Financial Accounting 2e

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Author(s): Baskar D, Charulatha V, Jaya M, Murugadoss

Product Code: vn58

Tags: Financial Accounting Accounting Book Financial Accounting Textbook Principles of Accounting Fundamentals of Accounting Accountancy Book

This book Financial Accounting, 2e is suitable for Under Graduate students of all universities. This book gives a clear and crisp explanation on the Principles and Practices of Financial Accounting.

Cover
Halftitle Page
Title Page
Copyright Page
Table of Contents
Preface
Chapter 1 Introduction
- Accounting
  - Definition of Accountancy
  - Attributes in Accounting
  - Advantages of Accounting
  - Limitations of Accounting
- Stakeholders Interested in Accounting Information
- Book Keeping
  - Objectives of Book Keeping
  - Book Keeping vs Accounting
- Branches of Accounting
  - Financial Accounting
  - Cost Accounting
  - Management Accounting
- Methods of Accounting
  - Single Entry System
  - Double Entry System
- Classification of Accounts
- Rules for Double Entry
  - Bases of Accounting
- Accounting Equation
- Accounting Concepts and Conventions
  - Accounting Concepts
  - Accounting Conventions
- Review Questions
Chapter 2 Journal and Ledger
- Journal
  - Meaning of Journal
  - Advantages of Journal Entries
  - Points to be Observed while Passing Journal Entries
- Ledger
  - Characteristics of Ledger
  - Proforma of a Ledger
  - Posting
  - Model Journal Entry for Posting from Journal to Ledger
  - Steps for Balancing of Ledger Accounts
- Illustrations
- Review Questions
- Exercises
Chapter 3 Trial Balance
- Introduction
- Main Characteristics and Uses of a Trial Balance
- Objectives of Preparing a Trial Balance
- Methods of Preparation of Trial Balance
  - Total Method
  - Balance Method
- Schedule of Debtors and Creditors
- Advantages of a Trial Balance
- Illustrations
- Review Questions
- Exercises
Chapter 4 Rectification of Errors
- Introduction
- Based on Nature
  - Errors of Omission
  - Errors of Commission
  - Errors of Principle
  - Compensating Errors
- Based on the Impact on Trial Balance
  - Errors Not Disclosed by Trial Balance
  - Errors Disclosed by Trial Balance
- Based on Accounts Criterion
  - Single Sided Errors
  - Double Sided Errors
- Suspense Account
- Basic Principles for Rectification of Errors
- Illustrations
- Review Questions
- Exercises
Chapter 5 Subsidiary Book
- Introduction
- Advantages of Subsidiary Book
- Basic Documents for Subsidiary Books
- Kinds of Subsidiary Books
  - Purchases Book
  - Sales Book
  - Purchases Returns Book
  - Sales Returns Book
  - Bills Receivable Book
  - Bills Payable Book
  - Journal Proper
  - Cash Book
- Illustrations
- Review Questions
- Exercises
Chapter 6 Cash Book
- Introduction
- Characteristics of a Cash Book
- Advantages
- Types of Cash Book
  - Single Column Cash Book or Simple Cash Book
  - Double Column Cash Book or Two Column Cash Book
  - Triple Column Cash Book or Three Column Cash Book
  - Analytical Petty Cash Book
- Imprest System
  - Benefits of Petty Cash Book
  - Posting of Entries from Petty Cash Book
- Illustrations
- Review Questions
- Exercises
Chapter 7 Final Accounts
- Introduction
- Objectives in the Preparation of Final Accounts
- Stages in Preparation of Final Accounts
  - Manufacturing Account
  - Trading Account
  - Profit and Loss Account
  - Balance Sheet
- Grouping and Marshalling of Assets and Liabilities
- Final Accounts with Adjustment
  - Closing Stock
  - Expenses Outstanding
  - Prepaid Expenses
  - Accrued Incomes
  - Income Received in Advance
  - Depreciation on Fixed Assets
  - Bad Debts
  - Provision for Bad and Doubtful Debts
  - Provision for Discount on Debtors
  - Provision for Discount on Creditors
  - Interest on Capital
  - Interest on Drawings
  - Other Adjustments
- Illustrations
- Review Questions
- Exercises
Chapter 8 Bills of Exchange
- Introduction
- Promissory Note
  - Features of a Promissory Note
  - Parties to a Promissory Note
- Bill of Exchange
  - Parties to a Bill of Exchange
- Distinction between Bills of Exchange and Promissory Note
- Specimen of Bills of Exchange
- Advantages of Bill of Exchange
- Important Terms
- Accounting Treatment of Bill Transactions
  - Bills Receivable
  - Bills Payable
- Illustrations
- Review Questions
- Exercises
Chapter 9 Average Due Date
- Why Average Due Date is Calculated or Significance of Average Due Date
- Uses of Average Due Date
- How to Calculate Due Date of a Transaction?
- Types of Problems
- Illustrations
- Review Questions
- Exercises
Chapter 10 Account Current
- Definition
- Calculation of Interest
  - Forward Method
  - Product Method
  - Backward or Epoque Method
  - Red-ink Interest
