Master Note of Accounting and Finance

Introduction Business uses cash book that records cash as well as bank transactions. A cash book is one of the type of subsidiary book (Day Book) that records original entry of all cash receipts and payments including bank deposits and withdrawals. Cash book has both debit and credit column representing cash and bank column hence it acts as a ledger account. Bank also records the transactions of customers. They keep all the deposits transaction in credit side and withdraws transactions in debit side of bank book.   Sometime bank as per cash book and cash as per bank book does not match. Hence it is necessary to reconcile it to fix the error of accounting. A bank reconciliation statement is a summary of banking and business activity that reconciles an entity's bank account with its financial records. Importance of Bank Reconciliation Statement Although, it is not necessary to prepare it and not fixed date to prepare it. It is only prepared due to the following reasons: To mat...

Introduction Inventory is one of the most visible and tangible aspects of doing business. Raw material, Goods in process or Work-in-Process and Finished goods all represents various forms of inventory. Each type represents money tied up until the inventory leaves the company as purchased products. Likewise, merchandise stocks in a wholesale or retail store contribute to profits only when their sale puts money into the cash register. In literate sense, inventory refers to stock of anything necessary to do business. These stocks represents a large portion of the business investment and must be well managed in order to maximize profits. Meaning and Nature of Inventory Every business organization needs inventory for smooth running of its activities. It serves as link between production and distribution processes. Inventory is the quantity of goods held by a merchandising company for resale to customers. Merchandising companies determine the quantity of investment items by a physical counts...

Meaning of Voucher Voucher can be any form. It is an evidence for business transaction. It just needs to act as evidence of a transaction not the look of it that matters. They are also called sources of document that help to identify the sources of transactions.  Accounting reports are taken as truthful financial information; hence all accounting records have to be based on facts and carefully supported by documentary proof. These documents, which provides the authenticity of happening of a transaction and event, are known as source documents. The following major sources of documents are listed as follows: Cash Memo: A seller creates cash memo and gives to buyer in the case of cash sales. Invoice or Credit Bill: A seller creates invoice usually for credit transaction with specific due date for payment. Receipts: It is a proof of document that state the details of financial transaction that received from sellers or creditors.   Payments: It is a proof of document t...

Meaning of Cash Book Cash book is one of the type of subsidiary book (Day Book) that records original entry of all cash receipts and payments including bank deposit and withdrawal.   There are various types of subsidiary books listed as follows: Cash Book Purchase Book Sales Book Purchase Return Book Sales Return Book Bills Receivable Book Bills Payable Book Journal Proper A cash book has both debit and credit hence it acts as a ledger account. Cash book has different types and used based on organizational requirements. They are: Single Column Cash Book: Under this type, only debit cash and credit cash columns are available. Double Column Cash Book: Under this type, both debit (cash and bank) and credit (cash and bank ) columns are available. Triple Column Cash Book : Under this type, both debit (cash and bank as well as discount) and credit (cash and Bank as well as discount) columns are available. *Contra entry refers to the transactions involving both cash and bank and having ...