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Accounting is part and parcel of our daily life. We are indulging in accounting activities in our everyday life. But we are unaware of it. For example, we go for marketing with say Rs. 1000/-. We buy different items, like fruits, vegetables, grocery items, stationery etc. When we come back home, we segregate all items, keep things in its respective places viz. vegetables in refrigerator, groceries and condiments in the kitchen, toiletries in the bathroom, stationeries in the study room and so on. Suppose we keep items in haphazardly, it would be challenging to trace them out easily and would be very irritative. Therefore, we keep each item on its concerned places. It is what about accountancy. Further, we make a note of each expenditure and summarize them to reach out the total amount spent on every month viz. for education, entertainment, medical, grocery, eating out etc.

The accounting is defined in the manner mentioned ibid. 

Accounting is both an art and science.

It is an art of recording, classifying and summarizing financial transactions in a systematic and significant manner.

We can read it deeply why accounting is an art and science too, why financial transactions are a core part of accountancy and so on.

Dear Students,

Identification of Revenue and Capital natured expenditure is essential for us. It is the base for many of the chapters in your Accountancy Syllabus. Let us understand these terms with several examples-

1. Capital Expenditure - You must have observed that some of the business expenditures give long term benefits to an organisation. Say, for example, purchasing a property, Patent rights or Automobiles, etc. Business reaps the benefit of these Assets purchased over several years. Does a Business have to buy Machinery, Land, Buildings, Trademarks, Furniture, Huge Electronic Equipment every year? The answer is "NO". A Fixed Asset purchased servers a business for many years. Thus, the purchase of Fixed Asset is a Capital Expenditure. Students, please note that Capital Expenditures are Presented in the Balance sheet.

2. Revenue Expenditure - Many business expenses have to be made multiple times in a year. These expenses comprise of purchasing Raw materials, Paying wages and salaries to the staff members, paying electricity bills, paying rent, expenditure towards freight, carriage, fuel, etc. This expenditure that is recurring in nature or has to be made almost every year are called Revenue expenses. Generally, these expenses appear in the Trading/ P&L Account.

I hope this makes the concept clear.

All the best!!!

The term Forfeiture of Shares refers to Cancellation of Shares by the Company. The company decides to cancel/forfeit the shares of a member/shareholder as, the shareholder must not have responded to the payment calls of the company. The company, however, has to give a fourteen days notice to the shareholder before going for the Forfeiture of shares.
It should be noted that the company does not refund the amount already paid by the shareholder in the earlier stages (say for example application money) in case of the Forfeiture of the shares held by that shareholder.
The following journal entry is passed during the Forfeiture:
Share Capital A/c......Dr.
     To Forfeited Shares A/c.
     To Share Allotment A/c.
     To Share Call A/c.
Here, the amount already paid by the shareholder say in Application Stage is also forfeited and goes to 'Forfeited Shares A/c'. The above example assumes that the concerned shareholder has not paid the allotment money and calls money.

ACCOUNTANCY- 3 GOLDEN RULES

PERSONAL AC

DEBIT the RECEIVER

CREDIT the GIVER

REAL AC

DEBIT what COMES IN

CREDIT what GOES OUT

NOMINAL AC

DEBIT all EXPENSES AND LOSSES

CREDIT all INCOME AND GAINS

Many times I have seen that students don't understand the basic accounting knowledge. Here I am not talking about the accounting principles or concepts. I am talking about the FUNDAMENTAL  knowledge behind accounting treatment. Such as-
1) Why are we preparing the accounts?
2) Why are these accounts necessary?
3) What benefit will one get after preparation of accounts?
4) What is Trading, Profit and loss account, the Balance sheet is actually?
Like these above, many more questions students still don't understand. They memorise the steps for calculating answers which are useful for getting marks in exams, but if you want to be a great, smart and successful accounting professional, you have to understand the STORY. Every single transaction speaks this story.
So, my first lesson to the students is, do not memorise the subject understand the story, and you will see the benefits of it for a very very long time.
I will try to provide my next lessons to the students with a great explanation of concepts and of course THE STORY.

1. Cash means  Paper money , coins , Money order etc

But, Cash Equivalent means Highly Liquidable Securities 

2. Cash has not any Time period . It is Demand Receipt 

But , Cash Equivalent Take some time to convert

into cash  (90days or less)

3 .Cash exmp: Cash n Bank Deposit

But Cash Equivalent exmp: Highly Liquidable - Marketable Security , Treasury Bills etc 

4 . Cash is not convert into cash anymore 

But , Cash Equivalents are Convert  into Cash ..