Discuss in detail the importance of accounting

"Only monetary transactions are recorded in accounting". Explain the statement.

State the principles of double entry system of book keeping.

Prepare cash account from the following transactions for the month of January 2018. (Direct Ledger Posting)

Jan 1	Commenced business with cash Rs. 62,000
3	Goods purchased for cash Rs. 12,000
10	Goods sold for cash Rs. 10,000
12	Wages paid Rs. 4,000
25	Furniture purchased for cash Rs. 6,000

The following trial balance has certain errors. Redraft it.

S.No	Name of account	L.F	Debit balance  Rs.	Credit balance  Rs.
1	Building		60,000
2	Machinery		17,000
3	Returns outward		2,600
4	Bad debts		2,000
5	Cash		400
6	Discount received		3,000
7	Bank overdraft		10,000
8	Creditors		50,000
9	Purchases		1,00,000
10	Capital			72,800
11	Fixtures			5,600
12	Sales			1,04,000
13	Debtors			60,000
14	Interest received			2,600
	Total		2,45,000	2,45,000

Mention the subsidiary books in which the following transactions are recorded.
(i) Sale of goods for cash
(ii) Sale of goods on credit
(iii) Purchases of goods on credit
(iv) When the proprietor takes goods for personal use
(v) Goods returned to suppliers for which cash is not received immediately
(vi) Asset purchased as credit.

Write a brief note on accounting treatment of discount in cash book.

Explain why does money deposited into bank appear on the debit side of the cash book, but on the credit side of the bank statement?

The following errors were located at the time of preparation of the trial balance. Rectify them.
(a) Sale of goods to Akila on credit for Rs. 1,520 posted to her account as Rs. 1,250.
(b) Bought goods from Narendran on credit for Rs. 5,500, credited to his account as Rs. 5,050.
(c) Purchase of furniture from Ravivarman for Rs. 404 on credit were debited to furniture account as Rs. 440.
(d) Purchased machinery for cash Rs. 2,000 was not posted to machinery account.
(e) The total of purchases book Rs. 899 was carried forward as Rs. 989.

State the advantages and limitations of written down value method of depreciation.