Key to Principles of Accounting Book for I.Com Part 2 (class 12 | second year intermediate). Key to Principles of Accounting Book is written by Ch. Muhammad Hanif and Ch. Ijaz Ahmed. Encloses all solved subjective and objective exercises in 134 pages from the textbook Principles of Accounting I.Com Part 2.
Key to Principles of Accounting Book have nine chapters single entry system, accounts of non-trading concerns, consignment accounts, 4 chapters of partnership accounts, joint stock company accounts and depreciation accounts.
Principles of Accounting Book
Accounting and book keeping begins from the debit and credit. Debit and credits are the basics of accounting. Without this debit and credits nothing can be achieved in accounting. In simple words debit means spending and credit means revenue. Whenever an organization is making payments it means the organization is debiting some amount. Similarly when an organization is getting some revenue it’s said that the organization is getting credit. Both these debit and credit must be supported with the proper head of account. In accounting principles head of account plays crucial role with the payment or receipt in an organization.
It means segregating the payment and receipt according to accounting principles with relevant head of account. Typically when a payment is made by an organization it should be supported by a document that is called payment voucher. Similarly when a receipt is received in an organization it should be supported by a document that is called receipt. Payment vouchers are the basis for maintaining cash book. Cash book is the consolidated record for every payments made in the organization. Cash book is the source for maintaining general ledger. All revenue and payments in an organization should be included in the general ledger head of account wise.
General ledger is another essential document in accounting. Throughout the balances arrived in the general ledger trial balance is constructed. Trial balance is an excerpt of expenditures and receipts in an organization with relevant head of account wise. Typically trial balance has to be constructed every month. An annual trial balance has to be constructed towards the end of every financial year. Author Chinnasamy Krishnan has published more in detail on all important factors in accounting and booking in his website.