(i) Trade discount is a deduction given by the supplier to the buyer on the list price or catalogue price of the goods
(ii) It is given as a trade practice or when goods are purchased in large quantities. It is shown as a deduction in the invoice.
(iii) Trade discount is not recorded in the books of accounts. Only the net amount is recorded.

'Debit all expenses and losses and Credit all incomes and gains'. For nominal accounts, the rule is debit all expenses and losses and credit all incomes and gains

Journal Proper is a residuary book which contains record of transactions which do not find a place in the subsidiary books such as cash book, purchases book, sales book, purchases returns book, sales returns book, bills receivable book and bills payable book.

A trial balance can be prepared in the following methods.
(i) Total Method
(ii) Balance Method.
(iii) Total and Balance Method

(i) Ledger is known as Principal book of accounts because it is very useful for a business enterprise.
(ii) It is a book which contains all sets of accounts, namely, personal, real and nominal accounts
(iii) Account-wise balance can be determined from the ledger.
(iv) The ledger accounts are opened or maintained based on journal entries passed.

(i) The accounts must disclose all material information.
(ii) The Accounting reports should disclose full and fair information to the related parties.
(iii) The financial position and performance should be disclosed very honestly to all the users.

There are several persons who need the accounting information for various purposes. They can be classified into two.
(i) Internal users :
1. Owners
2. Management
3. Employees
(ii) External users :
1. Creditors and Financial institutions
2. Investors
3. Customers
4. General public
5. Tax authorities and regulatory bodies
6. Government
7. Researchers

(i) Measurement :
1. The main function of accounting is to keep systematic record of business transactions, post them to the ledger and ultimately to prepare the final accounts.
2. It also shows the current financial position of the business enterprises.
(ii) Comparison :
1. Accounting helps to compare the actual performance with the planned performance.
2. It is also possible to compare with the accounting policies.

Sales Account

Date	Particulars	J.F	Amount	Date	Particulars	J.F	Amount
2018 Jan 31	To Balance c/d		29,000	2018 Jan 1	By Cash A/c		8,000
				4	By Bank A/c		85,000
				11	By Jaya A/c		16,000
			29,000				29,000
				2018 Feb 1	By Balance b/d		29,000

(i) When the cheques are issued by the business, it is immediately entered on the credit side of the cash book by the business.
(ii) But, this may not be entered in the bank statement on the same day.
(iii) It will be entered in the bank statement only after it is presented with the bank.
(iv) It is also known as an outstanding cheque.

Following are the advantages of maintaining petty cash book:
(i) There can be better control over petty payments.
(ii) There is saving of time of the main cashier.
(iii) Cash book is not loaded with many petty payments.
(iv) Posting of entries from main cash book and petty cash book is comparatively easy.

Following are the principles of double entry system:
(i) In every business transaction, there are two aspects
(ii) The two aspects involved are the benefit or value receiving aspect and benefit or value giving aspect.
(iii) These two aspects involve minimum two accounts; at least one debit and at least one credit.
(iv) For every debit, there is a corresponding and equivalent credit. If one account is debited the other account must be credited.

(a) Endorsement of a bill :
(i) Endorsement means signing on the face or back of a bill for the purpose of transferring the title of the bill to another person. The person who endorses is called the "Endorser".
(ii) The person to whom a bill is endorsed is called the "Endorsee". The Endorsee is entitled to collect the money.
(b) Discounting of a bill :
(i) When the holder of a bill is in need of money before the due date of a bill, he can convert it into cash by discounting the bill with his banker. This process is referred to as the discounting of bill.
(i) The banker deducts a small amount of the bill which is called discount and pays the balance in cash immediately to the holder of the-bill.

(i) The debit and credit columns of an account are to be totalled separately.
(ii) The difference between the two totals is to be ascertained.
(iii) The difference is to be placed in the amount column of the side having lesser total. 'Balance c/d' is to be entered in the particulars column against the difference and in the date column the last day of the accounting period is entered.
(iv) Now both the debit and credit columns are to be total and the totals will be equal. The totals of both sides are to be recorded in the same line horizontally.
(v) The total is to be distinguished from other figures by drawing lines above and below the amount.
(vi) The difference has to be brought down to the opposite side below the total.
(vii) 'Balance b/d' is to be entered in the particulars column against the difference brought down and in the date column, the first day of the next accounting period is entered.
(viii) If the total on the debit side of an account is higher, the balancing figure is debit balance and if the credit side of an account has higher total, the balancing figure is credit balance. If the two sides are equal, that account will show nil balance.

