Direct Expense and examples

Direct Expenses are expense which are directly involved in the production process in case of manufacturing or selling process in case of a trading business. While calculating cost of the goods sold or cost of production it is necessary to include all expenses directly attributable to putting the goods in a saleable condition.For Instance,When Goods are purchased the carriage inward on such purchases is sometimes payable by the buyer.He may also be required to pay freight,duty,clearing charges,dock dues,on imported goods.All these

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How to prepare a trial balance & it’s Format

Trial balance is a list of ledger accounts balances, showing debit balances and credit balances, separately on a certain date. Trial balance is only a statement not an account. As we learned, every transaction has equal debit and credit aspects so that the trial balance possesses equal debit and credit balances. Preparing trial balances monthly will help you to fix errors as soon as it happens. In Today’s computerized accounting environment the possibilities of trial balance error are very few. 

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Posting of Transactions In to Ledger

What Is a Ledger & Why Ledger ? In previous Lesson we have learned how the transactions are recorded in Journal.But there may be several transactions relating to one particular expenses, income. In a journal these transactions are appear in different pages . Suppose your Boss asking you ,what is the total travelling expenses for this month?. To find out these from a journal book is very difficult as the the transactions of this particular nature ( travelling expense) are scattered in to different pages of journal

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Journal Entry Example

Now You have learned What is a Jouranl, Types of Journals,What is journalising, to find out the Debit & credit aspects of a transaction. Let’s Do some Journal entry examples in this chapter. What is journalising? The process of recording of transactions in the books of accounts is called “Journalising”Journal is called primary books of  accounting.Journal records all daily transactions of a business in the order in which they occur. The recorded transaction in a journal book is called Journal entry. Rules

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Important terms in accounting

  Accounting is the art art of recording, classifying and summarizing of business transactions. In this part lets understand some important terms of accounting. What is Business Transaction Transactions are the buying and selling of goods and services.It doesn’t require much much explanation. Asset Assets are economic resources which are owned by a business.or in other words Assets are things of value owned by a business.Asset may have definite physical character for example, building machinery etc or may not have physical

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What is a ledger ?Types of Ledgers

What is a Ledger? A group of Account is known as a ledger.After the transactions have been recorded in the journal the accounts are prepared in this book.The Ledger is,therefore, a derived or secondary record.Its source of information is the book of original entry, that is journal. The ledger is considered to be the principal or main book of account. Broad Sub Division Of Ledger The Ledger is broadly divided into two: Personal Ledger Impersonal Ledger Personal accounts,that is accounts

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