Topics
Introduction to Book-Keeping and Accountancy
- Accounting
- Book-Keeping
- Accountancy
- Book-Keeping vs. Accountancy
- Basis (Methods) of Accounting System
- Qualitative Characteristics of Accounting Information
- Basic Terms in Accounting
- Transaction
- Capital and Drawings
- Debtors, Creditors and Bad Debts
- Expenditure and Its Types
- Discount and Its Types
- Solvent Person vs. Insolvent Person
- Accounting Year
- Trading Concerns vs. Not for Profit Concerns
- Concept of Goodwill
- Fundamentals of Business Earnings
- Concepts of Assets, Liabilities and Net Worth
- Accounting Principles
- Accounting Concepts
- Core Accounting Concepts
- Accounting Standards
Meaning and Fundamentals of Double Entry Book-Keeping
Journal
- Accounting Documents
- Goods and Service Tax(GST)
- Types of Accounting Documents
- Voucher
- Tax Invoice (Under GST)
- Credit Memo
- Receipt
- Cheque
- Types of Cheques
- Books of Accounts
- Books of Accounts > Journal
- Journal Entries
- Journal Entries > Goods Account
- Journal Entries > Recording Discount in Journal
- Journal Entries > Other Important Journal Entries
Ledger
Subsidiary Books
- Concept of Subsidiary Books
- Cash Book
- Cash Book > Simple Cash Book (Single Column Cash Book)
- Cash Book > Two Column Cash Book (With Cash and Bank Columns)
- Cash Book > Petty Cash Book
- Simple Petty Cash Book
- Analytical Petty Cash Book
- Purchase Book
- Purchase Return Book
- Sales Book
- Sales Return Book
- Journal Proper
Bank Reconciliation Statement
- Accounting Documents Used in Banking
- Accounting Documents Used in Banking
- Pay-in-Slip
- Withdrawal Slip
- Bank Pass Book
- Bank Statement
- Bank Advice
- Concept of Virtual Banking
- Bank Reconciliation Statement(BRS)
- Cash Book vs Pass Book : Causes of Differences
- Time Difference(Regarding BRS)
- Errors and Omission Made by Bank or Businessman
- Formats of BRS
- Preparation of BRS
- Cash Book and Pass Book Comparison for Common Period
- Cash Book and Pass Book Balances for Different Periods
- Bank Balance as per Cash Book (Favourable / Debit Balance)
- Bank Balance as per Pass Book (Favourable / Credit Balance)
- Overdraft as per Cash Book (Unfavourable / Credit Balance)
- Overdraft as per Pass Book (Unfavourable/Debit balance)
- Reconciliation of Debtors and Creditors
Depreciation
Rectification of Errors
Final Accounts of a Proprietary Concern
Single Entry System
- Concept of Single Entry System
- Single Entry System vs. Double Entry System
- Parts of Single Entry System
- Statements of Affairs
- Statement of Profit or Loss
- Statement of Profit or Loss > Net Worth Method
- Practical Problems on Single Entry System
- Introduction
- Methods
- Real-Life Examples
- Key Takeaways
Maharashtra State Board: Class 11
Introduction
Have you ever wondered: Should you write down your pocket money when you get it, or when it’s promised? Which way is right? This is what the basis of accounting is all about!
What is “Basis of Accounting”?
It is the rule that decides when you record your income (money in) and expenses (money out) in your accounts.
Maharashtra State Board: Class 11
Basis(Methods) of Accounting System
| Category | Cash Basis | Accrual (Mercantile) Basis | Mixed/Hybrid Basis (Not Allowed in India) |
|---|---|---|---|
| Definition | Records income/expense when cash is received/paid | Records income when earned and expenses when incurred | Uses cash basis for income; accrual for expenses |
| When to Record? | When actual cash changes hands | When transaction occurs, even if cash isn’t exchanged | Income: when cash is received; Expense: when incurred |
| Recording Process | Entry only after receipt/payment of cash | Entry when event happens, regardless of cash flow | Entry: Cash for income; accrual for expenses |
| Accounts Used | Cash, Bank | Cash, Bank, Accounts Receivable/Payable, Accruals | Both cash and accrual accounts |
| Typical Users | Small businesses, professionals, NGOs | Most companies, businesses | Not permitted for businesses in India |
| Pros | Simple, easy; clear cash status | Accurate picture; matches revenue to expenses | Tries to combine benefits of both |
| Cons | May not show true profits/position | More complex; needs careful tracking | Not permitted in India |
Maharashtra State Board: Class 11
Real-Life Examples
| Method | Example of Income | When is Income Recorded? | Example of Expense | When is Expense Recorded? |
|---|---|---|---|---|
| Cash Basis | You get pocket money from parents | When you actually get the cash | Buy a pen with your own money | When you actually pay for the pen |
| Accrual Basis | Parents promise you allowance now | When the promise is made (even if cash comes later) | You owe a friend ₹10 for snacks | When you owe the money (even if paid later) |
| Mixed/Hybrid | You record gifts only on getting them | When cash/gift is received | You note expenses as soon as they happen (like phone bill) | When the bill is due |
Maharashtra State Board: Class 11
Key Takeaways
-
Cash Basis: Record only when money is received/paid.
-
Accrual Basis: Record when income becomes receivable and expenses become payable.
-
Mixed Basis: Combines both but is not allowed for Indian businesses.
