"ACCOUNTING CYCLE Definition:-The Accounting Cycle is the Name Given to the Collective Process of Recording & processAccounting Events of A Company….Accounting Cycle Concept:-Recording Monetary Transactions In a Systematic MannerAccounting Cycle 6 Steps:-1.Analyse Business Transaction (Money Related Transactions)2.Prepare Journal Entries[Day to Day Transactions Journal Entries prepare ChronologicalOrder]3.posting Ledger Accounts[Separate Set of Accounts]4.Prepare Trading & profit & loss A/c[Income Statement-To Know Net profit or Net loss]5.Trail Balance[ Trial Balance is a Statement prepared by putting all debits on oneside and allcredits on the other-side to check the Arithematical Accuracy of the Ledger Balances..in otherWords in Simple Meaning : Trial Balance is a Connecting link between the Ledger Accountsand Final Accounts.6.Balance Sheet [Financial Position of Busiessman:-how many Assets having how much he haveto pay debt libaities]Note:-Students I prepare Accounts Cycle Concept with Smart Explanation please Check EntairDocment Easily you Answer BelowAccounts Cycle Concept Related Assignment..Assigment [Traial Balance Concept Related]From the Following balances of Mr.SundarPichai[Google Young Ceo] Prepare Trial Balance ason 31-12-2017..ParticularsUSD$ParticulasUSD$Capital1,00,000$ Interest realised 400$Debtors29,000$ Creditors12000$Bills Receivable 9,600$ Commision Received 1,200$Bills Payable 8,000$Drawings 10,000$Insurance 900 $Plant &Machinary25,000$Salaries3,000$ SalariesOut Standing 2,400$Purchases1 ,50,000$ Rent1,600$Advertisements1,100$ Stock50,000$Sales 1,80,000$ Bank Overdraft20,000$Returns outwards 16,000$ Return inward20,000$Carriage6,000$Printing 2,000$Investments 10,400$Cash in hand 10,000$Furniture 11,400$ Solution:-Trial Balance Total Amount:--3,40,000$both debit and Credit items should Be equal..2. Assigment [Ledger Concept]-Journalise the following transactions and post them into Ledger and Extract the balances.2017 March 1Captial brought into the business50,000$2017 March 4Sold Goods to Ajay12,000$2017 March 6Purchases from Sanjay10,000$2017 March 7 Sold Goods to paul for Cash 8,000$2017March 9Bought Goods From John 2,000$2017March 10 paid For Freight500$2017March 12 Cash Received From Richards5,000$2017March 15 Paid Salaries To Reddy 2500$2017March 18Loan Given to Ramarao1,000$2017 March 22 Sales 1500$2017 March 24 Rent 2000$Solutions:-Cash Account :-- Total :-64500$ Balance C/d:- 58,500$Capital Account:-Total :--50,000$ Balance b/d:-- 50,000$Ajay Account :-- Total :-12,000$ Balance b/d-12,000$Sales Account- Total:-21,500$Balance b/d:21500$Purchases Account Total :-12,000$ Balance b/d:-12,000$Sanjay Account:-Total:-10,000$ Balance b/d:-10,000$John Account: Total :-2000$Balance B/d:-2000$Freight Account:-Total :-500$Balance b/d:-500$Richards A/c:- Total :-5000$Balance B/D-5,000$Salaries A/c:-- Total:--2500$Balance b/d:2,500$Ramaro A/c:- Total :--1000$Balance b/d -1000$Rent A/C:-Total:-2,000$ Balance b/d:-2,000$ 3. Assignment [Trading & Income Statement & Balance Sheet Concept]Prepare Trading and the Incomestatement[Profit & Loss Account], Balance SheetofDell Company Pvt Lmtd From The Following Trial Balance as on 31-12-2017Trial balance as on 31-12-2017Particulars Debit Credit (USD$) (USD$)Debtors12,000$Creditors 6,900$Capital30,000$Drawings 2,900$Rent & Taxes 250$Sundry Expenses 670$Purchases 8,640$Sales14,290$Purchase Returns 280$Sales Returns 190$Carriage Inward250$Wages 1,920$Salaries 1,200$Stock(1-1-2017)3,100$Discount180$Bad Debts200$Plant and Machinary2,510$Furniture 1,800$Cash in Hand500$Cash at Bank15,400$--------------- ------------51,710$ 51,710$ -------------- --------------Closing Stock (31-12-2017) – USD $ 4,220Solution:--Gross Profit(Transfer to Profit and Loss A/c) :--4,690$Trading Account Total Amt:-18,320$To Net profit (Transfer to