What is Promissory Notes There are three parties to a bill of exchange, namely, the drawer, the drawee and the payee, while in a promissory note there are only two parties - maker and payee.In a bill of exchange there is an unconditional order to pay, while in a promissory note there is an unconditional promise to pay. #WhatisPromissoryNotes

BILLS OF EXCHANGE AND PROMISSORY NOTES A bill of exchange is an unconditional written order made by the drawer on drawee to receive the specified sum within the mentioned period. Whereas, a promissory note is a written promise made by the borrower or drawer to repay the amount on a specific date or order of the payee. #BILLSOFEXCHANGEANDPROMISSORYNOTES

Method of Providing Depreciation The following are the various methods for providing depreciation: Straight Line or Fixed Percentage on Original Cost or Fixed Installment Method. Written Down Value or Fixed Percentage on Diminishing Balance or Reducing Installment Method. Insurance Policy Method. Sum of the Digits Method. Revaluation Method. #MethodofProvidingDepreciation

Factors affecting the amount of depreciation Measurement Factors for Calculating Depreciation. There are four main factors that affect the calculation of depreciation expense: asset cost, salvage value, useful life, and obsolescence #FactorsaffectingtheamountofdepreciationMeasurement

Concept of Depreciation Depreciation is an accounting method of allocating the cost of a tangible or physical asset over its useful life or life expectancy. Depreciation represents how much of an asset's value has been used up. ... For example, companies can take a tax deduction for the cost of the asset, meaning it reduces taxable income #ConceptofDepreciation

Introduction to ACCOUNTING OF DEPRECIATION Introduction to Depreciation Depreciation is an accounting concept through which businesses calculate the declining values of their assets over time. ... Depreciation is a method of accounting which is used by a business to calculate and allocate the declining costs of its tangible assets over their useful life. #IntroductiontoACCOUNTINGOFDEPRECIATION

Bank reconciliation Statement in case of overdraft Overdraft means overdrawing of a bank account. It is the nature of a loan granted by the bank. ... Hence, reverse steps would, of course, be taken while preparing Bank Reconciliation Statement. When there is an overdraft, the bank Pass Book shows a debit balance and the Bank Account in the Cash Book shows a credit balance. #BankreconciliationStatementincaseofoverdraft

Difference Between Error of Principle And Error of Omission Difference Between Error of Omission and Error of Commission. The error of omission refers to the error in which a transaction is not at all recorded in the books, either completely or partially. ... Errors of principle indicate the error of recording a transaction against the basic convention or principle of accounting #DifferenceBetweenErrorofPrincipleAndErrorofOmission

What is a SUSPENSE ACCOUNT? A suspense account is an account used temporarily or permanently to carry doubtful entries and discrepancies pending their analysis and permanent classification. It can be a repository for monetary transactions entered with invalid account numbers. The account specified may not exist, or it may be deleted/frozen. #WhatisaSUSPENSEACCOUNT

RECTIFICATION OF ERRORS Rectification means finding the error in the whole accounting process and correcting it by passing the rectified entry which will help you to make the corrections in the entry which are passed wrongly. The Rectification of errors can be done: ... After trial balance but before preparation of final accounts. #RECTIFICATIONOFERRORS

SALES RETURN BOOK OR RETURNS INWARD BOOK Return inward book is known as sales return book. Sales return book is a subsidiary book which records goods returned by the customers (i.e. debtors) and which had been sold on credit. Sales return book does not reco rd return of goods sold on cash basis nor does it record return of any assets sold. #SALESRETURNBOOKORRETURNSINWARDBOOK

SALES BOOK OR SALES JOURNAL The sales journal (also known as sales book and sales day book) is a special journal that is used to record all credit sales. Every transaction that is entered in sales journal essentially results in a debit to accounts receivable account and a credit to sales account. #SALESBOOKORSALESJOURNAL

INPUT GST Input Tax Credit means reducing the taxes paid on inputs from taxes to be paid on output. When any supply of services or goods is supplied to a taxable person, the GST charged is known as Input Tax. ... Input Tax Credit is also viable to a dealer who has purchased good to resale. #INPUTGST

PURCHASES BOOK OR PURCHASES JOURNAL Purchases journal (also known as purchases book and purchases day book) is a special journal used by businesses to record all credit purchases. All cash purchases are recorded in another special journal known as cash payment journal or cash disbursements journal. ... The invoice number for the goods purchased #PURCHASESBOOKORPURCHASESJOURNAL

Types of Petty Cash Book Columnar Petty Cash Book and its Preparation Process. ... Imprest Petty Cash Book. ... Labor minimization. ... Control over petty expenses. ... Verification of arithmetical accuracy of petty expenses. ... Opportunity for the petty cashier to work comfortably. ... Determination of expenses. ... Fixed imprest fund. #Whatispettycashbooks