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Introduction of

Book keeping & Accountancy

Point of discussion
Meaning & Definition of Book - Keeping
Features of Book - keeping
Objectives of Book - keeping
Meaning & Definition of Accountancy
Branches of Accounting
Basic accounting Terminologies

Meaning & Definition

Book keeping is a process of recording business transitions in the books of
accounts in a very systematic manner

According to J.R. Batilobi :

Book Keeping is an art of recording business dealings in a set of
According to Nocth Cott :
Book Keeping is an art of recording in the books of accounts the
monetary aspects of commercial or financial transactions.

Features of Book keeping

Objectives of Book keeping

Permanent record
To know the P&L
To know the total amount of Capital
To know the total assets and liabilities
To know the progress of the business
To know Legal requirement and tax liabilites

Meaning & Definition of Accountancy

Accountancy includes Book keeping & classifying, summarizing and
interpreting of the business transactions.

According to Kohler :
Accountancy refers to the entire body of theory and process of

According to Robert N. Anthony :

Nearly every business enterprise has an accounting system. It is a
means of collecting, summarizing, analyzing and reporting in monetary
terms information about the business transactions,

Branches of Accounting
Financial Accounting

Trial balance
Final accounts

Cost Accounting

Cost Sheet
Job & Contract
Process Costing
Operating Costing

Management Accounting

Ratio analysis
Break even point
Standard Costing
Analysis of financial S

Basic accounting Terminologies

Business Transaction
Entry & Narration
Profit & Loss
Assets, Liabilities & Net worth
Capital & Drawing
Expenditure and types of expenditure
Good will
Bad debts
Debtors and creditors
Solvent & Insolvent
Accounting Year
Folio, Insurance, Freight Deposit

Business Transaction
Any dealing of business that involves buying and selling of goods and
services in exchange of value be called as business transaction.
Cash Transaction
Credit Transactions

Entry, Narration & Goods

Entry : Recording of transaction in the proper form or method in the books
of accounts is called an entry. It is a first record of any business transaction
in the books of accounts
Narration : A brief explanation of the business transaction for which an
entry is passed is called as a narration. It starts with a word Being (.)
Goods: The commodities or articles in which the trader deals are called as
goods for that business

Profit & Loss

Profit : Excess of income over the expenses during the accounting year is
called a profit
Loss : Excess of expenses over the income is called loss

Assets, Liabilities & Net worth

Assets : Property of any kind owned by a businessman is called an asset,
Liabilities : Total amount payable by the business to others is known as
Net Worth or owned equity : The amount of fund provided by the
proprietor in the business is called as net worth or capital also

Types of Assets
Assets : Property of any kind owned by a businessman is called an asset,
Fixed Assets : Ex..
Current Assets : Ex..
Fictitious Assets : Ex..

Accounting concept
Accounting principles are those rules which are to be adopted by the
Accounting is the language of business. This are general guidelines for
sound accounting practices
1) Reliable financial statements
2) Generally acceptable basis of measurement
3) Valid and appropriate assumptions
4) Uniformity in presentation
5) Valid and appropriate assumptions
6) Proper information to all

Accounting concepts
1) Business entity
2) Money measurement
3) Cost concept
4) Consistency concept
5) Conservatism
6) Going concern
7) Realization
8) Accrual
9) Dual aspect
10) Disclosure
11) Materiality
12) Revenue recognition principle
13) Marching principle
14) Accounting standards

entry book system
Study of double entry book keeping system
Methods of recording accounting information
Definition of double entry system
Principle & Advantages of DES
Conventional Accounting System
Account and its Classification
Debit & Credit
Rules of Accounts & rules of Debit credit
Analysis of Transactions

Double Entry book system

Italian Merchant Luca D Bargo Pacioli in 1949
There are two aspects of every business transactions.
Recording dual aspects of business transactions in the books of accounts in
terms of Debit & Credit is known as Double Entry System of Book

Methods of recording DES

Indian Style
Single Entry System
Double Entry System

Definition of Double Entry System

Every business transaction has a two fold effect and that it affects two
accounts in opposite directions and if acomplete record is to be made of
each such transaction it would been necessary to debit one account and
credit another account. It is this recording of two fold effect of every
transaction that has given rise to the term double entry J.R. Batliboi

Principles of DES

Minimum Two aspects

Two accounts
One is receiver and other is giver
One account is debited the other account must be.

Advantages of DES
1) Accuracy
2) Business Result
3) Complete Record
4) Comparative study
5) Common acceptance

Classifications of Account

Analysis of Transactions

Point of discussion
Introduction, Meaning & specimen
Voucher internal & external voucher
Cash & Petty cash voucher
Cash and credit memo
Debit and credit note
Pay in slip
Withdrawal slip
Bank pass book, Bank statement & Bank advice

The document required for recording of transactions in the books of accounts are called
as sources of documents.
This document is the legal proof of the transaction which is recorded in the books of
The accountant should confirm that every entry made is supported by sources
The document is the base of passing the entry.

Voucher Internal & External

Voucher : Voucher is a documentary evidence in support of a business transacting.
like cash Expenses, purchases or sales etc.
It is used as a support for ascertainment of profit in transaction
It helps the auditor to perform his duties
It confirm the date of transaction, the amount and the person details
It describe the nature of transaction

Journal Voucher
Journal Voucher is basic / original Voucher

In details
Cash Voucher
Petty cash Voucher
Cash memo
Credit memo
Debit note / credit note
Pay in slip
Withdrawal slip
Types of Cheque
Bank advice