed in the business which belong to the owner/owners of the business are together called owned capital. Loaned Capital The amounts and other r