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Accountancy vs.


The two words Accounting and

Accountancy are usually used to mean the
same thing, but is not correct.

 Accountancy is the main subject, while

accounting is one of its branch

Oct 17, 2008 Awais

 The words Accountancy is far extensive:
i.e. the scope of accountancy is far wide
than and extensive compared to

 The study of Accountancy covers the

following area like, Book keeping,
Accounting, Costing, Auditing &
Oct 17, 2008 Awais
Book Keeping

 Book keeping is a small part of


 Book keeping is just the recording of

transactions in a proper manner in the
books of account.

Oct 17, 2008 Awais

 Accounting is the art of recording
transactions, classifying, summarizing and
interpreting the results.

 Lets firstly discuss the art of recording


Oct 17, 2008 Awais


 Recording of Monetary Event is called


 To understand transaction, lets

understand / Discuss event.

Oct 17, 2008 Awais


 There are two types of events, which a

human being usually face through out
their lives and that is ?

5. Monetary Event
6. Non Monetary Event
Oct 17, 2008 Awais
Monetary Events
 Those events or situations or activities in
which money is involved.
 For example:

 A person pay to purchase or sells some

things, so situation like this which a person
face is called Monetary event.

 The same case is used in business

Oct 17, 2008 Awais
Non Monetary Events
 Those events or situation or activities in which
money are not involved like?
 For example

 Friends visits each others homes or meet with

each others, so these are the situations in which
money are not involved.
 In the organization non monetary events like,
Meetings, Interviewing etc
Oct 17, 2008 Awais
Recording of transaction
The transaction can be recorded by three
ways given below.

3. Single entry system

4. Double entry system
5. Compound entry system

Oct 17, 2008 Awais

Single Entry System
 Every transaction contains two aspects and
the system in which we record only one
aspect of the transaction is called single entry
 For example
 Ahmad paid 400 rupees to Said, so two
aspect of this transaction is Ahmad the payer
and said the receiver of the money.
 So in this transaction, we well record the
name of Ahmad Or Said, as a single aspect.
Oct 17, 2008 Awais
Double Entry system
 While in Double entry system, we record
both the aspect of a transaction and that is
debit and credit.

 For example

 Said will be debited and Ahmad will be

credited because Ahmad paid the cash to
Oct 17, 2008 Awais
Compound Entry System
 While in compound entry system a single
transaction affects different accounts like ?

 For example
 Ahmad purchased stationary, furniture's and

 So the car + stationary + furniture will be

debited and cash will be credited.
Oct 17, 2008 Awais
 General journal : A single day to day / journal
book in which all types of transactions is
recorded in a single book, is usually
maintained by small organizations, where the
number of transactions is small.

 Special Journal: Separate books is maintained

for transactions like sales, sales return,
purchases, purchase return, cash book and
petty cash book, is usually maintained by large
organization where the number of transaction
is large.
Oct 17, 2008 Awais
Ledger Book
 Ledger is a book is which separate
account is maintained for each head,
which are different in nature.

 General Ledger : A single book in which

all the data is posted from general journal
at the end of the day.

Oct 17, 2008 Awais

Special Ledger Book
 Sales Ledger Book
 Sales Return Ledger Book
 Purchase Ledger Book
 Purchase Return Ledger Book
 Cash Ledger Book

Oct 17, 2008 Awais