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Basics of Accounting
Accounting - In , business traditionally accounting used to be done manually , but in modern day they have set up proper technological system called tally to do work efficiently and in a better way .
Accounting is the art of recording , classifying , summarising in a significant manner in terms of money and transaction to sort and summarise .
In business , buying all office stationary can be categorised on the basis of cash or banking related payments .
STEP 1 - Record all transactions in Journal
STEP 2 - Putting it in ledger - bank or cash transactions
STEP 3 - Trial balance - All accounts visible
STEP 4 - Financial Statement
What kind of Entries we do in Accounting ?
Any monetary Account is recorded in accounting
example - Company will record transaction for sweet distribution in office .
An order received will not be recorded in books of account .
50000 Rs paid as advance to supplier is a transaction therefore recorded
Update received from bank about interest credited in account therefore should be recorded.
A business men purchase pen of 50 but now if its gold plated pen then it can be expense if gifted or can be valuable if sold .
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