Bhagya

By going through these Maharashtra State Board Organisation of Commerce and Management 11th Notes Chapter 7 Business Environment students can recall all the concepts quickly.

Maharashtra State Board Organisation of Commerce and Management 11th Notes Chapter 7 Business Environment

Business Environment-

Definition:
Boyard O Wheeler
The total of all things external to firm and industries which affect their organization and operations is called as Business Environment”.

Barry M. Richman and Melvyan Copan
“Environment factors of constraints are largely if not totally external and beyond the control of individual enterprises and their arrangement”.

William F. Glueck
“Business Environment is the process by which strategists monitor the economic, governmental, market, supplier, technological, geographic and social settings to determine opportunities and threat to the firms.

Importance of Business Environment

1. Flexible and Dynamic
2. Opportunities and Threats
3. Competition
4. Utilization of Resources
5. Strength and Weakness
6. Knowledge
7. Image Building
8. Adaptability to Socio – Economic – Changes.

Dimention of Business Environment-

Business Environment:

1. Internal (Controllable)
2. External (Uncontrollable)

1. Internal (Controllable):

• Shareholders
• Managers
• Employees
• Unions

2. External (Uncontrollable)

Natural:

• Weather
• Topographical factors
• Location
• Land form
• Climate
• Soil
• Minerals

Social:

• Social aspect
• Trends
• Values
• Traditions

Political:

• Legislature
• Government
• Judiciary

Economic:

• Economic condition
• Economic policies
• Economic system

Technological:
Method & Techniques

Legal:

• Legal framework
• Laws

Dimension of Business Environment-

1. Internal (Controllable)
2. Other factors

Internal (Controllable):

• Value system
• Vision, Mission and Objectives
• Management Structure and Nature
• Internal Power Relationship
• Human Resources

Other factors:

• Physical Assets and Facilities
• Marketing Resources
• Financial Factors

Financial Factors-

Dimension in Business Environment

External (Uncontrollable) Factors:

Natural Environment:

• Weather
• Topographical factors
• Location
• Land form
• Climate
• Soil
• Minerals

Social Environment:

• Social aspect
• Social trends
• Social values
• Traditions

Political Environment:

• Legislature
• Government
• Judiciary

Economic Environment:
Condition:

1. Economic Condition
2. Economic Policies
3. Economic System:

• Capitalist Economy
• Socialist Economy
• Mixed Economy

Technology Environment:
Methods and Techniques

Legal Environment

• Legal frame work
• Laws

New Economic Policy and Business

• New Economic Policy And Business (24TH JULY, 1991)
• Known as (LPG Policy)
• Introduced on 24th July, 1991
  1. Liberalization
  2. Privatization
  3. Globalization

Liberalization-

Meaning: The process of eliminating unnecessary controls and restrictions for smooth functioning of business.

Indian Economic Liberalization Includes:

• Abolishing Industrial Licensing System
• Reduction in physical restrictions on import and import duties
• Reformation of financial system
• Reduction in taxation
• Reduction in control of foreign exchange
• Changing approach towards industrial sickness
• Freedom to decide the scale of business activities
• Attracting foreign investment
• Freedom in fixing prices of goods and services
• Opening of telecommunication sectors

Privatization-
Meaning : To reduce the involvement of state or public sectors by involving of private sector in economic activities.

Need for Privatization :

• More efficiency
• Less Political interference
• Reduction in labour problem
• Ensuring accountability
• Capital Market discipline

Privatization Includes-

• Reduction in number of industries reserved for public sector.
• In order to raise resource disinvestment of shares of selected public sector.
• Improvement in Performance through MOU system.

