CPT Chapter Accounting Process from Journal to Cash Book

CA CPT chapter “Accounting Process” makes simple the Double Entry System. It deals with the process of accounting from Journal to Trial Balance and includes preparation of Subsidiary Books and Cash Book.

With Sheela Warrier.Duration:6hrs 40min 

Notes

Few of Things covered by us :

Overview of Accounting Process
Debit & Credit
Journal
Ledger
Trial Balance
Subsidiary Books
Cash Book

Accounting Equation

Dual Aspect Concept
Assets = Liabilities
Assets = Liabilities + Capital
Assets - Liabilities = Capital
Assets - Liabilities = Capital + (Income - Expenses)
Assets and Expenses
Liabilities and Income

Rules of Debit and Credit

Increase in Assets are Debits
Decrease in Assets are Credits
Increase in Liabilities are Credits
Decrease in Liabilities are Debits
Increase in Expenses are Debits
Increase in Incomes are Credits

Goods Account ?

Goods purchased
Goods sold
Goods purchased and then returned
Goods sold and later returned

Traditional approach

Personal Accounts
Capital a/c, Drawings a/c, Bank a/c, Creditors, Debtors, Bills Payable, Bills Receivable

Real Accounts
Cash, Land & Building, Furniture, Car, Machinery

Nominal Accounts
Purchases, Sales, Rent, Salaries, Discount received & allowed, Interest income & expense

Traditional approach- Rules for Journalising

Personal Accounts: Debit the Receiver
: Credit the Giver
Real Accounts : Debit what comes in
: Credit what goes out
Nominal Accounts : Debit all Expenses and Losses
: Credit all Incomes and Gains

Journal

Journal is a Book of Original Entry
Chronological order
Date
Particulars
LF
Dr Cr
Narration

Some Special Accounts

Outstanding expense
Prepaid expense
Income earned but not received
Income received in advance

LEDGER

Book
Entire set of Accounts
Principal Book of Accounts
Two sides
Date, Particulars, JF, Amount

Trial Balance

What is a Trial Balance ?
When is it prepared ?
Why is it prepared ?
How is a Trial Balance prepared ?
Suspense account
Limitations of a Trial Balance

Trial Balance

Third phase of accounting process
A Statement
All ledger account balances
As on a date
Double entry
Arithmetical accuracy
Can be prepared anytime

Objectives of a Trial Balance

Arithmetical accuracy of books
Summary of all balances
Basis for preparation of final accounts

Methods of preparing a Trial Balance

Balance Method
Total Method
Total and Balance Method

CPT Exam Exposure

Take Quiz

Accounting Process:Capital,Revenue and ROE

Introduction to Accounting

 Show you appreciate by sharing!

CPT Chapter Redemption of Preference Shares and Issue of Debentures

CA CPT syllabus “Redemption of Preference Shares and Issue of Debentures” deals with how money is raised by companies other than through equity shares or loans from bank. Preference shares are issued by a company to owners of the company with preferential rights on payment of  dividend and payout at the time of liquidation. Debentures on the other hand, are borrowings or loan taken by companies from general public at a specified rate of interest. In this chapter we will learn the accounting entries for redemption of  preference shares and issue of debentures.

With Sheela Warrier.Duration:4hrs40min

Notes

Few things covered by us:

Company Accounts

What are Preference Shares ?
What is the meaning of Redemption ?
Companies Act and Redemption of Preference Shares
Accounting entries in different situations
Quiz
Summary

What are Preference Shares?

Preference Shares have preferential rights:
a) Payment of Dividend
b) Repayment of Capital
No voting powers
Fixed rate of dividend
Redeemable

What is Redemption ?