  - Daily Balance or Periodic Balance Method or Account Current by Means of Product of Balances
- Method of Preparation
  - How to Calculate Days between Transactions
- Distinction between Account Current and Current Account
  - Account Current
  - Current Account
- Illustrations
- Review Questions
- Exercises
Chapter 11 Depreciation Accounting
- Introduction
- Characteristics of Depreciation
- Factors/Causes of Depreciation
  - Wear and Tear
  - Effluxion of Time
  - Obsolescence
  - Disuse
  - Technical Growth
  - Depletion
- Factors Affecting the Calculation of Depreciation
- Need for Providing Depreciation
- Methods of Depreciation
  - Straight Line Method or Fixed Installment Method or Original Cost Method
  - Diminishing Balance Method or Reducing Installment Method or Written Down Value Method
  - Annuity Method
  - Depreciation Fund or Sinking Fund Method
  - Insurance Policy Method
  - Sum of Years Digit Method
  - Revaluation Method
  - Depletion Method
  - Machine Hour Rate Method
- Illustrations
- Review Questions
- Exercises
Chapter 12 Non-Trading Organisations
- Introduction
- Final Accounts of Non-profit Organisations
- Preparation of Financial Statements
  - Receipts & Payment Account
  - Income & Expenditure Account
- Treatment of Special Items of a Non-profit Organisation
  - Entrance / Admission Fee
  - Donations
  - Life Membership Fee
  - Subscriptions
  - Special Receipts
  - Legacy
  - Sale of Assets
  - Sale of Newspapers, Magazines and Sports Materials
  - Honorarium
  - Other Funds
- Treatment of Revenue Items in Income & Expenditure Account
- Illustrations
- Review Questions
- Exercises
Chapter 13 Bank Reconciliation Statement
- Introduction
- Meaning
- Definition
- Need for Bank Reconciliation Statement
- Reasons for Disagreement
- Steps for Preparation of Bank Reconciliation Statement
- Proforma of Bank Reconciliation Statement
- Analysis of Bank Reconciliation Statement
- Illustrations
- Review Questions
- Exercises
Chapter 14 Fire Insurance Claims
- Introduction
- Fire Insurance Claims
- Types of Fire Insurance Claims
  - Loss of Stocks and Assets
  - Loss of Profit
- Distinct Terms in Fire Insurance Claims
- Illustrations
- Review Questions
- Exercises
Chapter 15 Single Entry System or Accounts from Incomplete Records
- Meaning
- Definition
- Features
- Advantages
- Limitations
- Differences between Double Entry System and Single Entry System
- Process of Ascertainment of Profit
- Distinction between Statement of Affairs and Balance Sheet
- Steps Involved in Preparation of Final Accounts under Conversion Method from Incomplete Records
- Illustrations
- Review Questions
- Exercises
Chapter 16 Branch Accounting
- Introduction
- Objectives of Branch Accounts
- Categories of Branches
  - Inland or Domestic Branches
- Incorporation of Branch Trial Balance in Head Office Books
- Foreign Branches
- Illustrations
- Review Questions
- Exercises
Chapter 17 Departmental Accounting
- Introduction
- Departmental Accounting
  - Objectives of the Departmental Accounting
  - Advantages of Departmental Accounts
- Differences between Branch Accounting and Departmental Accounting
- Methods and Techniques
  - Interdepartmental Transactions
  - Journal Entry
  - Disclosure in Balance Sheet
- Illustrations
- Review Questions
- Exercises
Chapter 18 Hire Purchase System
- Introduction
- Hire Purchase
  - Special Features of this Hire Purchase Contract
  - Important Definitions of the Act
  - Differences between Sale and Hire Purchase
- Instalment Method
  - Features of Instalment Payment System
- Differences between Hire Purchase System and Instalment Purchase System
- Accounting for Hire Purchase
  - Calculation of Interest & Cash Price
- Termination of Hire Purchase Agreement before the Agreed Period of Instalments
  - Default and Repossession
  - Sale of Small Values of Goods and its Accounting Treatment
- Instalment System
  - Accounting of Instalment Purchase
- Illustrations
- Review Questions
- Exercises
Chapter 19 Partnership
- Introduction
- Partnership Deed
  - Meaning
  - Contents
  - Rules Applicable in the Absence of Partnership Deed
- Accounts of Partnership Firms
  - Adjustments to be Made to the Accounts
  - Partners Capital Accounts
- Other Points Relating to Partnership
  - Capital Ratio
  - Adjustment of Capital Accounts after Closing Accounts of the Firm
  - Cancellation of Excess Interest
  - Guarantee
- Illustrations
- Review Questions
- Exercises
Chapter 19A Reconstitution of Partnership by Admission of a Partner
- Introduction
- Admission of a New Partner
  - New Profit Sharing Ratio of the New Firm
  - Accounting Goodwill of the Existing Firm
  - Revaluation of Assets and Liabilities of the Firm
  - Capitalisation of Accumulated Profits and Losse