Globalisation-
Meaning : Integration of national economy and societies through cross country flows of information, ideas, technologies, goods securities, capital, finance and people.
Includes-

• Removing anti export biasness
• Minimization of high import tariffs
• Lesser reliance on quantitative restrictions on imports

Features of globalization-

• Buying and selling from/to any country
• Freedom to set business anywhere in the world
• Lesser distance between local and international market
• Exchange of new ideas and technology around the world
• Direct foreign participation

Impact of Globalisation-

1. Global agreement in trade
2. Spreading the economic policies
3. Physical and geographical% boundaries are reduced and world is as “global village”.
4. Customers are only concerned about the product – quality, price, design, value and appeal.
5. Created an economically interdependent international environment
6. Increased in privatization of manufacturing and service sector

Impact of New Economic policy on Business-

1. Budgetary Support
2. Increase in Competition
3. New Trade Policy
4. Demanding Customers
5. New For Development
6. Change in Technological Environment
7. Change in the Concept of Marketing

Word Meaning:

isolated – unreachable; relevant – appropriate / related; negotiates – work out; thrives – prosper / grow; survive – to stay on; disturbances – distraction / trouble; spell – amount to; threats – dangers; appraise – to judge; orientations – direction of something; demographic – related to structure of population; trends
– movement; strategies – planning; constraints – restrictions; beyond – extreme; overcoming – deal with; sensitivity – reactivity; analyze – to examine; formulate – to prepare; frontiers – limits; intimacy – relationship; controllable – influence; domain – area / sector; structure – formation; logistic – activity of transporting; preservation – to protect; non-replenishable – cannot be renewed; to cope with – to deal with; reciprocal – give and take; ethics – principles; expectancy – hope; heritage – tradition; mobility – ability to move; ideology
– ideas; survival – to exist/to live; monetary – in terms of money; dramatic – considerable; alert – aware; persist – to continue; amendments – changes; eliminating – to remove; accountability – responsibility; disinvestment – reduction in investment; interdependent – depend on each other; implication – indications; reliance – to be dependent; diminishing – reducing; tremendous – huge; discontinuation – not to continue; varying – differ; nurtured – to raise; restructuring – to rearrange; fundamentally – basics; reliable – to good; integration – combination.

By going through these Maharashtra State Board Bookkeeping and Accountancy 11th Notes Chapter 7 Depreciation students can recall all the concepts quickly.

Maharashtra State Board 11th Accounts Notes Chapter 7 Depreciation

Meaning And Definition of the Term Depreciation-

When fixed assets are used for producing goods and services of a business, their values are bound to decrease. Such reduction in the value of fixed assets due to their productive use is called depreciation. The word ‘depreciation’ is derived from the Latin word ‘depretium’ which means ‘decline’ or ‘reduction’ in value of a fixed asset due to its natural wear and tear or any other similar causes.

In the words of well-known author Carter, “Depreciation is a gradual, continuous and permanent decrease in the value of the asset from any cause whatsoever according to William Pickles, “Depreciation is the gradual and permanent decrease in the value of an asset from the cause.” The following illustration will make the above idea clear. If the computer costs you ₹ 35,000 when you purchase it.

After using it for two years, if you want to sell it away, you will not get ₹ 35,000 but much less than its original price. Such reduction or loss in price whatsoever takes place and in accounting, the terminology is known as depreciation. Depreciation is always charged on fixed assets. It is a part of operating expenses. It is a reduction in the value of assets due to their productive uses, and such reduction is gradual, continuous, and permanent. Depreciation A/c is a nominal account. Depreciation is always charged to Profit and Loss A/c at the end of the accounting year to arrive at a correct net profit or net loss of business. .

Causes of Depreciation-

Causes of depreciation are explained below:

• Natural wear and tear and antiquity: As a result of use of assets during the course of business, their value gets reduced every year. Value of fixed assets does not remain same due to natural wear and tear and antiquity.
• Passage of effluxion of time: Assets get depreciated due to effluxion of time hence it is necessary to
  depreciate them even if they are not in use.
• Obsolescence: On account of new inventions and technological development in asset or techniques of production, the old or existing assets become outdated, although they can be used. Such loss or reduction in the value of assets due to invention is called obsolescence.
• Natural calamities: Fall in the price of fixed asset may take place due to accidents like fire, earthquake, storm, cyclone, etc.
• Invention: When new machine or asset is invented, the earlier asset or machine in use may lose its utility and hence looses its value.
• Market value: The market price of an asset is also determined by its market demand and market supply. Market price of an asset goes on falling if its demand falls without corresponding fall in its supply.
• Depletion: To deplete means to empty. Depletion is also one of internal causes of decrease in value of wasting assets such as forests, oil wells, quarries, etc.