Capital A/c):-2,430$Income Statement Total Amount (profit and lossTotal Amount):-4930$Balance Sheet Total:-36,430$ Accounting Cycle Concept:-Definition:-The Accounting Cycle is the Name Given to the Collective Process of Recording & processAcccounting Events of A Company….Accounting Cycle Concept:-Recording Monetary Transactions In a Systematic MannerAccounting Cycle 6 Steps:-1.Analyse Business Transaction (Money Related Transactions)2.Prepare Journal Entries[Day to Day Transactions Journal Entries prepare ChronologicalOrder]3.posting Ledger Accounts[Separate Set of Accounts]4.Prepare Trading & profit & loss A/c[Income Statement-To Know Net profit or Net loss]5.Trail Balance[ Trial Balance is a Statement prepared by putting all debits on oneside and allcredits on the other-side to check the Arithematical Accuracy of the Ledger Balances..in otherWords in Simple Meaning : Trial Balance is a Connecting link between the Ledger Accountsand Final Accounts.6.Balance Sheet [Financial Position of Busiessman:-how many Assets having how much he haveto pay debt libaities]EXPLANATION:-1.Analayse Business Transaction:Real World Scenario:--Students In our Daily Life runs with Money.. With out money we cant live..Daily we Visit Super Market to Buy Home products purpose …Here buying and Selling Concept Exist In Super Market…Horlicks is the Famous kids liking foodproduct When we Interest To purchase Horlicks200 gms packet 100$ …Here Money Required to Purchase Horlicks Packet 200 gms 100$ when we go for Counter. Once we given Cash100$to super marketCounterCashier to Prepare Computerised Invoice Means Bill…Here Business Transactions Exist inMoney Related…Buying The Horlicks 200 gms 100$ to Give Cash 100$ to SupermarketCounterCashier to Prepare on spotGenerate Computerised Bill. Given to you… Business Transaction Analysisation:Real Account Golden Accounts Principle AppledDebit what Comes in[Horlicks 200 gms 100$]Credit What Goes out[cash]Customer End Product to Give Cash100$ regarding Horlicks 200gms100$ Packet purpose given Super Market Counter for invoicebill purpose…Business Transaction AnalysationHere Customer hand Cash Goes ouT. And Horlicks 200gms 100$ to receive Food. Producthere Horlicks 200 gms 100$ should be treated in Debited basis in Business Transaction cashCounter Receive Cash 100$to prepare Horlicks 200gms 100$Generate Computerised InvoiceBil to customer…SuperMarketCash Counter End Horlicks 200 Gms 100$ productHere Cashshould be treated in business Transaciton Credit basis..Entry:-Horlicks 200 gms@100$ A/c DrTo Cash(Being Customer Horlicks 200 Gms @ 100$Purchased Through Cash)----------------**********---------------------2.Prepare Journal Entries[Day to Day Transactions Journal Entries prepare ChronologicalOrder]Explanation:-Transaction :-Event(Money Related Transaction To Anaylise and To Prepare Journal Entries)Journal Entries:--Journal Entries Prepared In Chronological Order to prepare journal Entries Day to Business TransactionsEX:--Now a Youngster NeededLaptops one of the youngsters John to Visit Apple Store To Purchase laptop..To Approach Apple Store Sales Man to provide Laptop Details salesmanSaid AppleNote Cost is 25000$ its latest Product and having Latest Feature in 2017..johnInterested to Purchase Apple Note 25000$ john take laptop and Given to Laptop in AppleIstore Cash Counter..John to givencash 25000$ to Apple istore counter Cashier to prepare Invoice bill given to john and to taken invoice bill…Applenote take way by john..Explanation:-John to visit Apple store to purchase Apple Notepadto Approach Given cash to Apple storeCashier from Apple store Counter…Cash Should goes out John end..so cash should be treatedAs treated…Apple store counter to Receive Cash from John and provide a invoice GivenApplenote to john.Apple store Counter End AppleNote Goes out it should be