Chapter 01: Meaning, Objectives, Scope and Nature of Accounting Multiple Choice Questions(MCQs): TOPIC NO 01: Meaning of Accounting Q-1 Which of the following is generally considered the primary objective of accounting? A) To provide information useful for making economic decisions. B) To maximize the profits of the business. C) To keep the tax … Read more
Chapter 19 – Capital and Revenue (Expense & Income) This chapter is fundamental to understanding financial accounting, as it helps in correctly classifying business transactions either capital items or revenue items. Introduction The terms ‘Capital’ and ‘Revenue’ are core concepts in accounting. Capital generally refers to the funds or assets invested in a business to … Read more
Chapter 18 – Provisions and Reserves Provisions: A provision is an amount set aside to meet a known liability or expense when the exact amount cannot be determined with reasonable accuracy, but its occurrence is highly probable. It is a charge against profit, meaning it is created even if the business is incurring losses. Characteristics of … Read more
Chapter 17 – Depreciation Meaning of Depreciation Depreciation is the permanent and continuous decrease in the value of a fixed asset due to its use, wear and tear, passage of time, obsolescence, accidents, or depletion (in the case of wasting assets like mines). It’s an accounting method to allocate the cost of a tangible asset … Read more
Chapter 16 – Bank Reconciliation Statement Bank Reconciliation Statement (BRS) Definition: A Bank Reconciliation Statement (BRS) is a statement prepared by a firm to reconcile the bank balance shown in its Cash Book with the balance shown in the Pass Book (or bank statement) issued by the bank, on a specific date. Purpose: In … Read more
Chapter 15 – Rectification of Errors Rectification of errors in accounting is the process of identifying and correcting mistakes in financial records to ensure the accuracy and reliability of financial statements. Errors can arise from various stages of the accounting process, such as recording transactions, posting to ledger accounts, totaling, balancing, or carrying balances forward. … Read more
Chapter 14 – Trial Balance & Errors Trial Balance: The Trial Balance is a statement prepared with the debit and credit balances of all ledger accounts to check the arithmetical accuracy of the books of accounts. Characteristics of a Trial Balance It is a list of balances of all ledger accounts and the cash book. … Read more
Chapter 13 – Ledger Meaning & Definition: The Ledger is the principal book of accounts where all transactions recorded in the Journal or subsidiary books are posted to individual accounts. It’s often called the “Book of Final Entry” because it provides a summarized, categorized record of all transactions affecting a particular account. Purpose/Importance: Categorization: Organizes transactions … Read more
Chapter 12 Books of Original Entry – Special Purpose Subsidiary Books Subsidiary books, also known as … Read more
Chapter 11: Books of Original Entry – Cash Book Each subsidiary book is meant for recording all the transactions of a similar nature. For example, all cash transactions may be recorded in one book, all credit transactions in another book. Thus, the subsidiary books may be defined as books where the transactions are entered first … Read more