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Bank Reconciliation is the process of matching a company’s internal cash book records with the bank statement to identify any discrepancies. It ensures that all transactions are accurately recorded and that any errors or missing entries are corrected. This helps…

The Profit & Loss Appropriation Account is prepared after the Profit & Loss Account to show the final distribution of net profit among partners or shareholders. It is used in partnership firms and companies to record how the remaining profit…

Direct income refers to the revenue earned by the business through its core operations, such as selling goods or providing services. It is the main source of income for any trading or manufacturing business and contributes directly to the calculation…

Direct expenses are costs that are directly involved in the production, manufacturing, or procurement of goods for resale. These are the essential expenses incurred to make goods ready for sale or bring purchased goods to the business premises. Without incurring…

Sales refer to the total value of goods or services sold by a business during a specific accounting period. It is the main source of income for most businesses and plays a crucial role in calculating gross profit. Sales can…

Purchase refers to the total cost of goods or raw materials bought by a business during an accounting year, mainly for the purpose of resale or production. Purchases can be made in cash or on credit, and they are a…

Opening stock refers to the value of unsold goods, raw materials, or inventory a business holds at the beginning of an accounting year. It is carried forward from the closing stock of the previous year and is essential in determining…

Capital refers to the money or assets brought into the business by the owner to start or operate it. It represents the owner’s financial share or claim in the business and is treated as a liability from the business’s perspective,…

Drawback is the refund, reduction or waiver in whole or in part of customs duties assessed or collected upon importation of an article or materials which are subsequently exported. The Duty Drawback provisions are described under Section 74 and Section…