The following are the limitations of trial balance.
(i) It is possible to prepare trial balance of an organisation, only if the double entry system is followed.
(ii) Even if some transactions are omitted, the trial balance will tally.
(iii) Trial Balance may tally even though errors are committed in the books of account.
(iv) If trial balance is not prepared in a systematic way, the final accounts prepared on the basis of trial balance may not depict the actual state of affairs of the concern.
(v) Agreement of trial balance is not a conclusive proof of the arithmetical accuracy of entries made in the accounting records.

(i) Accounting Standards provide the framework and norms so that the financial statements of different enterprises become comparable.
(ii) It becomes necessary to standardise the accounting principles and policies to ensure consistency, comparability, adequacy and reliability of financial reporting.
(iii) Accounting standards in India are issued by the Institute of Chartered Accountants of India (lCAI).
Definition:
In the words of Kohler, "Accounting standards are codes of conduct imposed by customs, law or professional bodies for the benefit of public accountants and accountants generally".

(i) According to this concept, revenues during an accounting period are matched with expenses incurred during that period to earn the revenue during that period.
(ii) This concept is based on accrual concept and periodicity concept.
(iii) Periodicity concept fixes the time frame for measuring performance and determining financial status.
(iv) All expenses paid during the period are not considered, but only the expenses related to the accounting period are considered.

(i) Accounting is the systematic process of identifying, measuring, recording, classifying, summarising, interpreting and communicating financial information.
(ii) Accounting gives information on :
1. the resources available
2. how the available resources have been employed and
3. the results achieved by their use.
(iii) The profit earned or loss incurred during the accounting period, value and nature of assets, liabilities, and capital can be ascertained from the information recorded in accounts.

Cash book with cash and discount columns

Date	Receipts	L.F	Amount Rs		Date	Payments	L.F	Amount Rs
			Discount	Cash				Discount	Cash
2017					2017
Jan.1	To Balance b/d			11,500	Jan.5	By Ramanathan A/c		10	300
10	To Rajagopal Alc		20	980	8	By Purchases A/c			400
15	To SalesAlc			400	21	By Shanthi A/c		5	295
					25	ByWages A/c			50
					31	By Sanjeev A/c		10	390
					31	By Balance c/d			11,445
			20	12,880				25	12,800
Feb. 1	To Balance b/d			11,445

Note: Discount column is not to be balanced.

In the Books of Nalanda Book store I. Purchases Book

Date	Particulars	Inward Invoice No.	L.F	Amount
				Details (Rs)	Total (Rs)
2017 Dec 1	M/s. Umadevi 100 copies Business statistics Book @ Rs. 80 each 100 copies Accountancy  Book @ 150 each			8,000 15,000	23,000
Dec 10	Subha & Co., 40 copies Economics book @ 80 each Less : Trade Discount @ 15%			3,200 480	2,720
	Purchases A/c                                          Dr.				25,720

II. Purchase Returns Book

Date	Particulars	Inward Invoice No.	L.F	Amount		Remarks
				Details (Rs)	Total (Rs)
2017 Dec 15	M/s. Umadevi 10 copies of Accountancy book @ Rs. 150 each				1,500	Damaged
Dec 26	Subha & Co., 6 Copies of Economis @ Rs. 80 each Less; 15% Trade Discount			480 72	408
	Purchases return A/c     Cr.				1,908

III. Sales Book

Date	Particulars	Id Invoice No.	L.F	Amount
				Details (Rs)	Total (Rs)
2017 Dec 7	Sridevi & Co. 240 copies Business Statistics @ Rs. 90 each 250 copies Accountancy books @ Rs. 170 each			21,600 42,500	64,100
Dec 18	Gupta Bros., 200 copies Economics books @ Rs. 95 each				19,000
	Sales A/c                                                    Cr.				83,100

Analytical Petty Cash Book
Dr.                                                           Analysis of Payments                                                                Cr.

