1) Bad debts: - Unrecoverable amount from the debtors is known as bad debts.

Bad debts denote the amount lost from debtors to whom the goods were sold on credit.

2) Principles of accounting & Golden rules:-

Personal A/C: Debit the receiver
Credit the giver
EX: Drawing A/C, capital a/c, bank overdraft.
Real A/C: Debit what comes in
Credit what goes out.
EX: purchaser a/c, cash a/c, good will, machinery a/c.
Nominal A/C: Debit all expenses and losses
Credit all gains and incomes
EX: salaries, discount, bad debts, wages.

3) Concepts of accounts:-
A. separate entity concept
B. going concern concept
C. money measurement concept
D. cost concept
E. dual concept
F. accounting period concept
G. periodic matching of cost and revenue concept
H. realization concept

4) Amortization: - the process of write-off intangible assets is term as amortization.

5) Accounts payable: Money owed to vendor.

Accounts payable means the company paid the various types of the accounts or expenses.
Accounts payable means amount which is payable by the company against various accounting
EX: sundry creditors, wages & salaries etc.

6) Accounts Receivable: - money which is owed to a company by a customer for products &
services provided on credit. This is treated as current assets on a balance sheet. A specific sale
is generally only treated as an account receivable after the customer is sent an invoice
Ex: sales, in coming payment.

7) BRS (Bank Reconciliation Statement):- it is a statement reconciling the balance as shown

by the bank passbook and the balance as shown by the cash book. Obi: to know the difference
& pass necessary correcting, adjusting entries in the books.

8) Contra Entry: - which accounting entry is recorded on both the debit and credit side of the
cash book is known as the contra entry.
9) Credit note: - the customer when returns the goods get credit for the value of the goods
returned. A credit note is sent to him intimating that his a/c has been credited with the value of
the goods returned.

10) Debit note: - when the goods are returned to the supplier a debit note is sent to him
indicating that his a/c has been debited with the amount mentioned in the debit note.

11) Petty cash book: - Petty cash is maintained by business to record petty cash expenses of
the business such as postage, cartage, stationery, etc.

12) Cheque: - a bill of exchange drawn on a specified banker and payable on demand...

13) Prepaid expenses: - Amount paid in advance for the product is known as a prepaid
expense.
Ex: rent

14) Capital income: - the term capital income means an income means an income which does
not grow out of or pertain to the running of the business proper.

15) Revenue income: - the term, which arises out of the course of the regular business
transaction of a concern.

16) Capital expenditure: - it means an expenditure which has been incurred for the purpose of
obtaining a long term advantage for the business

17) Revenue expenditure: - an expenditure that incurred in the course of the regular business
transaction of a concern.

18) Differed revenue expenditure: - an expenditure, which is incurred during an accounting

period but is applicable further periods also:
Ex: heavy advertisement

20) Depreciation: - Decreasing the value of asset due to wear and tear and obsolesce of asset.
Decreased value of an asset for its use in the business is known as deprecation.

21) Drawing: - Withdrawal of money or goods by the proprietor from the business for his personal
use.

22) Dividend: - that part of the profit which is distributed to the share holder is known as
dividends

23) Bills payable: - Written promises issued to other traders for purchase of goods are known
as bills payable.

24) Bills Receivable: - Written promises received from other traders for selling the goods are
known as bills receivable.
25) Intangible Assets: - Intangible assets mean the assets which is not having the physical
appearance. And it’ s have the real value, its shown on the assets side of the balance sheet.

26) Accrued Income: - Accrued income means income which has been earned by the business
during the accounting year but which has not yet been due and, therefore, has not been
received.

27) Outstanding income: - Outstanding income means income which has been due during the
accounting year but which has not so far been received by the firm.

28) Suspense account: - the suspense account is an account to which the different in the trail
balance has been put temporarily.

29) Cash flow statement: - it is a statement depicting change in cash position from one period
to another.
A statement of charges in the financial position of a firm on cash basis called cash flow
statement.

30) Good will: - the present value of firms anticipated excess earning...

31) Outstanding expenses:- Outstanding expenses refer to those expenses which have beco
weme due during the accounting period for which the final account have been prepared but
have not yet been paid.
Ex: outstanding salaries.

32) Provision: - any amount provided by charging to P&L a/c to meet a known feature liability
or loss is known as provision.

33) Tangible assets: - the assets which are in existence physically (which can be seen) are
known as tangible assets.

34) Meaning of ledger: ledger is a set of accounts. It contains all accounts of the business
enterprise whether real, nominal, personal.

35) Posting: it means transferring the debit and credit items from the journal to their respective
accounts in the ledger.

36) Meaning of journal: - journal means chronological record of transactions.

37) Trail balance: - trail balance is a statement containing the various ledger balances on a
particular date.

38) Branches of accounting:-

A. Financial account
B. Management account.
39) What is finance: - supply of money when it’ s required. Top level management.

40) Meaning of working capital:- the founds available for conducting day to day operations
of an enterprise also represented by the excess of current assets over current liabilities.

Working is nothing but day to day transactions of the business. The difference of the current
assets and current liabilities.

