Accounting explained
Accounting, explained with one shop's books.
Sixteen plain-language explainers that follow Sri Lakshmi Stores, a kirana in Mysuru, through one financial year — from the first journal entry to closing the books on 31 March.
Reference
Glossary A–Z
Short definitions of billing, GST and accounting terms, each linked to its full page.
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Journal Entry
What a journal entry is, the format with debit and credit columns, and six entries from a real shop year.
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Trial Balance
The list of every ledger balance that proves the books agree, with a full trial balance for a shop.
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Profit and Loss Statement
How a P&L turns sales and costs into gross and net profit, with a full statement for a shop.
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Balance Sheet
What a balance sheet shows, the format, and a complete balance sheet for a shop that balances.
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Double-Entry Bookkeeping
Why every transaction has two sides, the accounting equation, and a month of entries that keep it in balance.
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Golden Rules of Accounting
The three traditional rules for personal, real and nominal accounts, with examples from a shop.
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Debit and Credit
What debit and credit mean, the modern rules by account type, and why a bank statement looks back to front.
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Depreciation
Spreading the cost of equipment over its life: straight-line and written-down value, with a worked schedule.
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Bank Reconciliation
Matching your bank book with the bank statement: the format, the usual differences and a worked statement.
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Sundry Debtors and Creditors
Who owes you and whom you owe: ledgers, ageing, and how they show in the balance sheet.
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Cash Book
The book of cash and bank movements: single, double and triple column formats, with a worked page.
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Cost of Goods Sold
The cost of what you actually sold: the formula, a worked year and what goes into it.
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Gross Profit vs Net Profit
The two profits every shop should know, the formulas, and what each one tells you to fix.
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Working Capital
The money tied up in running the shop: the formula, the cash cycle and how to free cash.
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Inventory Valuation
How closing stock is valued: cost or net realisable value, FIFO and weighted average, with worked numbers.
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Year-End Closing
Closing the books on 31 March: the checklist, the closing entries and carrying balances into the new year.
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