Junior Assistant (Accounts) cheat sheet

Accounting equation: Assets = Liabilities + Capital (Owner's Equity); every transaction preserves this equality.

Going concern, accrual, consistency, prudence, and materiality are the key fundamental assumptions and qualitative characteristics.

Accrual basis: revenue is recognised when earned and expense when incurred, regardless of cash movement; cash basis recognises only on receipt/payment.

Capital expenditure creates or enhances a non-current asset and is capitalised; revenue expenditure is charged to the profit and loss account.

Depreciation methods: straight line = (Cost − Residual)/Useful life; reducing balance = fixed % on written-down value each year.

Trial balance totals agree but errors may still exist: errors of principle, compensating errors, complete omission, and errors of original entry.

Final accounts order: Trading Account (gross profit) → Profit and Loss Account (net profit) → Balance Sheet (position on a date).

Provision for doubtful debts is created on receivables and charged to P&L; it is a contra-asset shown deducted from debtors.

Golden rules: Debit the receiver, credit the giver (personal); debit what comes in, credit what goes out (real); debit expenses/losses, credit incomes/gains (nominal).

Every transaction has equal debits and credits; the journal is the book of original entry, the ledger the book of final entry.

Asset and expense accounts normally carry debit balances; liability, capital, and income accounts normally carry credit balances.

Contra entry affects two asset accounts, e.g. cash withdrawn from bank: debit Cash, credit Bank.

Suspense account is opened to balance a trial balance temporarily and closed once errors are located and rectified.

Bank reconciliation starts from the cash book or passbook balance and adjusts for cheques issued not presented, deposits not credited, bank charges, and direct debits.

Purchases returns go to a returns-outward book and are credited to the supplier's personal account; sales returns are the reverse.

Petty cash imprest system: the float is restored to a fixed amount by reimbursing exactly the vouchers paid.

Cheque validity in India is three months from the date of issue; a stale cheque is returned unpaid.

Crossing a cheque (two parallel lines) means it must be paid into a bank account; an account-payee crossing restricts it further.

A dishonoured cheque requires reversing the original receipt entry: debit the customer, credit the bank.

Stop payment instruction, post-dated cheques, and insufficient funds are common reasons for return of cheques.

Bank overdraft is a current liability shown on the balance sheet; it appears as a credit balance in the cash book.

Cash book with bank column is both a journal and a ledger; it records cash and bank transactions together.

KYC, AML, and PMLA obligations require banks to verify identity and report suspicious transactions.

Interest on savings and term deposits is credited by the bank; TDS applies on interest above the prescribed threshold.

Income tax slabs and rates are prescribed annually by the Finance Act; rebate under section 87A and standard deduction apply to eligible individuals.

TDS is deducted at source on salary, interest, rent, and professional fees; TCS is collected on specified sales.

Advance tax is payable in instalments by taxpayers whose liability exceeds the prescribed limit; interest under sections 234B and 234C applies on shortfall.

GST is a destination-based value-added tax with CGST+SGST on intra-state supply and IGST on inter-state supply.

GST input tax credit is available only on tax invoices and when the supplier has filed returns; blocked credits are listed in section 17(5).

GST returns: GSTR-1 (outward supplies), GSTR-3B (summary and payment), GSTR-9 (annual return).

Capital gains: short-term and long-term classification depends on the holding period; indexation applies only to specified assets.

Deductions under Chapter VI-A (80C, 80D, 80G) reduce gross total income but not all are available under the optional simplified regime.

Audit risk = inherent risk × control risk × detection risk; detection risk is the auditor's controllable component.

Internal control has five components: control environment, risk assessment, control activities, information and communication, and monitoring.

Segregation of duties, authorisation, physical safeguards, and reconciliation are core preventive controls.

Audit evidence is more reliable when obtained from independent external sources and from the auditor's own inspection.

Sampling risk arises from testing a sample; non-sampling risk arises from human error or inappropriate procedures.