Pay back
Date of maturity
Premium or Par
Provisions of Companies Act
Availability of Funds

Companies Act

(Section 80, Companies Act 1956; Section 55, Companies Act 2013)
a) Only fully paid up Preference Shares can be redeemed
b) Preference Shares can be redeemed either:
i) Out of proceeds of a fresh issue of Shares or
ii) Out of profits available for distribution- Capital Redemption Reserve
c) Premium on redemption ----> Securities Premium/Profit & Loss a/c

Proceeds of Fresh Issue

Proceeds = FV of Preference Share Capital Redeemed
When shares are issued at par: Amount Received/Face Value of issue
When shares are issued at premium: Face Value
When shares are issued at discount: Amount Received

Issue of Debentures

What are Debentures ?
Shares vs Debentures
Features of Debentures
Types of Debentures
Accounting entries on issue & redemption of Debentures
Issue of Debentures as Collateral Security
Issue of Debentures for Consideration other than Cash
Discount on issue of Debentures
Interest on Debentures
Quiz

Why Debentures?

Company Needs funds? 500 Crs
Options:
Share Issue to Public
Bank Loan
Loan from Public

Fixed Denomination of Rs.100,1000,10000,
Also called Bonds

What are Debentues ?

A certificate representing Loan to company
Secured
Interest at fixed rate on specific dates
Interest is a Charge against profits
May be Listed on the stock exchange
Maybe issued at par, premium or discount
Repaid in cash, or Shares or other debentures

Types of Debentues

Secured and Unsecured Debentures
Fixed charge
Floating charge

Convertible and Non-Convertible Debentures
Redeemable and Irredeemable Debentures
Registered and Bearer Debentures
First Mortgage and Second Mortgage Debentures

Issue of Debentures

Debentures issued for cash
Debentures issued for consideration other than cash
Debentures issued as collateral

Accounting Principle

Issued either at par or premium or discount
Redemption either at par or premium or discount

Conservatism concept :
Provide for losses if anticipated
Profits to be booked only when earned

CPT Exam Exposure

Take Quiz

Company Accounts Introduction,Issue, Forfeiture and Re-issue of Shares

 Show you appreciate by sharing!

CA CPT Accounts Chapter 1 Accounting Introduction

CA CPT chapter “Accounting: An Introduction” deals with the meaning, scope and limitations of accounting; basic accounting concepts and principles. It includes a brief introduction to accounting standards.

With Sheela Warrier.Duration:3 hrs 09min 

Notes 

Few of things covered by us :

Introduction to Accounting

What is Accounting
Objectives of Accounting
Accounting concepts,principles & conventions
Accounting Standards
Accounting Policies
Measurement Principles
Relationship with other discipline
Limitations of accounting

Recording
Classifying
Summarizing
Significant manner
Monetary transactions and events
Interpreting the results
Communicating financial information
To take informed decisions

Objectives

1. Systematic recording of financial transactions
2. Ascertain the results of business operations
3. Ascertain the financial position
4. Communicate information
5. Ascertain solvency position

Users of Financial Statements

Owners
Mangement
Employees
Lenders
Suppliers
Customers
Govt agencies
Public

Subfields of Accounting

Financial Accounting
Management Accounting
Cost Accounting
Social Responsibility Accounting
Human Resource Accounting
Inflation Accounting

Relationship with other disciplines

Economics
Statistics
Law
Mathematics
Management

Business Entity Concept
Money Measurement Concept
Going Concern Concept
Periodicity Concept
Matching Concept
Accrual Concept
Cost Concept
Realisation Concept
Conservatism Concept
Dual Aspect
Consistency Concept
Materiality Concept

4 Main Qualitative Characteristics of FS

Understandability
Reliability
Relevance
Comparability

Other Qualitative Characteristics of FS

Faithful representation
Substance over form
Neutrality
Prudence
Completeness

Need for Accounting Standards

Many users of Financial Statements
Transparency , Reliability and Adequacy
Consistency and Comparability
Accounting Standards - Framework
Mandatory for Companies

What are Accounting Standards

Written policy documents
Issued by expert accounting body or government
To provide a set of standard accounting policies
Standard valuations norms
Lay down disclosure requirements
Thus ensure comparability

Accounting Standards
Deal with:
Recognition of transactions and events
Measurement
Presentation
Disclosure
Cannot override the law of the land

