Understand your accounts, build reliable bookkeeping routines and work through GST questions with clear examples and source-linked explanations.
Record an employee advance as a recoverable asset until the employee provides an approved expense settlement or returns the money. Debit Employee advances and credit bank or cash when funds are issued. On…
Read guide · 5 minWhen an employee pays a supported business cost personally, recognise the cost and the amount owed to that employee. Debit the appropriate expense or asset and credit Employee reimbursement payable. When…
Read guide · 5 minRecognise salary cost for employees’ services in the relevant period and record the unpaid obligation, even when bank payment will happen later. A payroll journal should distinguish gross salary, employee…
Read guide · 5 minRecord a qualifying business asset at its supported acquisition cost, including directly attributable installation costs needed to make it capable of operating as intended. Separate recoverable taxes and…
Read guide · 5 minA monthly depreciation entry normally debits depreciation expense, or another appropriate cost account, and credits accumulated depreciation. It allocates a depreciable asset’s supported amount over its…
Read guide · 5 minWhen a business asset is sold, remove its recorded cost and related accumulated depreciation, recognise the sale proceeds and record the resulting gain or loss. Separate any output tax from the amount used…
Read guide · 5 minWrite off an uncollectible receivable by crediting the customer balance and debiting bad-debt expense or an existing loss allowance, as appropriate under the applicable accounting framework. Identify the…
Read guide · 5 minWhen money is recovered after a receivable was written off, record the actual receipt against an appropriate recovery account or reinstate and clear the receivable through a controlled process. Link the…
Read guide · 5 minCreate a provision when the applicable recognition requirements establish a present obligation with a probable outflow and a reliable estimate. Debit the appropriate expense or asset cost and credit the…
Read guide · 5 minRecord stock lost through damage or theft by removing the supported inventory value and recognising the appropriate loss. First distinguish goods that are gone or unusable from goods that can still be sold…
Read guide · 5 minWhen a proprietor takes business goods for personal use, record the inventory reduction and charge the appropriate drawings account rather than an operating expense. Use the supported stock cost for the…
Read guide · 5 minRecord genuine free promotional samples by moving their supported stock cost into an appropriate promotion expense and reducing inventory. Review the related GST treatment separately. A sample issue should…
Read guide · 5 minFor a transfer between two bank accounts belonging to the same business, debit the receiving bank and credit the sending bank. The transfer changes where business money is held; it does not create sales,…
Read guide · 5 minWhen cash already belonging to the business is deposited into its bank account, debit Bank and credit Cash on hand. The deposit changes the location of money; it does not create another sale. Establish…
Read guide · 5 minA bank withdrawal for business cash use normally debits Cash on hand and credits Bank. The withdrawal itself is not an expense; the expense arises when cash is subsequently spent on a supported business…
Read guide · 5 minA cash-and-bank contra entry records a supported internal movement between the business’s own cash and bank accounts. Common examples are cash deposited into bank, cash withdrawn for office use and…
Read guide · 5 minA reversing entry cancels a selected prior-period adjusting entry at the start of the next period so the ordinary transaction workflow can proceed without duplicating the adjustment. It is often useful for…
Read guide · 5 minCorrect a wrong-account posting by comparing what was recorded with what should have been recorded, then posting only the supported difference or a controlled reversal and replacement. Preserve the original…
Read guide · 5 minClear a suspense account by identifying the underlying transaction and moving the amount to its supported final account. Keep the original receipt or error reference and evidence for the reclassification. A…
Read guide · 5 minPost opening balances from a verified closing trial balance at a defined migration date, with supporting customer, supplier, inventory and asset detail. The opening entry should reproduce the business’s…
Read guide · 5 minClosing stock reduces the cost of goods attributed to the period because goods still held have not yet been sold or consumed. Under a periodic approach, the closing-stock adjustment recognises the supported…
Read guide · 5 minAn internal transfer between branches of the same business moves resources within the entity. Record the sending and receiving effects through stock, bank or branch-current accounts as appropriate, and…
Read guide · 5 minWhen a foreign-currency payable is settled, compare the supported rupee carrying amount of the liability with the rupee amount paid for that currency. Record the resulting exchange difference separately…
Read guide · 5 minRecord a partner’s supported contribution in an LLP by debiting the cash, bank or other recognised resource received and crediting that partner’s contribution or capital account. Keep each partner’s balance…
Read guide · 5 min