Subdivision Of journal
From the above discussion it is clear that for a ledger business concern, one journal is not sufficient to record all business transactions and there should be...
Wednesday, 30 November 2016
Tuesday, 29 November 2016
Special Journals
Special Journals
In small business concern only one journal and one ledger may serve the purpose, because the number of transactions is very small. But in large business concerns...
Monday, 28 November 2016
Insolvency Of One Party
Insolvency Of One Party
When a person or a party is declared by a court as insolvent or bankrupt he is considered to be unable to pay his liabilities. It means, that bills accepted by him will be naturally dishonoured....
Sunday, 27 November 2016
Renewal Of A Bill
Renewal Of A Bill
Sometimes, the acceptor of a bill finds himself unable to meet his acceptance on the due date. So he may approach the drawer of the bill before the maturity date arrives, to cancel the...
Dishonour Of A Bill Of Exchange
Dishonour Of A Bill Of Exchange
We have discussed all options or possibilities in which a bill of exchange is presented to the acceptor on the due date and he readily honours it. Now let us see what happens when a bill is not honoured...
BILL SENT TO THE BANK
BILL SENT TO THE BANK
(Fourth option)
If a businessman has numerous bills that he got from various debtors he may send those bills to his banker for collection purpose. It should be remembered that, this is not discounting...
ENDORSEMENT OF BILL OF EXCHANGE
ENDORSEMENT OF BILL OF EXCHANGE
The drawer or holder of the bill may endorse (transfer) the bill in favour of his creditor for the clearance of his own debts. A bill of exchange is a "negotiable instrument" i.e. A document which is transferable by delivery without...
Discounting Of A Bill Of Exchange
Discounting Of A Bill Of Exchange
An Other Use Of Bill:
When the acceptor of the bill is a reputable person the bill is as good as money, and any bank will discount it.
If the drawer...
Saturday, 26 November 2016
Acceptance Of Bill Of Exchange
Acceptance Of Bill Of Exchange
Every bill has to be accepted by the drawee. After the drawer has prepared the draft, it is sent to the drawee for the acceptance. Acceptance is an indication on the part of the drawee that he is willing to accept...
Types of Bill of Exchange
Types of Bill of Exchange
The bills of exchange are classified on two different basics:
(1)On The Basis Of Period
(2) On The Basis Of Exchange
(1) Period
On the basis of period bills are of two types:
(a)...
how bill of exchange work
How a bill of Exchange Work?
How a Bill Of Exchange operate first we have to read the following points:
(1) A person who wants to purchase goods but he has no money, may agree to accept the bill of exchange drawn upon him at some future date for the value...
Accounting For Bill Of Exchange
ACCOUNTING FOR BILL OF EXCHANGE
No businessman wants to sell goods on credit to his customers who may prove unable or unwilling to pay their debts. Today, however, in every field of retail trade it appears that sales and profits can be increased by selling...
Thursday, 24 November 2016
Methods Of Preparing Trial Balance
Methods Of Preparing Trial Balance
There are three methods of preparing trail balance:
1.Total or Gross Trial Balance.
2.Balance or Net Trail Balance.
3.Total - cum - balance trail balance.
...
Trail Balance
Trial Balance
The fundamental principle of Double entry system is that at any stage , the total of Debits must be equal...
Tuesday, 22 November 2016
Balancing An Account Of Ledger
BALANCING AN ACCOUNT
The difference between the two sides of an account is its balance. The balance is written on the lesser side to make the two sides equal....
Posting Procedure
Posting Procedure
Here is the procedure of posting in the ledger account:
1. Locate the ledger account for the...
Standard Form Of Ledger Account
Standard Form Of Ledger Account
It appears that each account has got two similar sides-- the left hand is called debit side (briefly Dr.) and the right side is called credit side (briefly Cr).Now a days these two...
Monday, 21 November 2016
Ledger: The Main Books Of Accounts
Ledger The Main Books Of Account
The book in which accounts are maintained, is called Ledger. Generally, one account is open on one page of this book, but if transactions relating to a particular...
