What is GST Accounting?

July 13, 2022

Terms of accounting. 






Capital- capital is an amount that the proprietor of the company holds assets or gets from his relatives to invest. 
Like a shopkeeper opens his shop after investing an amount that he gets from friends,  and his kiths and kins.



Income- income is an amount of money earned from any firm or company as a benefit in a certain period of time. 



Assets - the amount of money that a company owner owns in the form of cash, stock, sundry debtors, loans and advance assets,  bank account, etc. 



Liabilities- It is the amount of money that a proprietor of a company needs to pay for others in the form of provisions, sundry creditors, duties, and taxes. 



Income = assets - liabilities

Liabilities=income - assets 

Assets = Liabilities + Income



Proprietor- proprietor is an owner of the company who takes all the responsibilities of the company. 



Drawings - All expenses which are taken or drown by the proprietor of the company are called drawings. 


Equity - The equity refers to a company's book value, which is the difference between liabilities and assets on the balance sheet. 
This is also called the owner's equity, as it's the value that an owner of a business has left over after liabilities are deducted.

Revenue- The total amount of income generated by the sale of goods and services related to the primary operations of the business. Commercial revenue may also be referred to as sales or as turnover. Some companies receive revenue from interest, royalties, or other fees.


Profit- When a company's income is more than the total value of investments. 



Loss- When the total income of any is lesser than the investment that is called loss.




Sundry debtors - those parties who own the company and borrow stock is called sundry debtors. 




Sundry Creditors - those parties whom the company owes and they lend to the company are called sundry creditors.




Duties and taxes - All those expenses which are payable to the income tax department under the law of the national rules and other related prices of experiences cover the duties and tax liability. 



Sale - When a company sells the stock to buyers or wholesalers with certain rates of items is called a sale. 



Purchase- When the company received the stock against a certain investment is called purchase.



Current Stock - The value of complete items that the company has stored to resale for the purpose of a certain profit is called stock. 




Balance sheet- Both sides of a balance sheet are Liabilities and Assets. The balance sheet actually shows the total transaction report of the year. 



Trial Balance- Trial balance is the monthly, quarterly, and weekly transaction report of the company. It shows the two sides of the trial balance. debit and credit. 
In the form of a personal account, it could be defined as.

Debit- What goes out
Credit - Which comes in


The receiver's account is debited and
The giver's account is credited.

But in a real account 

Debit- that comes in
Credit- That Goes out


Nominate Account


Expenses and losses are debited and
incomes and gains are credited.




Or in sort of explanation, you can explain it. as


First:

Debit what comes in,
Credit what goes out.


Second:


Debit all expenses and losses,
Credit all incomes and gains.


Third:

Debit the Receiver,
Credit the giver.




Financial Year- It's the date of the company's financial purpose, as a company work from 1st April to 31 march is considered as financial year by the commercial approved department worldwide.



Book begging date-  The date from which the company starts its work.






What is the Balance sheet?

The Balance Sheet is a statement of financial affairs of a company on a given date. It lists out the Assets and Liabilities based on the Primary Groups in the Tally.ERP 9. The Balance Sheet in Tally. ERP 9 is updated instantly with every transaction voucher that is entered and saved.


There are two sides to balance sheets

The left side is Liabilities and the right side is Assents.

It shows the transaction report of a whole financial year.

The grand total of liabilities and assets will be equal.


Liabilities                                                               


Capital, Loan, Current liabilities,                    
Provisions                                                                      
Profit and Loss(Profit)                                           
                                                                                               
Sundry Creditor                                                          

 Assets

Fix assets

Bank Accounts

Cash in hand, Stock in hand, 

Loans and advance assets(assets)

Sundry debtor




What is the Trial balance?

Trial Balance is a statement summarizing the closing balance of all the ledger accounts, prepared with the view to verify the arithmetical accuracy of ledger posting. In Trial balance, all the ledger balances are posted either on the debit side or credit side of the statement.


1-    A grand total of Credit and Debit is equal

2-     Two sides of the trial balance are debit and credit.

3-     Trial balance shows the report of monthly, weekly, and yearly.
.

Debit                                                                                                         
  • All Assets (Cash in hand, Cash at Bank, Inventory, Land and Building, Plant and Machinery, etc.)
  • Sundry Debtors
  • Expenses (Carriage Inward, Freight, Rents, rebates and rates, Salary, Commission, etc.)
  • Purchases
  • Losses (Depreciation, Return inwards, Profit and loss A/c (Dr.), Bad debts, etc.)

   Credit
  • All liabilities (Bank Overdraft, Secured and unsecured loans, bills payable, Outstanding Payables or expenses, Loan on the mortgage, etc.)







Difference between the Balance Sheet and Trial Balance



The main difference between the trial balance and a balance sheet is that the trial balance lists the ending balance for every account, while the balance sheet may aggregate many ending account balances into each line item.

The balance sheet is part of the core group of financial statements. It may be issued only for internal use, or it may also be intended for such outsiders as lenders and investors. The balance sheet summarizes the recorded amount of assets, liabilities, and shareholders' equity in a company's accounting records as of a specific point in time (usually as of the end of a month). It is constructed based on the accounting standards described in one of the accounting frameworks, such as Generally Accepted Accounting Principles or International Financial Reporting Standards.

The trial balance is a standard report in most accounting software that lists the ending balance in every account as of a specific point in time (again, usually as of month-end). The report is only used within the accounting department and as a source document by a company's auditors. This report has multiple uses:

  • To verify that the total dollar amount of debits equals the total dollar amount of credits

  • For use in constructing a working trial balance that includes adjusting entries

  • For use in constructing a balance sheet and income statement, if there is no accounting software to do so automatically

  • For use by auditors to obtain the ending balances in accounts

Thus, the differences between a trial balance and balance sheet are as follows:

  • Aggregation. The balance sheet aggregates multiple accounts, while the trial balance presents information at the account level (and is, therefore, more detailed).

  • Standards. The balance sheet is structured in accordance with specific accounting standards, while there is no mandated format for a trial balance.

  • Usage. The balance sheet is intended for external use, while the trial balance is for use within the accounting department and by auditors.

  • Reporting level. The balance sheet is a final report, while the trial balance is used to construct other reports.

Vouchers in Tally:-

A voucher in Tally is a document having all the details of a financial transaction and is required for recording in the books of account. It helps in easy recording and modifying of records with many added functionalities needed for a business.

Types of vouchers in Tally-

1. Contra voucher (F4)-

This voucher is use to transfer the money from bank to bank, cash to bank, bank to cash.

2. payment voucher (F5)-

This voucher is use to pay the debits of the company to all parties, expenses and loans.

3. Receipt voucher (f6)- 

This voucher is use to receive the money from different parties or capital an sundry debtors or creditors.

4. Journal voucher (f7)-

This voucher is use to pay and receive any amount at the same entry of the journal voucher have by/ to or cr/dr.

5. Sales voucher (f8)-

This voucher is use to sale the goods from the stock to get the profit for the profit for the company.

6. Purchase voucher (F9)-  


This voucher is use to purchase the goods as stock of the company to get profit when it is sold in future.







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