treateddebit..Cash received from john so cash should be credit basis.. Journal Entry:-Applenote A/c Dr25,000$To Cash A/c 25,000$(Being John Purchased Applenote through Cash)---------------------------------------**************--------------------------------------3.posting Ledger Accounts[Separate Set of Accounts]Explanation:-Ledger Means Set of Accounts Once journal entries are prepared and transfer to ledger accountto get individual Report Values..Definition:-Ledger is a book which Facilitates recording all types of Transactions related to personal, real,Nominal Accounts Recorded in Book called Ledger..Advantage:-1.All Transactions Firm are Recorded in Journal as per their date of occurrence.2. Information related to Financial Status of Company IS available From leger3. Information available in the Ledger is also useful to some extent to prepare Financial budgetsof film..Types of Ledger:4 types of Ledgers They are1. Debtors Ledger:- When Customer Purchase Goods on Credit Basis from the BusinessConcern, They Become the debtors of the Firm. When all their accounts are recorded in onebook that book is known as debtor Ledger.2. Creditors Ledger:-When The Firm purchases Good on Credit Basis From The Suppliers, thesuppliers become creditors to firm. When all accounts of creditors are recorded in one bookthat Book is known as General Ledger.3.General Ledger:-The Business Firm Acquire Many Assets for successful Operation ofbusiness.similarly it makes different types of expenditure in process ofBusiness whn theCompany records assets,income and expenditure in one book, that book is known asGeneral Ledger.4.Self Ledger:-When All accounts Which indicate The Relationship between proprietor and the Business firm are recorded in one book that book is known as „Self Ledger? For EX:-captial A/cAnd Drawings A/c..Book of Final Entry:--AS ass types of Transactions are recorded only in the Form of Journal Entries in Journal, atGiven date the full information is not available of assets etc.. Which Shows the net results ofDifferent Account is book of Final Entry..What is an Account? Explain the Method of Balancing an accountAll Transactions related to Each aspect are recorded in these Statements and Balances of theseStatements are arrived at end. These Statements are Called Accounts.. Balancing of AccountGenerally the balances of Various accounts in the ledger are tallied at end of accounting year,It is necessary to balance that account of customer as below..1.Take down the Totals of Both sides on a piece of paper and find out the difference between Debit and credit total.2.Date of Balance should be written in the date Column.3.If the balance c/d is to be put on debit side, that should be written as “ To balance c/d”4.The balance c/d should be shown as balance b/d on next day on opposite side.5.Sometimes the totals of both the sides of an account may be the same.In such cases balance c/dor balance b/d does not occur..Posting:-All the debit and credit aspects which are recorded in Journal and transferred to respectiveAccounts in Ledger. This Process of transfer iscalled Posting..Proforma of an Account Name of the AcccountDate particulars j.f(Journal Folio)USD$DateparticularsJ.F. USD$Ex:-Journalise The Following Transactions,post them into Ledger and Extract the Business2017 April -1 Commenced Business with Cash -40,000$ Furniture-20,000$Stock- 5,000$2017 April-4Cash Sales -15,000$2017 April-4 Paid to Varma Bros- 4,000$2017 April-7 Commission Received -400$2017April-11 Deposited into Bank-15,000$2017 April-15Sold to sheshadri - 8,000$2017 April-18postage - 200$2017 April-22Purchased Furniture - 2,000$2017 April-24Received from Chandram - 1,500$2017-April-25Paid Salaries by cheque - 4,000$2017-April-28Electricity Charges - 1,000$2017-April-30 Propreitor?s Personal use- 2,000$2017-April-30 Withdrawn