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Network A system of interconnected computers and computerized peripherals such as printers is called computer network. This interconnection among computers facilitates information sharing among them. Computers may connect to each other by either wired or wireless media. A computer network consists of a collection of computers, printers and other equipment that is connected together so that they can communicate with each other.  

Network application
A Network application is any application running on one host and provides a communication to another application running on a different host, the application may use an existing application layer protocols such as: HTTP(e.g. the Browser and web server), SMTP(e.g. the email-client). And may be the application does not use any existing protocols and depends on the socket programming to communicate to another application. So the web application is a type of the network applications. 
There are lots of advantages from build up a network, but the th…

Branches of Accounting and Account Groups

First we will understand about different Branches of Accounting: 
What is Accounting? definition, branches and functions - Business ...Branches of Accounting 
Accounting can be divided into several areas of activity. These can certainly overlap and they are often closely interrelated, but it's still useful to distinguish them, because accounting professionals tend to organize themselves around these various specialties.  
Financial Accounting 
Financial accounting is the periodic reporting of a company's financial position and the results of operations to external parties through financial statements, which ordinarily include the balance sheet (statement of financial condition), income statement (the profit and loss statement, or P&L), and statement of cash flows. A statement of changes in owners' equity is also often prepared. Financial statements are relied upon by suppliers of capital - e.g., shareholders, bondholders and banks - as well as customers, suppliers, government agencies and policymakers.  

In the preparation of financial statements strict compliance with Generally Accepted Accounting Principles, or U.S. GAAP. The primary source of GAAP is the rules published by the Financial Accounting Standards Board (FASB) and its predecessors; but GAAP also derives from the work done by the Securities and Exchange Commission (SEC) and the American Institute of Certified Public Accountants (AICPA), as well standard industry practices.  

Management Accounting 

Where financial accounting focuses on external users, management accounting emphasizes the preparation and analysis of accounting information within the organization. According to the Institute of Management Accountants, it includes several components to help drive economic value such as:  

• designing and evaluating business processes,  
• budgeting and forecasting,  
• implementing and monitoring internal controls, 
• analyzing, synthesizing and aggregating information 

A primary concern of management accounting is the allocation of costs; indeed, much of what now is considered management accounting used to be called cost accounting. Although a seemingly mundane pursuit, how to measure cost is critical, difficult and controversial. In recent years, management accountants have developed new approaches like activity-based costing (ABC) and target costing, but they continue to debate how best to provide and use cost information for management decision-making. 


Auditing is the examination and verification of company accounts and the firm's system of internal control. There is both external and internal auditing. External auditors are independent firms that inspect the accounts of an entity and render an opinion on whether its statements conform to GAAP and present fairly the financial position of the company and the results of operations. In large countries four huge firms known as the Big Four - Price water house Coopers, Deloitte Touche Tomatsu, Ernst & Young, and KPMG - dominate the auditing of large corporations and institutions. 
The external auditor's primary obligation is towards users of financial statements outside the organization. The internal auditor's primary responsibility is to company management. According to the Institute of Internal Auditors (IIA), the internal auditor evaluates the risks the organization faces with respect to governance, operations and information systems. Its mandate is to ensure:  
a) effective and efficient operations;  b) the reliability and integrity of financial and operational information;  c) safeguarding of assets;  d) Compliance with laws, regulations and contracts. 
Tax Accounting 
Financial accounting is determined by rules that seek to best portray the financial position and results of an entity. Tax accounting, in contrast, is based on laws enacted through a highly political legislative process. Tax accountants help entities minimize their tax payments. Within the corporation, they will also assist financial accountants with determining the accounting for income taxes for financial reporting purposes. 

Fund Accounting 
Fund accounting is used for nonprofit entities, including governments and not-for-profit corporations. Rather than seek to make a profit, governments and nonprofits deploy resources to achieve objectives. It is standard practice to distinguish between a general fund and special purpose funds. The general fund is used for day-to-day operations, like paying employees or buying supplies. Special funds are established for specific activities, like building a new wing of a hospital.  

Segregating resources this way helps the nonprofit maintain control of its resources and measure its success in achieving its various missions. 
The accounting rules for federal agencies are determined by the Federal Accounting Standards Advisory Board (FASAB), while at the state and local level the Governmental Accounting Standards Board (GASB) has authority. 

Forensic Accounting 

Finally, forensic accounting is the use of accounting in legal matters, including litigation support, investigation and dispute resolution. There are many kinds of forensic accounting engagements: bankruptcy, matrimonial divorce, falsifications and manipulations of accounts or inventories, and so forth. Forensic accountants give investigate and analyze financial evidence, give expert testimony in court and quantify damages.  