An auditor expresses an opinion on the financial statements, not a guarantee of absolute accuracy or future viability.

Types of audit opinion: unmodified, qualified, adverse, and disclaimer of opinion.

Internal audit is an independent appraisal function within the entity; external audit is statutory and independent of management.

Prime cost = direct material + direct labour + direct expenses; factory cost adds factory overheads.

Cost of goods sold = opening stock + purchases + direct costs − closing stock.

Contribution = sales − variable cost; profit = contribution − fixed cost; P/V ratio = contribution/sales × 100.

Break-even point (units) = fixed cost / contribution per unit; BEP in value = fixed cost / P/V ratio.

Margin of safety = actual sales − break-even sales; it measures the cushion before losses begin.

Standard costing variances: material price = (standard price − actual price) × actual quantity; material usage = (standard quantity − actual quantity) × standard price.

Absorption costing includes fixed overheads in product cost; marginal costing treats fixed overheads as period costs.

Relevant cost for decisions excludes sunk costs and includes opportunity cost; fixed costs are irrelevant unless they change.

Simple interest = P × R × T / 100; compound amount = P(1 + R/100)^n.

Percentage change = (new value − old value)/old value × 100.

Mean = sum of values / number of values; median is the middle value of ordered data; mode is the most frequent value.

Standard deviation is the square root of variance; variance = Σ(x − mean)² / n for a population.

Ratio and proportion: if a:b = c:d then ad = bc; partnership profits are shared in the agreed ratio.

Discount: net price = marked price × (1 − discount rate); successive discounts multiply, they do not add.

Time and work: if A finishes in x days and B in y days, together they finish in xy/(x + y) days.

Probability of an event = favourable outcomes / total equally likely outcomes; independent events multiply.

Spreadsheet cell reference: relative (A1) changes on copy, absolute ($A$1) stays fixed, mixed fixes one part.

Common spreadsheet functions: SUM, AVERAGE, IF, VLOOKUP, COUNTIF, and ROUND.

In Tally-style software, ledgers are created under groups; groups determine the nature of the account in reports.

Backup, password protection, and user-level access rights are essential controls over accounting software.

Data validation, audit trail, and period locking prevent unauthorised edits to posted vouchers.

ERP modules typically cover general ledger, accounts payable/receivable, inventory, payroll, and fixed assets.

A database stores data in tables with rows and records; SQL SELECT retrieves data using WHERE conditions.

Digital signatures and e-invoicing under GST are mandatory above prescribed turnover thresholds.

Active voice: subject performs the action; passive voice: object becomes subject with a form of 'be' plus past participle.

Common business letter parts: sender's address, date, reference, salutation, body, complimentary close, and signature.

Formal register avoids contractions, slang, and first-person familiarity in official correspondence.

Subject-verb agreement: singular subject takes singular verb; collective nouns usually take a singular verb.

Reported speech shifts tense back one step and adjusts pronouns and time expressions.

Email etiquette: clear subject line, one purpose per message, professional greeting, and proofreading before sending.

Commonly confused pairs: affect/effect, principal/principle, stationary/stationery, complement/compliment.

Minutes of a meeting record decisions and actions, not verbatim conversation.

Reserve Bank of India regulates monetary policy; its key tools include repo rate, reverse repo, CRR, and SLR.

Union Budget is presented annually by the Finance Minister; the Fiscal Responsibility and Budget Management Act governs fiscal discipline.

SEBI regulates securities markets; IRDAI regulates insurance; PFRDA regulates pensions.

GST Council is a constitutional body under Article 279A; the Finance Minister of the Union chairs it.

Comptroller and Auditor General audits government accounts and reports to Parliament.

Financial year in India runs 1 April to 31 March; the fiscal deficit is the gap between total expenditure and total receipts excluding borrowings.

NITI Aayog replaced the Planning Commission in 2015; it is a policy think tank, not a fund-allocating body.

Key international bodies: IMF (balance of payments support), World Bank (development finance), and WTO (trade rules).