From Bank - 800$ Solution:-DateParticulars L.f.DebitCreditUSD$USD$st 2017 April-1Cash A/cDr 40,000$ Furniture A/C Dr 20,000$StockA/cDr 5,000$ To Capital A/c 65,000$ (Being Business Started With Some Assets)2017April-4 Cash A/c Dr 15,000$ To Sales A/c 15,000$(Being sold Goods For Cash)2017-April-4 Varma Bros A/cDr 4,000$ To Cash A/c 4,000$(Being cash Paid to Varma Bros)2017-April-5Cash A/cDr.8,000$ To Sales A/c 8,000$(Being sold Goods For Cash)2017- April-7Cash A/cDr.400$ To Commision 400$(Being Commission Received)2017- April-11 Bank A/cDr. 15,000$ To Cash A/c15,000$(Being Cash Deposited in to Bank)2017 –April-15Sheshadri A/cDr 8,000$To Sales A/c8,000$ (Being sold Goods on Credit)2017- April -18 Postage A/cDr 200$To Cash A/c200$ (Being Postage Expenses Paid)2017 – April- 22 FurnitureA/cDr 2,000$ To Cash 2,000$(Being Furniture Purchased For Cash)2017 – April -24 Cash A/cDr1500$To Chandram A/c1500$ (Being Cash Received From Chandram)2017 – April -25Salaries A/cDr4,000$ To Bank A/c4,000$ (Being Salaries Paid through Cheque)2017- April – 28ElectricityCharges A/cDr. 1,000$To Cash A/c1,000$(Being Electricity Charges Paid)20117 – April -30 Drawings A/cDr2,000$ To Cash A/c2,000$(Being Cash taken for Personal use)2017- April-30 Cash A/cDr.2,000$ToBank A/c2,000$(Being Cash With Drawn From Bank) Ledger EntriesDr. Cash A/cCr.DateParticularsj.f.USD$Date ParticularsJ.f.USD$2017 2017April-1To Capital A/c40,000$April-4 ByVarmaBross A/c 4,000$April-4 To Sales A/c 15,000$April-11 ByBank A/c15,000$April-5 To Sales A/c 8,000$ April-18 By Postage A/c 200$April-7To Commision A/c400$April-22 By Furniture A/c 2,000$April-24 To Chandram A/c1500$April-28 By Electricity Charges A/c 1,000$April-30 To Bank A/C 800$ April-30By Drawings A/c2,000$ April-30By Balance C/d41,500$ ----------- ------------- 65,700$ 65,700$-----------------------May -1 To Balanceb/d41,500$Dr.Capital A/cCr.DateParticularsj.f. USD $ DateParticulars J.f. USD$20172017st April-30To Balance C/d65,000$April-1 By Cash A/c40,000$ “ “ Furniture A/c20,000$““ Stock A/c 5,000$-----------------------65,000$65,000$ ------------------------st May-1 By Balance C/d 65,000$Dr.Furniture A/c Cr.Date particulars J.f.USD$ Dateparticularsj.f. USD$2017 2017April-1 To Capital A/c20,000$April-30By Balance C/d22,000$ “To Cash A/c 2,000$ -------------------------22,000$ 22,000$---------------------------st May-1To Balance B/d22,000$Dr. Stock A/cCr.Date Particulars J.f. USD$ DateParticulars J.f.USD$20172017th April-1To Capital A/c5,000$April-30By balance C/d 5,000$------------ -----------5,000$5,000$-----------------------May-1 To Balance b/d5,000$ Dr. Sales A/c Cr.DateparticularsJ.f. USD$DateParticulars j.f.USD$20172017April-30To Balance C/d 31,000$April-4 By Cash A/C 15,000$April-5 By Cash A/c 8,000$April-15 By Sheshadri A/c 8,000$ --------------------------- 31,000$ 31,000$------------- ------------- By Balance b/d31,000$Dr.Varma Bros A/CCr.DateParticulars J.f.USD$ Date particularsJ.f. USD$2017 2017April-4 To Cash A/c4,000$ April-30 By balance c/d 4,000$ --------------------------- 4,000$ 4,000$ --------------- --------------st May -1To Balance B/d--4,000$Dr.CommissionCr.Date particulars j.f.USD$ Date particularsj.f. Amount20172017th April-30To Balance C/d 400$ April-7 By Cash a/c400$ --------------------- 400$400$--------- ------------stMay-1 By Balance C/d400$ Dr. Bank A/cCr.Date particularsj.f. USD $Dateparticulars j.f.USD$2017 2017April-11To Cash A/c15,000$ April-25 By Salaries A/c 4,000$ April-30By Cash A/C 800$April-30By Balance c/d 10,200$----------------------15,000$ 15,000$ ------------- ----------st May-1To Balance b/d 10,200$Dr.Sheshadri A/cCr.Date Particularsj.f. USD$ DateParticularsJ.f.USD$20172017April-15 To Sales A/c 8,000$ April-30 By Balance C/d8,000$------------ ------------ 8.000$8,000$ ---------- ---------May-1To Balance b/d 8,000$ "