Two methods of tracking your accounting records are: 

1. Cash Based Accounting 2. Accrual Method of Accounting 
Cash Based Accounting: Most of us use the cash method to keep track of our personal financial activities. The cash method recognizes revenue when payment or cash is received and recognizes expenses when cash is paid out. For example, your personal checkbook record is based on the cash method. Expenses are recorded when cash is paid out and revenue is recorded when cash or check deposits are received. 

Accrual Accounting: 

The Accrual method of accounting requires that revenue be recognized and assigned to the accounting period in which it is earned. Similarly, expenses must be recognized and assigned to the accounting period in which they are incurred. 
The Accrual method relies on the principle of matching revenues and expenses. The expenses for a period should accurately match up with the costs of producing revenue for the period (Which may be monthly or yearly). 
In general there are two types of adjustment to be made at the end of accounting period. The first type of adjustment arises when more expense or revenue has been recorded than was actually incurred or earned during the accounting period. Example: The pre-payment of a 2 year insurance premium is of Rs1,20,000. The actual insurance expense for the year would be only Rs60,000. Therefore an adjusting entry at the end of the accounting period is necessary to show the correct amount of insurance expense for that period. 
Similarly, there may be revenue that was received but not actually earned during the accounting period. For example: the business may have been paid for services that will not actually be provided or earned until the next year. In this case, an adjusting entry at the end of the accounting period is made to defer, that is, to postpone the recognition of revenue to the period it is actually earned. 
The adjustment to both income and expense have been already clarified in the initial story section
The accounting system uses accounts to keep track of information. Here is a simple way to understand accounts. In your office, you usually keep a filing cabinet. IN this filing cabinet, you have multiple file folders. Each file folder gives information for a specific topic only. A chart of accounts is like a filing cabinet. Each account in this chart is like a file folder. Each Account keeps track of a specific topic only (such as money spent, earned, owned, or owed). Accounts are divided into several categories like Assets, Liabilities, Income, and Expense accounts. 
Account Groups are maintained to determine the hierarchy of Ledger Accounts which is helpful in determining and presenting meaningful and compliant reports. 
You can group the Ledger accounts under the required Groups at the time of creating the chart of accounts or you can alter them at any time.   
The Group behavior is classified into Non-Revenue or Revenue and more specifically into Assets, Liabilities, Income and Expenditure.  
Now we will have discussion on each account of the classified groups: 
Non-Revenue - Primary Group 
Capital Account: This records the Capital and Reserves of the company. The ledgers that belong to Capital Accounts are: Share Capital, Partners' Capital A/c, Proprietor's Capital Account and so on. 
Current (Assets): Current Assets record the assets that do not belong either to Bank Accounts (Current account, savings account, short term deposit accounts and so on) or to Cash-in-Hand sub-groups.  
This mostly consists of: 
Deposits (Asset): Fixed Deposits, Security Deposits or any deposit made by the company 
Loans & Advances (Asset): This records all loans given by the company and advances of a nontrading nature (example: advance against salaries) or even for purchase of Fixed Assets. We do not recommend you to open Advances to Suppliers’ account under this Group. For further details, please refer to the section on Common Errors. 
Stock-in-hand: This group contains accounts like Raw Materials, Work-in-Progress and Finished Goods. The balance control depends on whether you have selected Integrated Account-cum-inventory option while creating the company.  

• Integrated Accounts-cum-Inventory: This option has a significant effect on the Balance Sheet and Profit & Loss Account.  
• Non-integrated Accounts-cum-Inventory: If Integrated Account-cum-Inventory option is set to No, it ignores the inventory books figures and picks up manually entered closing stock balances from the ledger account created. This provides the facility to maintain accounts separately and inventory separately. 
• Sundry Debtors: For customer accounts refer to common and possible errors in grouping of accounts section. 

Current Liabilities 
Accounts like Outstanding Liabilities, Statutory Liabilities and other minor liabilities can be created directly under this group. Sub-groups under Current Liabilities are Duties and Taxes, Provisions and Sundry Creditors 
Duties and Taxes 
Duties and Taxes contain all tax accounts like VAT, CENVAT, Excise, Sales and other trade taxes and the total liability (or asset in case of advances paid) and the break-up of individual items. 


Accounts like Provision for Taxation, Provision for Depreciation and so on are recorded under Provisions. 
Sundry Creditors 
For trade creditors, refer to common and possible errors in grouping of accounts section. 


