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Accounting Definitions | accounting meaning | tally basics

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In the following context some Accounting Definitions, accounting meaning and basic concepts related to the Accounting Definitions are given.

Accounting meaning and Accounting Definitions:

1. Asset: – You can call it as your own things and at the time of need you can convert it into cash.

This is converted to cash.

• Tangible assets: – see, touch, viewable.
• Intangible assets: – goodwill, royalty.

Fixed Assets: These are the things which are not as direct cash but these are non-living things. Fixed assets are those assets which are purchased for operating the business and not for resale.

E.g. land, building, machinery and furniture.

Current Asset:  These are the things which are now with you. These are assets of the business which are kept for short term for converting into cash.

E.g. debtors, bills receivables and bank balance.

 

2. Liability: – It is the amount which is payable to another party, you can say it as a loan also.

• Long-term liabilities: Theses are payable after a long term which means (generally more than one year).
• Current liabilities: These are payable in near future which means (generally within one year).

3. Debtors: –
4. Creditors: – Person is creditor of the firm when goods are purchased on credit from him.
5. Expense: – It can be the money which can be spend for company work like E.g. payments of salary, wages paid, rent of machinery or land or any other thing required for your company, etc.
6. Income: – income= revenue- expense
7. Discount: – It is type of reduction in the prices of goods by the businessman
8. Gain: – It is a profit of an irregular nature.

e.g. capital gains.

9. Transaction:

• Cash Transaction: – It involves immediate receipt or payment of cash.
• Credit Transaction: – Here receipt/payment of cash is postponed to a future date.

10. Voucher: – Any written document of a business transaction.

• Trading A/c

Exp.                                                    Income

• Profit & loss

Exp                                                      Income

11. Expenses & Income

Direct & indirect.

• Cash book: – Expenses
• Bank book: – loan withdraw, depositing
• Petty cash book – Small amount of expenses mentioned in petty cash book (day to day expense transaction) .

Accounting Concepts:

• Purchase / Sale : –

Cash/ credit

• Purchase return / Sale return

• Closing stock: – end of the year.
• Opening stock: – start of the year.
• Financial year: –     3 August 16

2 August 17

• Depreciation: –decrease the asset value
• Appreciation: –increase the asset value.

How to create company?

• Alt+F3 –Modification (company info)
• Alt+F1 – Shut Company.
• Ctrl+A – Save.
• Alt+D – Delete.

Group: –

• 15 – Primary group.
• 13 – Secondary group.

Ledger wise: – List of account.

Amount wise: – Balance sheet.

Purchase: Group

•             Purchase@5%
•             Purchase@12%
•             Purchase@18%
•             Purchase@28%

By default, 2 ledgers are present in Tally:

• Cash Ledger
• Profit & Loss a/c

 

Related Articles: 

1. Basic Accounting Concepts Part 1 

Some More: DBMS/ WT/ DMDW 

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