41) Overdraft: - if money withdraw from the bank is more than the deposited amount then, the
excess drawn amount is known as overdraft.

42) Credit purchases:-

Purchases a/c dr
To Vendor a/c.
43) Cash purchases:-
Purchases a/c dr
To cash a/c
44) Outstanding Salaries a/c
Salaries a/c dr
To Outstanding salaries a/c.

45) Rent paid:-

Rent a/c dr
To cash a/c.
46) Prepaid exp:-
Prepaid expenses a/c dr
To Expenses a/c
47) Outstanding exp:-
Expenses a/c dr
To Outstanding exp a/c
48) Prepaid insurance premium:-
Prepaid insurance premium a/c dr
To insurance premium a/c

49) Rent received:-

Cash a/c dr
To Rent received a/c
50) cash sales entry:-
Cash a/c dr
To Sales a/c
51) Credit sales entry:-
Customer a/c (person name) dr
To sales a/c
52) cash deposit in to bank:-
Bank a/c dr
 To Cash a/c

53) Salaries paid entry:-

Salaries (expenditure) a/c dr
To cash a/c
54) Interest paid entry:-
Interest a/c dr
To cash a/c
55) Purchase returns entry:-
Vendor (person) a/c dr
Purchase returns a/c
56) Sales returns entry:-
Sales returns a/c
To customer (person) a/c
57) Depreciation entry:-
Deprecation a/c dr
To assets (machinery) a/c
58) Bad debts entry:-
Bad debts a/c dr
To sundry debtors a/c
59) Commission received in cash entry:-
Cash a/c dr:-
To commission received a/c
60) sales discount entry:-
Cash a/c dr
Discount a/c dr
To sales a/c (allowed)

Sales a/c dr
To cash a/c
To discount a/c (received)

61) Accrued income:-

Accrued income a/c dr
Income a/c
62) Income received in advance:-
Income a/c dr
To Income received in advance a/c
63) Closing stock:-
Closing stock a/c dr
To Trading a/c
64) Goods used for private use:-
Drawings a/c dr
To purchases a/c
65) Stock destroyed in fire accident:-
 Stock destroyed in fire accident a/c dr
To treading a/c

Insurance claim a/c dr

To abnormal loss a/c
To stock destroyed in fire accident a/c

Profit &loss a/c dr

To abnormal loss a/c

67) Interest on capital:-

Interest on capital a/c dr
To capital a/c

68) Interest on drawing a/c:-

Drawings a/c dr
To interest on drawings a/c

69) Provision for doubtful debts:-

Profit &loss a/c dr
Provision for doubtful debts a/c

70) Bank charges entry:-

Bank charges a/c dr
To cash a/c

71) Payment entry:-

Expanses a/c dr
To bank a/c

BANK
Bank credit means in SAP debit
Bank debit means in SAP credit.
• All in transactions (checks in, wire in, ach in & eft in) it should be customer
related once( Income/ Receipts)

• All out transactions (checks out, wire out, ach out & eft out) it should be vendor
related once ( Out goings/Payments)

Income OR Receipts

Checks in entry: - Once side entry.

Main bank account (AR Deposits A/C)
To clearing account (ach, wire & checks)
Lockbox entry: anther leg
Clearing account
To Respective gl account
Wire out entry:-

JPM - Wire Out Dr (Clearing account)--100104

To JPM -Cott AR Deposit Cr (Main Bank A/C)-100100

Respective account Dr (XXXXXX)

To JPM - Wire Out Dr (Clearing account)--100104

Wire in entry:-

BoA-USD (Main Bank) Dr--100900

To BoA-USD (Clearing account)—100903

BoA-USD (Clearing account)—100903

To Respective account Dr (XXXXXX)

1) Bad debts Entry:-

Bad Debts DR

To Allowance for Doubtful Accts CR

2) Recurring (Tax) Entry:-

Tax DR (632030)

To ACCR Tax Fees CR (201320)

3) Accrued Property Tax:-

Accrued expenses are expenses that have been incurred, but not yet paid for.
To put it another way, an accrued expense is paid after being recorded on
The books. Every adjusting entry for accrued expenses debits an expense
Account, increasing expenses on the income statement and reducing net
Income, and credits a payable account, increasing liabilities on the balance
Sheet
Property Taxes DR

To ACCR Property Tax CR

4) Loblaw’ s data service:- Loblaw’ s (customer) for data services.

Market Research DR (640080)

To Prepaid – Deposits CR (108035)
5) Prepaid Insurance Entry:-

1. Prepaid Insurance DR

To Vendor (e.g. AON risk services) CR

2. Expenses A/C (e.g. prepaid insurance) DR

To Prepaid Insurance CR

Final Entry

3. Expenses A/C (e.g. prepaid insurance) DR

To Vendor (e.g. AON risk services) CR

Setup Prepaid (when the invoice is actually paid)

Debit Prepaid other (gl#108040)

Credit cash
Monthly JE (when invoice is finally paid)

Debit marketing expense gl#640020 (cost center 2010208)

Credit Prepaid other (gl#108040)
June Accrual

Debit marketing expense gl#640020 (cost center 2010208)

Credit accrual (gl#201060 CC 2010)