Basic Terms of Accounting

11th Accounts
Business : In general term any activity undertaken for purpose of earning profit   Capital : Capital represents cash and resources introduced by the owner(s) of the business to set up or to run the business   Drawing : Drawing represents cash and resources withdrawn by the owner of business for personal use   Owner : The person who starts a business by introducing capital   Assets : Assets are the tangible or intangible resources controlled or owned by the business to get future economic benefits   Liabilities : These are the obligations of business arisen by past transaction or event   Transaction : Any dealing between two persons that can be measured in money. For example sale of good by business is a transaction   Account : A record or log used to record the transactions of business   Voucher : Any written evidence of occurrence…
Read More

Class 11th Rectification of Error

11th Accounts
  Accounting errors are the errors committed by persons responsible for recording and maintaining accounts of a business firm in the course of accounting process.   Errors can be in the form of omission of recording of transaction in various books or posting in ledger or mistake in totalling or recording wrong amount or in wrong account.   There can be accounting errors which affect the agreement of trial balance and errors which do not affect the agreement of Trial Balance.   On the basis of nature accounting errors can be Errors of omission Errors of commission Errors of principle On the basis of impact on ledger accounts errors can be : one sided errors two sided errors Errors should never be rectified by erasing or overwriting. Methods of rectification…
Read More

Bill of exchange ,11th Class accounts

11th Accounts
We know that now-a-days in business transactions on credit are on the rise. When goods are sold on credit a huge amount of capital is blocked. Then there is no certainity when the amount will be paid. A solution of the problem is giving this fact in writing in proper form so that the buyer or debtor has to pay a definite sum to the seller/creditor on demand or after the expiry of a certain period. Such a formal document duly signed by both the parties is called a Bill of Exchange. When such a document is given by the debtor/buyer from his own side it is called a promisory note. These two documents when prepared as per provisions of the Negotiable Instruments Act, 1881 attains the position of money…
Read More

Final Accounts,class 11th

11th Accounts
Financial statements are the statements that are prepared at the end of the accounting period, which is generally one year. These include Income Statement i.e. Trading and Profit & Loss Account and Position statement i.e. Balance Sheet Following are the objectives of preparing financial statements: - Ascertaining the results of business operations : Every businessman wants to know the results of the business operations of his enterprise during a particular period in terms of profits earned or losses incurred. Income statement serves this purpose. Ascertaining the financial position : Financial statements show the financial position of the business concern on a particular date which is generally the last date of the accounting period. Position statement i.e. Balance Sheet is prepared for this purpose. Source of information : Financial statements constitute…
Read More