Receipts ( Rs)	C.B.F.N.	Date	Particulars	V.N.	Total payment (Rs)	Printing & Stationery (Rs)	Conveyance (Rs)	Wages (Rs)	Postage and telegrams (Rs)	Carriage (Rs)	Sundries (Rs)	L.F.	Personal Accounts (Rs)
							2017July
2,000		1	To Cash
		7	By Writing pads and registers		100	100
		8	By White papers		50	50
		10	By Auto charges		200		200
		15	By Wages		300			300
		18	By Postal charges		100				100
		21	By Stationery		450	450
		23	By Tea expenses		60						60
		25	By Speed Post		150				150
		27	By Refreshment Expenses		250						250
		31	By Carriage		150					150
					1,810	600	200	300	250	150	310
		31	By Balance c/d		190
2,000					2,000
190		Aug 1	To Balance b/d To Cash
1810

 

Bank Reconciliation Statement as on 31^st March 2018

Particulars	Amount Rs	Amount Rs
Bank balance as per bank statement		15,000
Add: Bank charges not recorded in the cash book	250
Interest charged by bank	500
Bank paid Insurance Premium	300
Cheques deposited but not yet credited	900	1,950
		16,950
Less: Cheques issued but not yet presented	2,500
Balance as per Cashbook		14,450

Particulars	Amount Rs	Amount Rs
Bank overdraft as per cash book		20,000
Add: Cheque deposited but not yet credited	4,000
Interest on overdraft	2,000
Amount wrongly debited by bank	300
Cheque deposited but dishonoured	2,000	8,300
		28,300
Less: Cheques issued but not yet credited	1,000
Rent collected by bank	500
Cheque issued but dishonoured	5,000	6,500
Overdraft as per bank statement		21,800

In the books of Ganesan Journal Entries

Date	Particulars	L.F.	Debit Rs	Credit Rs
2017 Oct. 1	Cash A/c                               Dr.   To Capital A/c (Amount invested in business)		25,000	25,000
5	Bank A/c                               Dr. To Cash A/c (Cash paid into Bank)		12,500	12,500
10	Furniture A/c                            Dr.    To Bank A/c (Furniture purchased by cheque)		2,000	2,000
15	Purchases A/c                        Dr.     To Cash A/c (Cash purchases)		5,000	5,000
19	Vasu A/c                                  Dr.    To Sales A/c (Credit sales)		4,000	4,000
22	Drawings A/c                           Dr.     To Purchases A/c (For goods withdrawn for personal use)		500	500

Dr.                                    Ledger Account Cash Account                                                     Cr.

Date	Particulars	J.F.	Amount Rs	Date	Particulars	J.F.	Amount Rs
2017 Oct. 1	To Capital A/c		25,000	2017 Oct. 5	By Bank A/c		12,500
				15	By Purchases A/c		5,000
				31	By Balance c/d		7,500
			25,000				25,000
2017 Nov. 1	To Balance bld		7,500

Dr.                                                       Capital Account                                                           Cr.

Date	Particulars	J.F.	Amount Rs	Date	Particulars	J.F.	Amount Rs
2017 Oct. 31	To Balance c/d		25,000	2017 Oct. 1	By Cash A/c		25,000
			25,000				25,000
				2017 Nov. 1	By Balance b/d		25,000

Dr.                                                        Bank Account                                                          Cr.

Date	Particulars	J.F.	Amount Rs	Date	Particulars	J.F.	Amount Rs
2017 Oct. 5	To Cash A/c		12,500	2017 Oct. 10	By Furniture A/c		2,000
				31	By Balance c/d		10,500
			12,500				12,500
2017 Nov. 1	To Balance b/d		10,500

Dr.                                                     Furniture Account                                                          Cr.

Date	Particulars	J.F.	Amount Rs	Date	Particulars	J.F.	Amount Rs
2017 Oct. 10	To Bank A/c		2,000	2017 Oct. 31	By Balance c/d		2,000
			2,000				2,000
2017 Nov. 1	To Balance b/d		2,000

Dr.                                                    Purchases Account                                                         Cr.