Accounting Standards in India

Framed by ASB
Under ICAI
32 Standards
AS 8 - withdrawn
AS 26

Accounting Policies “we decide”

Choice of a Policy would depend on 3 characteristics:
Prudence
Substance over Form
Materiality

Reasons for change on Accounting Policies

Policies to be applied consistently…..
Maybe changed only under the following circumstances:
Required by Statute
Compliance with Accounting Standards
More appropriate presentation of FS

Measurement Bases

4 Accepted Valuation Principles:
Historical cost - Actual cost
Current cost - Cost if acquired at present
Realisable value - The price if we sell the asset at present
Present value - Present value of future cash outflows

CPT Exam Exposure

Take Quiz

Accounting Process:Journal to Cash Book

 Show you appreciate by sharing!

CPT Chapter Company Accounts

CA CPT syllabus “Company Accounts” explains  the need for a company form of organization, its advantages and disadvantages, types of companies, what are shares, types of shares etc. It includes a brief discussion on the format of a Balance Sheet as per Companies Act 2013. This chapter also explains accounting entries on issue, forfeiture and reissue of shares. Shares are issued to raise equity capital, shares are forfeited when call money is not received and forfeited shares may reissued to make a net gain.

With Sheela Warrier.Duration:6hrs 1min

Notes

Few things covered by us:

Index

What is a Company ?
Types of Companies
Format of Financial Statements
Share Capital
Types of Shares

What is a Company

Business organization
Separate legal entity
Own name
Seal
Perpetual succession
Limited liability
Ownership and management

Control

Separate ownership and management
Transfer of shares
Books of account
Periodic audit
Right to information

Types of companies

Statutory company
Special Act
Comptroller and Auditor General of India
Ex- Food Corporation of India, National Highway Authority of India

Government company
51%
Subsidiary of Government company
Auditors are appointed by the CAG
Ex- Air India, NTPC

Foreign company
Place of business

Registered company
Companies Act 1956
Companies Act 2013

Subsidiary company
Controls the Board of Directors
50%
Subsidiary of a subsidiary
Subsidiary of foreign company
Holding company
Other company is subsidiary company
Ex- Tata Steel, TCS, Tata Motors are subsidiary of Tata Sons Ltd

Limited Liability Company
Liability limited to the unpaid amount on shares

Unlimited Liability Company
Liability not limited - (at time of liquidation)
Incorporated but unlimited liability
Private company
One lakh
Restriction on number of members
Restriction on transfer of shares

Flipkart Online Services Private Ltd

Public company
Not a Private Company
Five lakhs
Subsidiary of Public Company
No restriction on transfer of shares
Listed company

Accounts and Financial Statements
Schedule III to the Companies Act 2013
(previously Schedule VI to the Companies Act , 1956)

Part I - Balance Sheet

Part II - Profit and Loss a/c

Types of capital

Authorised capital
Issued capital
Subscribed capital
Called up capital
Paid up capital
Reserve share capital

Types of shares

Preference shares
Cumulative and non cumulative
Participating and non-participating
Redeemable and non-redeemable
Convertible and nonconvertible
Equity shares

Company

How are shares issued ?
Issue of shares for cash
At par
At premium
At discount
Oversubscription and Under subscription
Calls in arrear and Calls in advance
Accounting entries
Forfeiture and Reissue of Shares
Accounting entries
Issue of shares for consideration other than cash

Forfeiture of Shares

What is Forfeiture ?
When does Forfeiture of shares occur ?
Articles of Association - BOD
Due notice
No longer member of Company

Reissue of Forfeited Shares

Reissue may be at par, premium or discount
Discount on reissue cannot exceed the amount forfeited
Profit after reissue is transferred to Capital Reserve
Balance in Share Forfeited a/c is added to Share Capital

CPT Exam Exposure

Take Quiz

Redemption of Preference Share & Issue of Debentures

Partnership

 Show you appreciate by sharing!