Accounting

What is a profit and loss statement or Income Statement? Definition with Examples

Profit and Loss Statement Definition: Under financial accounting, “profit and loss account, statement of revenue or loss, financial performance statement, operating statement, earnings statement, statement of profit and loss, P&L statement, Income statement all this terms refers to Profit and Loss statement of the financial reports”. This statement shows the revenue and expenditures of a business …

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What is a Trial Balance? Definition, Examples and Limitations of bookkeeping

Trial Balance Definition: In Accounting, Trial balance is a consolidated list of all the general ledger accounts of the business. Debit balances of ledger accounts will be listed across debit column of trial balance. Whereas Credit balances of ledger accounts will be listed across credit column of trial balance. Information listed on this statement report is …

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What Is a General Ledger? Definition, Format and Example of General Ledger

General Ledger Definition: In a financial accounting, super set of accounts that summarize records of transactions occurred during a specified period for a business or an organization is called as General Ledger Account. All the credit and debit balances of ledger account should be equal. This information is then used to prepare financial statement of …

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What are Journal Entries? Definition, Format and Examples of Journal Entry

In accounting system, Journal entry consists of transactions which are either a credit or debit transactions. Total of debit and credit journal entry transactions are unbalanced.  Journal entry can record unique or recurring transactions. Therefore, Journal entry transactions directly affect the balances of general ledger accounts. “Journal entry is a method of posting transactions into …

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Steps in Accounting Process / Accounting Cycle

“Accounting process is also referred as accounting cycle”. Traditional accounting methods are been changed in today’s accounting software. But still accounting process or accounting cycle remains the same irrespective of traditional or modern accounting methods. Steps in Accounting Process / Accounting Cycle: Here we will provide the detail explanation on accounting process steps / accounting cycle …

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What is Double Entry System? Definition with Examples of Bookkeeping System

Double Entry System Definition: In accounting, double entry system means every transaction requires corresponding opposite entry into another account. For example: Mr. David received Rs.5,000/- as income. In this scenario, two journal entries would look like this: debit Rs.5,000/- into cash a/c and credit Rs.5,000/- into income’s a/c. Debit and credit of journal entries are …

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What is a Single Entry System? Definition, Format, Problems and Example

Single Entry System Definition: A single entry system is a method of maintaining financial information thru one sided accounting entry. It method is also known as single-entry accounting system. Normally small businesses preferred to maintain single-entry bookkeeping system with records of minimum necessities. Single entry system example: such accounting system is pretty good to maintain records …

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Types of Accounts: Real, Personal and Nominal Accounts with Examples

There are credit and debit rules of accounting which is referred as 3 golden rules of accounting. It is also referred as 3 types of accounts in accounting. Here we will also see examples of real account, examples of nominal account as well as examples of personal account. Let us understand further in detail: Three …

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What is Revenue and Expenses? Definition with Accounting Examples

Revenue Definition: In financial accounting, an inflow of money usually from sales or services thru business activities is called as revenue. It is also known as sales or turnover of the business. In other words, an income to a business or an organisation is termed as revenue. For example: royalties or interest or copyright fees …

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What is Liability and Current Liabilities? Definition with Accounting Examples

Liability Definition: A legal agreement that arises in-front of an organization or a business or an individual to settle a debt is termed as liability. Or any sort of loans from persons or banks for enhancing a business or individual salary that is payable amid short or long duration is known as a liability. These …

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