Date	Particulars	J.F.	Amount Rs	Date	Particulars	J.F.	Amount Rs
2017 Oct. 15	To Cash A/c		5,000	2017 Oct. 22	By Purchases A/c		500
				31	By Balance c/d		4,500
			5,000				5,000
2017 Nov. 1	To Balance b/d		4,500

Dr.                                                      Vasu Account                                                             Cr.

Date	Particulars	J.F.	Amount Rs	Date	Particulars	J.F.	Amount Rs
2017 Oct. 19	To Sales A/c		4,000	2017 Oct. 31	By Balance c/d		4,000
			4,000				4,000
2017 Nov. 1	To Balance b/d		4,000

Dr.                                                              Sales Account                                                        Cr.

Date	Particulars	J.F.	Amount Rs	Date	Particulars	J.F.	Amount Rs
2017 Oct. 31	To Balance c/d		4,000	2017 Oct. 19	By Vasu A/c		4,000
			4,000				4,000
				2017 Nov. 1	By Balance b/d		4,000

Dr.                                                            Drawings Account                                                   Cr.

Date	Particulars	J.F.	Amount Rs	Date	Particulars	J.F.	Amount Rs
2017 Oct. 22	To Purchases A/c		500	2017 Oct. 31	By Balance c/d		500
			500				500
2017 Nov. 1	To Balance b/d		500

Journal Entries

Date	Particulars	L.F.	Debit Rs.	Credit Rs.
2016 June 1	Cash A/c      Dr. To Capital A/c (Commenced business with cash)		1,10,000	1,10,000
10	Cash A/c      Dr. To Capital A/c		50,000	50,000
28	Drawings A/c To Cash A/c (withdrawn for personal use)		20,000	20,000

Dr.                                                 Ledger Account Cash Account                                             Cr.

Date	Particulars	J.F.	Amount Rs.	Date	Particulars	J.F.	Amount Rs.
2016 June 1	To Capital A/c		1,10,000	2016 June 28	By Drawings A/c		20,000
10	To Capital A/c		50,000	30	By Balance c/d		1,40,000
			1,60,000				1,60,000
2016 July 1	To Balance b/d		1,40,000

In the books of Ravichandran trial balance as on 31.12.2016

S.No	Name of account	L.F.	Debit balance Rs	Credit balance Rs
1.	Capital			1,50,000
2.	Debtors		22,800
3.	Rent received			500
4.	Bank overdraft			3,100
5.	Creditors			5,500
6.	Premises		1,46,000
7.	Opening Stock		10,000
8.	Purchases		45,000
9.	Sales			75,000
10.	Return inwards		1,000
11.	Discount allowed		800
12.	Discount received			1,000
13.	Wages		2,900
14.	Salaries		3,500
15.	Commission paid		1,100
16.	General expenses		2,000
	Total		2,35,100	2,35,100

In the books of Mary Journal Entries

Date	Particulars		L.F	Debit Rs	Credit Rs
2018 March 1	Cement bags A/c	Dr		20,000
	To Sibi A/c				20,000
	(Cement bags bought on credit)
2	Electricity charges A/c	Dr		500
	To Bank A/c				500
	(Electricity charged paid by net banking)
3	Sibi A/c	Dr		5,000
	To Purchases return A/c				5,000
	(Goods returned to Sibi)
4	Drawings A/c	Dr		1,000
	To Purchases A/c				1,000
	(Being goods taken for personal use)
5	Advertisements expenses A/c	Dr		2,000
	To Cash A/c				2,000
	(Advertisement expenses paid)
6	Mano A/c	Dr		20,000
	To Sales A/c				20,000
	(Credit sales)
7	Sales return A/c	Dr		5,000
	To Mono A/c				5,000
	(Goods returned to Mano)
8	Bank A/c	Dr		15,000
	To Mano A/c				15,000
	(Payment received from Mano through NEFT)

In the Books of Purchases Book

Date	Particulars	Inward Invoice No.	L.F.	Amount
				Details (Rs)	Total (Rs)
2017 April 1	Prasad
	100 meters silk @ Rs. 450			45,000
	75 meters velvet @ Rs. 180			13,500
April 20	Hari Ram & Sons
	50 rolls kada cloth @ Rs. 730			36,500
	80 rolls cotton cloth @ Rs. 650			52.000	88,500
	Purchases A/c                     Dr.				1,47,000

Note: The transaction of Cash sales on April 24 should not be recorded in this book.

