Books and Accounts
Debit Balance of Profit and Loss Account
There are two sides to accounting: debit and credit. Profits & incomes are placed on the credit side (right). This is because we gain...
Credit Balance of Profit and Loss Account
Meaning and Definition
The income statement or Profit & Loss account is an essential financial statement that provides a summary of a firm's expenses, losses, incomes,...
Simple petty cash book
A petty cash book is just as its name suggests a book which is used for the purpose of recording small amounts of expenses...
What is a Revaluation Account?
Meaning, Example & Purpose
Revaluation means "reassessing the value of something". In the event of a change to the original partnership of a business, such...
Format of Balance Sheet
Meaning and Basics
It is a financial statement prepared by all types of businesses (sole proprietors, partners, enterprise, etc.) at a given date. The balance...
What is a Realisation Account?
Meaning, Example & Uses
"Realisation Account" is mostly used to determine the profit or loss on the realisation of assets and settlement of liabilities. It...
What is an Offset Account?
Offset Account
To understand an offset account it is important to understand the meaning of the word "Offset". It means, to show a consideration or...
What are Different Types of Ledgers?
Types of Ledgers
A ledger is a book where all ledger accounts are maintained in a summarized way. All accounts combined together make a ledger book. Predominantly...
What are Subsidiary Books?
Subsidiary Books of Account
Also known as books of original entry, special purpose books, special purpose subsidiary books, and subsidiary books of accounts are various...
What is Profit and Loss Appropriation Account?
Profit and Loss Appropriation Account
In case of a sole proprietorship, there is a single owner and any addition in the capital in form of net profit...
What are Final Accounts?
Final Accounts
As the name suggests they are the final accounts which are prepared at the last stage of an accounting cycle. Final accounts show...
What is a Contra Liability?
Contra Liability
A liability account would usually contain credit balance however at times to offset a liability a separate account is used which contains debit balance and...
What is an Income Statement?
Income Statement or Profit and Loss Account
An income statement is also known as a profit and loss account, statement of income or statement of...
What is a Balance Sheet?
Balance Sheet
Balance sheet is a financial statement which shows the net worth of a company at the end of a financial period. A Balance...
What are Balance Sheet Accounts?
Balance Sheet Accounts
While looking at a company's financials there are 2 types of general ledger accounts which are found, Income statement (a.k.a Profit and...
What is Adjusted Trial Balance?
Meaning and Definition
As we know, final accounts are prepared at the end of an accounting period, by that time ledger balances also change due...
What is Control Account?
Control Account
An account which has a balance equal to the total of its underlying subsidiary ledger accounts is called a Control Account. These are...
What are Sales and Purchase Ledger Control Accounts?
Sales and Purchase Ledger Control Account
Control accounts are the summarized form of their related subledgers. They are shown in the general ledger and act...
What is a Contra Account?
Contra Account
Contra account is an account which is used to reduce or offset the value of an associated account. It holds opposite sign for...
What is Chart of Accounts?
Chart of Accounts
Also known as COA, chart of accounts is a list of all accounts in a company's general ledger. They are the identified...
What is a Suspense Account?
Definition and Use
A suspense account is an account temporarily used in general ledger to carry doubtful amounts which can either be a payment or...
What is a Trial Balance?
Definition of Trial Balance in Accounting
As per the accounting cycle, preparing a trial balance is the next step after posting and balancing ledger accounts....
What is a Subledger?
Subledger
When a business is small there is only one general ledger that is maintained. As the size of the business increases, the number of...
What is a Ledger?
Ledger in Accounting
It is also known as the principal book of accounts as well as the book of final entry. It is a book...
What is a Journal?
Journal in Accounting
Journal is the primary book of accounting where daily records of business transactions are first recorded in chronological order, i.e. in the increasing...
What is Petty Cash Book?
Meaning and Definition
Petty Cash Book is an accounting book used for recording cash expenses which are small and of little value, for example, stamps,...
What is Cash Book?
Cash Book
A Cash Book is a type of subsidiary book where cash (or) bank receipts and cash (or) bank payments made during a period are...
What is Bills Payable Book?
Bills Payable Book
Also known as a B/P book, bills payable book is a subsidiary or secondary book of accounting where all bills of exchange,...
What is Bills Receivable Book?
Bills Receivable Book
Also known as a B/R book, bills receivable book is a subsidiary or secondary book of accounting, where all bills of exchange,...
What is Journal Proper?
Journal Proper or General Journal
Journal Proper is mainly used for original records of a transaction which due to their importance or rareness of occurrence...
What is Sales Return Book?
Sales Return or Returns Inward Book
When a business sends the ordered goods back to a vendor it is recorded in the sales return book....
What is Purchase Returns Book?
Purchase Returns or Returns Outward Book
At times it may be necessary to return few goods back to a supplier when an order is received, this...
What is a Sales Book?
Sales Book
Sales book records all credit sales made by a business. It is one of the secondary book of accounts and unlike cash sales...
What is a Purchase Book?
Purchase Book
It is also known as a Purchase journal, Invoice book or Purchase daybook. A purchase book is a special-purpose subsidiary book prepared by...
What are the Three Types of Accounts?
Overview and Meaning
Real, Personal, and Nominal Accounts
List of Examples - 3 Types of Accounts
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