Revenue Accounts

When an entity sells services or products to customers, it records revenue. The point to be noted here is that revenue recognition is not dependent upon the receiving of cash. Revenue has to be recorded irrespective of the receiving of…

Equity Accounts

The interest of the owners in the assets of the entity is termed as equity. In the case of an entity going into liquidation, after paying for all sorts of creditors, shareholders are the persons who get the remaining assets…

Liability Accounts

Liability is the obligation of the entity which it needs to pay to settle its debts. When the obligations are settled, it results in the outflow of assets of the entity. Liabilities may be short-term and long-term. If liability is…

Assets Accounts

Assets in any item from which economic benefits could be derived by an entity. It is the property of the entity which can be converted into cash. It is estimated that assets will increase the firm value and will enhance…

Special Journals

Some accounting transactions are done repetitively and as a result, if we directly post these transactions into the general ledger, there will be increased chances of mistakes and complexity. In order to simplify that accounting process, we record such repetitive…

Subsidiary Ledgers

Subsidiary ledgers are the detailed register or records which provide details about the main general ledger. They are also called sub-ledgers. These subsidiary ledgers are very useful where the customers and suppliers are in big quantity. So, it becomes very…

Contra Account

The Contra account is the opposite of the normal account which is presented in the balance sheet. Normally, a contra account is created for an asset account such as provision for doubtful debt and allowance for depreciation. Both of these…

T – Account

In order to record the transaction in accounting, accountant needs a storage point. T – Account serves this purpose very well. T – Account saves all the debit and credit transaction in a chronological order. This helps a lot in…

Purchase Journal

Purchase journal is like a register which records all the credit purchases. In most of the businesses, entities buy-in raw material or other stock items on a credit line in order to manage the working capital cycle. So, these credit…

Financial Transaction

In conducting, numerous types of transactions take place on a daily basis. But, transactions which can only be described in monetary value are recorded in accounting system by passing a entry in the book which is called Journal. Any sort…