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Guide for common accounting entries required in business
How to record Introduction of Capital?
How to record introduction of Capital in ProfitBooks?
How to make payment or receive money towards opening balance?
How to make payment or receive money towards opening balance? The opening balances for Customers or Vendors can be adjusted via Journal Vouchers. Kindly go to Accounting > Journal Voucher Window > Add New Record 1. Receiving money from customer against opening balance: When you receive money from your customer against the Opening Balance, you need to debit Cash / Bank Account and Credit the customer account. ![Receiving money from customer against the Opening Balance](https://s
How to record Journal Entries
Journal entry is the go-getter in Accounting. Anything and everything in Accounting or everyday-bookkeeping can be done through a Journal Voucher. To record a journal voucher, go to Accounting -> Journal Entries. Every journal entry should contain minimum 2 rows - one for debit and another for credit. Total should always match. Check out the example below: Let’s see some of t
How to Record Loan Transaction?
One of the most popular methods of financing is borrowing. Loans can be short term, long term, secured, or unsecured and should be recorded accordingly. It is important to keep track of the principle and interest amount, and record them respectively in books for correct accounting. Classification is vital as ‘interest’ paid on loan is an expense incurred to avail the loan, whereas principle repayment is nothing but repayment of the amount borrowed. Going by the golden rule of accounting for pe
How to record Secured Term Loan?
How to record Secured Term Loan? “ Term Loan” refers to the terms and conditions involved when borrowing money. This can include the loan's repayment period, the interest rate and fees associated with the loan, penalty fees borrowers might be charged, and any other special conditions that may apply. Under ProfitBooks to record term loan, follow the given steps: Step 1: Create a new account by clicking Accounting > Chart of account, click on Add New Account. Fill in the details like:
How to record Depreciation?
Depreciation on fixed asset: What is depreciation? The monetary value of an asset decreases over time due to use, wear and tear or obsolescence. This decrease is measured as depreciation. Machinery, equipment, currency are some examples of assets that are likely to depreciate over a specific period of time. **How to record depreciation in ProfitBooks? ** Step 1: Create depreciation and Fixed asset (For ex. furniture, machinery, etc.) account, from Accounting > Charts of account. Step 2
How to record Purchase of Fixed Assets?
Let's see how to record the purchase of Fixed Assets Step 1: You need to create an account for Fixed Assets through Accounting > Chart of Accounts Like shown in the above image, fill in the details : Account Name : Enter the name for the Fixed Asset Account Group : Select Fixed Asset from the drop down Effective Date : Select the date Opening Balance: Enter the opening balance (purcha
How to record repayment of Capital (Owner's Equity)?
The ordinary meaning of a repayment of capital is the return to a holder of capital (whether in the form of shares or other investments) of the whole or part of the amount that represented their capital investment. #How to record capital repayment? Firstly to record capital repayment user has to create accounts of Capital account, Bank account (In ProfitBooks these two accounts are already created in default user does not have to create again and can use these accounts). To create accounts
How to record salary?
A salary is a form of periodic payment from an employer to an employee, which may be specified in an employment contract. In ProfitBooks this can be done as a first step, create the Salary account. Go to Accounting > Chart of Accounts > New Account Salary account Fill in all the details : Enter the account name - Provide the name of new account head
How to record drawings from capital?
The total with which a trader starts the business is known as Capital. The proprietor may leave definite amounts from the business to meet personal expenditure or goods for personal use. It is called Drawings. A drawing account is a capital account. The Account for capital and cash/bank are default account in ProfitBooks user does not have to create them again and can use the same. For recording the drawings from the capital user hav
How to Record Bad debts and Bad Debts Recovered ?
Bad debt refers to loans or outstanding balances owed that are no longer deemed recoverable and must be written off. This expense is a cost of doing business with customers on credit, as there is always some default risk inherent with extending credit. In ProfitBooks this can be done as a first step, create the Bad debts and bad debts recovered account. For that Go to Accounting > Chart of Accounts > New Account. ![bad
How to record Fixed Deposits?
In ProfitBooks this can be done as a first step, create the Fixed Deposit account. Go to Accounting > Chart of Accounts > New Account Account Fill in all the details : Enter the account name - Provide the name of new account head in Name Select account group from the drop down - Select the corresponding group for new account head in Group drop do