This document provides an overview of key accounting concepts. It defines accounts, accounting, transactions, the journal, voucher, posting, accounting periods, trial balance, and the three basic financial statements. It also describes assets, liabilities, debtors, creditors, sales, purchases, payments, receipts, the steps of accounting, and the golden rules of accounts. Key terms like expenses, incomes, direct expenses, direct incomes, indirect expenses, and indirect incomes are also defined in relation to accounting entries and the trial balance.

1. Accounting Concepts

2. Account v/s Accounting
• An account is a statement of transactions that affect any particular
assets, liability, expense, income.
• Accounting is the Act of recording, classifying, summarizing
transactions of an organization and interpreting the results.

3. Transactions
• Exchange of goods and services for money or money’s worth between
two or more persons or parties is known as Transaction.
• Cash Transaction – When goods are exchanged for cash it is
known as Cash Transaction.
E.g. ‘A’ purchased goods from ‘B’ and paid cash.
• Credit Transaction – When cash is not paid or received in
exchange of goods and service, is known as Credit Transaction.

4. Journal
• Journal is a book in which business transactions are entered in
chronological order. A record of single business transaction is called
Journal entry. Every journal entry is supported by a voucher.

5. Voucher
• A voucher is a document containing the details of a financial
transaction

6. Posting
• Posting is the process by which information about transactions is
transferred or moved to an account.

7. Accounting Period
• A regular period of time such as a quarter or a year.

8. Trial Balance
• A trial balance is a list of all ledger accounts. It is prepared after,
• All the transactions are entered in the Journal,
• Journal entries posted to the Ledger and
• The Ledger accounts are balanced.

9. Three basic Statements of Accounts
• Trading A/c – It is prepared to get the Gross Profit earned by the
organization over a specified period.
• Profit & Loss A/c – It gives the Net Profit earned by the company,
after considering all other incomes and expenses incurred over a
period.
• Balance Sheet – The Balance Sheet is a statement that summarizes
assets and liabilities of a business.

10. Assets
• All the properties held by a businessman, uses without any intention
of selling at profit are called assets. Anything which belongs to you
and which is saleable in market. Any income receivable is also an
asset.

11. Liabilities
• The Amount payable by a business firm to an outsider is known as
liability.

12. Sundry Debtors
• The person from whom an amount is receivable is known as Sundry
Debtor.

13. Sundry Creditors
• The person to whom an amount is payable is known as Sundry
Creditor.

14. Sales
Sundry Debtors
Receipt
Sundry Debtors
Purchase
Sundry Creditors
Payment
Sundry Creditors

15. Steps for Accountings
Steps Manual A/c Tally
1 Transactions  
2 Journal Entry  
3 Ledger  
4 Trial Balance  
5 Trading A/c  
6 Profit & Loss A/c  
7 Balance Sheet  

16. Golden Rules of Accounts
• Real A/c – Debit what Comes In
Credit what Goes Out.
• Personal A/c – Debit the Receiver
Credit the Giver.
• Nominal A/c – Debit all Expenses & Losses
Credit all Incomes & Gains.

17. Trial Balance
Trial Balance
Dr Cr
Direct Expenses
(Factory Expenses)
Eg: Wages
Direct Incomes
(Factory Incomes)
Eg: Scrap
Indirect Expenses
(Office Expenses)
Eg: Salary, Commission Paid
Indirect Incomes
(Office Incomes)
Eg: Discount Recd, Comm. Recd

18. Thank You
• Lets Start With Creating Company in Tally