Book Keeping Pdf notes

Introduction to Book keeping

• Definition of terms: Book keeping, Accounting
• Differences between book keeping and accounting
• Functions of accounting
• Users of accounting information

Book keeping equation

• Assets, Liabilities and capital
• Application of book- keeping equation

Business transactions

• Types of business transactions: Cash transactions, Credit transaction
• Recording of transactions and their effects on assets and liabilities

Source documents and Subsidiary books/Day books/Books of original entry

• Sales invoice
• Purchases invoice
• Credit note
• Debit note
• Petty cash voucher
• Cash sale
• Cheque payment voucher
• Purchases journal
• Sales journal
• Returns outwards journal
• Returns inwards journal

Double entry system

• Ledger accounts
• Trial balance

Final accounts of Sole trader

• Income statement and statement of financial position

Cash book

• Two column cash book
• Three column cash book
• Petty cash book

Stock valuation methods

• IF.O
• I.FO
• Weighted Average Method
• Simple average method

Ratio analysis

• Meaning
• Uses of ratio
• Limitation of ratio
• Classification of ratios