Group your investment accounts like Investment in Shares, Bonds, Govt. securities, long term Bank deposit accounts and so on. This allows you to view the total investments made by the company. 
Loans (Liability) 
Loans that a company has borrowed, typically long-terms loans. 
Secured Loans: Term loans or other long/medium term loans, which are obtained against security of some asset does not verify the existence of the security. Typical accounts are Debentures, Term Loans, and so on. 
Unsecured Loans: Loans obtained without any security. Example: Loans from Directors/partners or outside parties. 
Suspense Account 
In modern accounting, many large corporations use a Suspense Ledger to track the money paid or recovered, the nature of which is not yet known. The most common example is money paid for Traveling Advance whose details will be known only upon submission of the Travelling Allowance bill. Some companies may prefer to open such accounts under Suspense Account. 

Sales Account:
You can classify your sales accounts based on Tax slabs or type of sales. This also becomes a simple mechanism for preparation of Tax returns. 
• Domestic Sales • Export Sales 
Now under Domestic Sales open the following ledgers: 
• Sales (10%) 
• Sales (5%) 
• Sales (exempt) 

You can even open an account as Sales Returns under the group Domestic Sales to view your net sales after returns (or the returns may be directly passed through Journal against the specific Sales account). 
Note: Do not create customer accounts under this group. For more details, refer to common and possible errors in grouping of accounts section. 

Purchase Account:
This is similar to sales accounts, except for the type of transactions. 
Direct Income [Income Direct]: 
These are Non-trade income accounts that affect Gross Profit. All trade income accounts fall under Sales Accounts. You may also use this group for accounts like Servicing, Contract Charges that follow sales of equipment. 
For a professional services company, you may not use Sales Account group at all. Instead, open accounts like Professional Fees under this group. 
Indirect Income [Income Indirect]: 
These are miscellaneous non-sale income accounts. Example: Rent Received and Interest Received. 
Direct Expenses [Expenses Direct]: 
These are manufacturing or direct trading expenses. These accounts determine the Gross Profit of the company. 
Indirect Expenses [Expenses Indirect]: 
All administrative, selling or non-direct expenses. 
Profit & Loss Account is a reserved primary account in Tally.ERP 9. You can use this account to pass adjustment entries through journal vouchers. For example, transfer of profit or loss account to Capital or Reserve account. 
 Common and Possible Errors in Grouping and Account Classification
Debtor/Creditor classification 
Accounts of parties with whom your company is trading should be opened under any of the following groups (or sub-groups under them): 

• Sundry Debtors 
• Sundry Creditors 
• Branch/Divisions 

Sales and Purchase account groups are meant for revenue accounts and are reflected in the Profit & Loss Account. If you open party accounts under these groups, it becomes difficult to pass sales or purchase voucher transactions. 
For example, in a sales voucher transaction entry, you must debit an account, which can be sundry debtor, branch/division or even a sundry creditor. Moreover, other facilities like bill-wise allocation and tracking will not be available unless the accounts belong to one of these groups. 

Opening two accounts of the same party Tally.ERP 9 classifies debtors, creditors and branch/divisions for convenience. This helps you in the process of keeping the accounts of a particular group together during display and analysis. Thus you can pass both sales and purchase entries for a party account placed under Sundry Debtors. Use the classification depending on the most natural group for the party. 
For example, parties from whom you buy frequently can be placed under Sundry Creditors, as that is the natural place to look for their account. Tally.ERP 9 does not restrict the accounts from having obverse balances. Thus, a Sundry Debtor can have a credit balance depending on the state of his account. 
Therefore, you need not open two accounts for the same party - one under Sundry Debtors and another under Sundry Creditors. Tally.ERP 9 restricts opening of two identical ledger accounts. In such cases, you may decide to circumvent by marking one account as "A & Co - S/Dr" and another "A & Co - S/Cr". This will allow you to have two accounts of the same party under two groups, but you will lose the advantage of analyzing net position at a single instance. It is always better to maintain a single account to obtain best benefits. 
Expenditure items are entered under Liabilities group. For example, the expenditure item Rates & Taxes under the group Duties and Taxes. 
The group Duties and Taxes is specifically meant to handle taxation liabilities of your company. Rates & Taxes and other statutory expenses should be placed under Indirect Expenses. 
Simply adhering to the reserved groups may be sufficient for many organizations. For greater diversity, Tally.ERP 9 allows you to create your own groups, either as sub-groups or primary groups. Groups can be sub-classified to practically an unlimited level, giving you a virtual accounting tree. At the lowest level, of course, would be the ledger account 


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