ABSTRACT

Efficiency of Tushar’s business is quite good since gross profit ratio and

net profit Ratio are sufficiently higher than the norms set for similar type of

business enterprises. Generally, to check the arithmetic accuracy, of accounts,

Trial Balance is prepared at month !; intervals. In the present era of technology,

each business firm uses Tally-ERP 9 for accounting. So we can prepare trial

balance at any time. Though trial balance can be prepared anytime but it is

preferable to prepare it at the end of the accounting period to ensure the

arithmetic accuracy of all the accounts before the preparation of the financial

statements. It may be noted that Trial Balance is a statement and not an account.

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INTRODUCTION

Accounting is the process of identifying, measuring, recording, classifying, summarizing,

analysing and interpreting the financial transactions and communicating the results thereof to the

persons interested in such information. Accounting process involves the following sequential steps.

Transactions are recorded in the Journal under double entry system either by Traditional

Approach or by Accounting Equation Approach. All transaction are recorded on chronological order,

and supported by a note termed as narration. After recording the transactions in journal , recorded

entries are classified and grouped into by preparation of accounts. The book which contains all set of

accounts i.e., personal. real and nominal accounts is known as LEDGER It is also known as principal

books of account i n which balance of each account is determined . The next phase in the accounting

process is preparation of Trial Balance. After posting the accounts in the ledger, a statement is

prepared to show separately the debit and credit balances. Such a statement is known as the Trial

Balance. The objectives of preparing the Trial Balance all (i) to check the arithmetical accuracy of

book of account and (ii)to make a basis of preparing final accounts i.e., P & L NC and Balance Sheet.

Generally, to check the arithmetic accuracy, of accounts, Trial Balance is prepared at month !;

intervals. In the present era of technology, each business firm uses Tally-ERP 9 for accounting. So we

can prepare trial balance at any time. Though trial balance can be prepared anytime but it is preferable

to prepare it at the end of the accounting period to ensure the arithmetic accuracy of all the accounts

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before the preparation of the financial statements. It may be noted that Trial Balance is a statement

and not an account.

OBJECTIVE OF THE STUDY

The objectives of this project work are as follows .

i. To study the various stages in the accounting Process:

ii. To explain the procedure in the accounting process from transaction to Trial balance .

iii. To make known in detail about preparation of Trial balance.

METHODOLOGY:

Here all the data are collected from secondary data which have been collected from different

books and different website and journal. Externally those sources may include in the books, or

periodical, published report, etc. For the Complications of the projects, I have consulted the secondary

data. The data included various newspaper, Magazines, Journal different website. It is also included

the suggestions of our teachers.

COMPREHENSIVE PROBLEM

1. Tushar decided to start a computer business. For this purpose he built the first floor of his house

at a cost of Rs. 2,00,000 and invested “a further' sum of Rs. 3,50,0oo in this business : He want¢

to start with 12 computers -costing Rs. 40,000 each: He appr9ached ICICI Bank and secured

loan to the extent of 75% of the cost of computers. It was agreed that the loan will be repaid in

four" annual installments as follows.

At the end of I st year . Rs. 90000 + Rs. 36000 for interest

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 He started business on 1st April, 2016. On the same date he deposited Rs: 3,39, 000 in the bank.
He purchased computers and paid 25% of the value of computers from his bank and Rs. 3,60,000
out bank loan availed. He deposits Rs. 10000 for the electric connection with the electricity
board and also deposited Rs. 150000 with the VSNL for internet and telephone connections.
He spent Rs. 40000 for getting the computer cafe furnished and also spent Rs. 6000 in getting the
pamphlets printed. and distributed: All payments were to be made by cheques and all the receipts
were to be deposited in the bank on the same day.

At the end of the year, the result were :

Purrchase of computer stationery like floppy disks, CDs etc. Rs. 92,00
Revenue from fees received from students of computer classes Rs. 2,70,00
0
Revenue from sale of computer stationery · Rs. 01,60,00
Revenue on account of Internet facility Rs. 2,20,00
0
Wages paid to servant Rs. · 0 12,00
Electricity Charges Rs. 48,00
0
Telephone Charges Rs. 073,00
Entertainment Expense Rs. 7,000
0
General Expenses Rs. 5,20
0
He withdrew Rs. 5000 by cheque each month for his personal expenses and
duly paid the bank loan. You are required to:-
1. Journalize the above transaction arid post them into ledger and prepare a
trial balance.
2. Prepare a Profit and loss Account and a Balance Sheet taking into.
consideration that .a telephone bill of Rs. 6800 is yet to be paid.
3. Depreciate building by 5%, furniture by 20% and computer by 30%.
4. Calculate Profitability Ratios and comment on the efficiency of the business
if the norms set for Gross Profit Ratio and Net Profit Ratio is similar type of
Business enterprises are 60% and 25% respectively.

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INTRODUCTION OF THE PROJECT:
The project work is :
(i) to make accounting record of all the transactions from the very .start, o
business of Mr. Tushar;
(ii) to prepare the profit and loss account of the business to ascertain the net
profit for the period;
(iii) to prepare the Balance Sheet of the business to ascertain the financial
position; and
(iv) to assess the profitability on the basis of profitability rations.
The necessary data is provided and is used for the purpose of project work.

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CONCLUSION

Efficiency of Tushar’s business is quite good since gross profit ratio and
net profit Ratio are sufficiently higher than the norms set for similar type of
business enterprises.

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 BIBLIOGRAPHY
Books
 DOUBLE ENTRY BOOK- KEEPING
Author:
 C. Mohan Juneja
 J.S. Arora
 R.C Chawla
 P.C. Sahoo

Website

 www.wikipedia.final/account.com
 www.google.com

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 CONTENTS

Sl No

 Abstract
 Introduction
 Objective of the study
 Methodology
 Comprehensive Problem
 Journal
 Ledger
 Trial Balance
 Trading and Profit and Loss A/c
 Balance sheet
 Profitability ratios
 Conclusion
 Bibliography

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