Accounting Knowledge

 The difference between the totals of two sides of an account is its balance. The balance is written of the lesser side to make the two sides equal.  For example: Total of Dr. Side Rs.20000 Total of Cr. Side Rs.15000 Balance Rs.5000 1. Balancing  The process of equalizing the two sides of an account is known as balancing. 2. Debit balance While finding the balance if total of debit side is greater than that of credit side, the difference is named as debit balance.  For example: Total of Dr. Side of an account Rs.80000 Total of Cr. Side of an account Rs.70000 Balance (Debit balance) Rs.10000 3. Credit balance While finding the balance if total of credit side is greater than that of debit side, the difference is named as credit balance. For example: Total of Dr. Side of an account Rs.35000 Total of Cr. Side of an account Rs.50000 Balance (Credit Balance) Rs.15000

 S.No Journal Ledger 1 Journal is the book of first entry ( original entry) Ledger is the book of second entry 2 Journal is the book for chronological record Ledger is the book for analytical record 3 The unit of classification of data within Journal is the transaction The unit of classification of data within Ledger is the account 4 The process of recording in Journal is called Journalizing or Journalization. The process of recording in Ledger is called posting  5 Journal as a book of source entry ordinarily has greater weight as legal evidence than the Ledger. Q. What is meant by Posting The process of recording information from journal to ledger is called posting.

As Muslim we have proof of Accounting from the Holy Quran. In The Quran Allah Said that  write and record debt and Business Transaction and also nominate persons as evidence of that Translations for future security.  Aian 282 and 283 of second Surah of Quran Al-Baqarah In Modern Accounting we apply this rules of Quran. Every Transaction we record along with documentary evidence. 2 nd caliph Umer bin Al-Kattab rules 13-23 hidri (634-644 A.D). The introduction and organization of Zakat in 624 A.D encouraged accounting for the purpose of Zakat calculation and payments. The Father of Accounting Luca Pacioli (1445-1520) Tuscany Italy Pacioli in 1494, for the first time described the system of double entry Book-Keeping. He also described the system of Debit and Credit. The word Debit is derived from Latin word Debere which means to owe. In  Modern Accounting  abbreviation Dr is used for Debit. on the other side word Credit is also derived from Latin word Credere which me