In the Books of Sales Book

Date	Particulars	Outward Invoice No.	L.F	Amount
				Details (Rs)	Total (Rs)
2017 April 10	Rathinam
	60 meters silk @ Rs. 490			29,400
	50 meters velvet @ Rs. 210			10,500
	Sales to Rathinam				39,000
April 18	Nathan & Sons
	100 meters silk @ Rs. 510				51,000
	Sales A/c              Cr.				90,900

In the books of Sudhir Chaudhary Trial balance as on 31.03.2017

S.No	Name of account	L.F	Debit balance Rs	Credit balance Rs
1	Capital			10,00,000
2	Plant and Machinery		13,40,000
3	Furniture		2,40,000
4	Cash in hand		60,000
5	Bank overdraft			78,000
6	Purchases		22,70,000
7	Sales			34,80,000
8	Debtors		9,64,000
9	Creditors			5,30,000
10	Rent		1,92,000
11	General expenses		14,000
12	Discount allowed		2,000
13	Sales return		6,000
	Total		50,88,000	50,88,000

In the books of Manohar Journal Entries

Date	Particulars	L.F.	Debit Rs.	Credit Rs.
2018 March 1	Cash A/c                              Dr. To Manohar's capital A/c           (Account invested in business)		60,000	60,000
2	Furniture A/c                        Dr. To Cash A/c                               (Furniture bought for cash)		10,000	10,000
3	Purchases A/c                     Dr. To Cash A/c                               (Goods purchased by cash)		25,000	25,000
6	Purchases A/c                      Dr. To Kamalesh A/c                        (Credit purchases)		15,000	15,000
8	Cash A/c                               Dr. To Sales A/c                               (Credit sales)		28,000	28,000
10	Hari A/c                                 Dr. To Sales A/c                               (Credit sales)		10,000	10,000
14	Kamalesh A/c                        Dr. To Cash A/c                                (Cash paid)		12,000	12,000
18	Rent A/c                                Dr. To Cash A/c                                (Rent paid)		500	500
25	Cash A/c                                Dr. To Hari's A/c                                (Cash received)		8,000	8,000
28	Drawings A/c                         Dr. To Cash A/c                                 (Withdrawn for personal use)		4,000	4,000

Importance of accounting is enumerated as below :
(i) Systematic records :
1. All the business transactions are recorded in the books of accounts.
2. Any event or happening which has financial effects is included in the accounting records.
(ii) Preparation of financial statements :
Results of business operations and the financial position of the concern are provided by accounting periodically through the preparation of financial statements namely profit and loss account and balance sheet.
(iii) Assessment of progress :
Analysis and interpretation of financial statements can be done to assess the progress made in different areas and it also identify the areas of weaknesses.
(iv) Information to interested groups :
Accounting supplies appropriate information to different interested groups 'like owners, creditors, management, employees, financiers, tax authorities, and government.
(v) Taxation :
Accounting records are the basis source for computation and settlement of sales tax, income tax, and other local taxes.

The various branches of accounting are

(i) Financial Accounting :
1. It involves recording of financial transactions and events.
2. It provides financial information to the users for taking decisions.
3. It ends up with the preparation of trading and profit and loss account and balance sheet,
(ii) Cost Accounting :  
It involves the collection, recording, classification and appropriate allocation of expenditure for the determination of the costs of products or services and for the presentation of data for the purposes of cost control and managerial decision making.
(iii) Management Accounting :
It is concerned with the presentation of accounting information in such a way as to assist management in decision making and in the day - to - day operations of an enterprise.
(iv) Social Responsibility Accounting :
It is concerned with presentation of accounting information from the view point of the society by showing the social costs and social benefits.
(v) Human Resource Accounting :
It is concerned with identification, quantification, and reporting of investments made in human resources of an enterprise.