Ledger Trial Balance and BRS Test - 2

This equation is the base of accounting. This shows that the assets of the business is always equal to liability and capital .

Yes. Because when we deduct expense incurred from revenue earned we get net Income.

So, Net income = Revenue - Expenses

When a person wants to deposit cash or cheques in his bank account he customarily fills out a slip to show the number of his account, the date, and the details of the deposit. This works as a source document for the entity.

when owner withdrew business assets for personal use it is called Drawing. It will affect the Asset and Equity. Drawing made out of business will  decrease business assets and Equity but it will not affect liabilities of business.

when we made payment of expense it will reduce business cash or bank balance which is an asset. So, This will reduce Business Assets.

Invoice means a list of goods sent or services provided, with a statement of the sum due for these. 

Capital is an amount invested by owner. When owner introduced fresh capital again in business it will increase assets and capital amount.

 Fresh capital will increase cash or bank balance which is an asset and capital also get increase.

Cash Book records all transaction made in cash whether cash received or payment made. Cash book can be single columm (having only cash Balance) or Double Columm (having Cash or Bank columm) So there is no need to prepare Cash or Bank Account.

We prepare seprate books of credit transaction for purchase, sale , purchase return or sale return. So, when we return goods to the which are purchase on credit from supplier it will be recorded in purchase return book.

Assets are the property owned by business having monetary value. Assets can be in tangible assets or intangible assets.

 Example:- Cash, Bank, Stock, Debtors, Goodwill Etc.