Need And Importance of Depreciation-

1. To ascertain true and correct profit and loss: Depreciation reduces value of assets. It is an expense of the business. This operating expense is charged to Profit and Loss Ac. Unless depreciation is written off to Profit & Loss Ac, profit or loss whichever is shown by P/L Ac will not give, correct result.

2. To present a true financial position of business: A1 types of assets belonging to business are listed
and shown on the asset side of the balance sheet. Balance Sheet shows correct and true financial position of a business if assets are shown by deducting depreciation from its original value.

3. Replacement of assets: Every asset used in business has specific life. At the end of its life that asset is required to be replaced by new asset. If depreciation fund is created and accumulated by charging it to Profit & Loss A/c every year, it enables the business to replace asset at due time.

4. To compute correct tax liability: When depreciation is charged to Profit & Loss A/c correctly along
with other business expenses and losses, it will give correct result of profit or loss. This enables business to compute and pay correct tax on taxable profit. It is necessary to charge depreciation to comply with the provisions made in Companies Act and Income Tax Act.

Factors Affecting Depreciation-

The factors affecting depreciation are stated as follows:

(i) Cost of an Assets: Cost of asset is one of the important factors required to be considered for computation of depreciation. Cost of asset refers to the purchase price of asset and its incidental or installation charges. In short Cost of Asset = Purchase price of asset + its incidental or installation charges. Incidental or installation charges refer to all those expenses incurred by business in connection with purchase of asset i.e. transportation cost, custom duty, octroi, brokerage, coolie charges, cost of fixing asset in factory, electrification charges, etc., e.g. a company purchased a machinery for ₹ 18,500/- and spent ₹1,500/- for erection of machinery. In this case cost of machinery is (18,500 + 1,500) ₹ 20,000/-. There is a direct relation between cost of asset and depreciation chargeable on that asset per year.

(ii) Residual Value (or Estimated Scrap Value): This is another important factor considered for computation of depreciation on asset. Total amount whatsoever received by selling used or obsolete asset or its spare parts is called residual value or scrap value, e.g. a company purchased a machinery for ₹ 20,000 and used it for 9 years. Then company sold it away for ₹ 3,000/-. Here residual value is ₹ 3,000/-.

(iii) Estimated Life of an Asset: The specific period for which fixed assets give useful services to the business organisation is called estimated life of an assets e.g. a machinery may be useful to the business say for 10 years. After 10 years its replacement is necessary to carry on business further. Usually life of the fixed assets is determined by the experts in the respective field. Depreciation is calculated by dividing net cost of asset by the estimated life of the asset.

Formula For Computation of Depreciation-

For computation of depreciation on fixed asset, following factors are considered viz. (a) cost of asset (b) estimated life of an asset and (c) residual value of asset i.e. scrap value.

(Where Cost of asset = Purchase price + Incidental charges.)
e.g. A Ltd. Co. purchased a machinery for ? 44,000/- and spent ? 1,000/- on its installation. Its estimated life is 10 years and its estimated residual value is ? 5,000/- work out depreciation chargeable per year.

Methods of Depreciation-

Depreciation on fixed asset may be charged by any one of the following given methods:

• Fixed Instalment Method
• Reducing Balance Method
• Annuity Method
• Depreciation Fund Method
• Insurance Policy Method
• Revaluation Method
• Machine Hour Rate Method etc.

(Only first two methods of depreciation are covered in this syllabus)

Fixed Instalment Method-

Meaning: This method of depreciation is also known as straight line method or original cost method or fixed percentage method of depreciation. This is one of the simplest method of depreciation. As name indicates, under this method depreciation at fixed percentage is computed on original cost of asset every year. According to this method, over a every full year period amount of depreciation and rate of depreciation remain same. This method of depreciation enables the business to spread depreciation evenly over a life period of asset.

Main features: Main features of fixed instalment method of depreciation are explained below :

• Depreciation is charged every year on original cost of asset.
• Amount of depreciation remains same over an every full year if there is no purchase or sale of assets.
• Rate of depreciation remains same every year.
• Amount of depreciation charged to Profit and Loss A/c remains identical during the economic life of the asset.

Advantages: Advantages of fixed instalment method of depreciation are as follows:

• It is simplest method of depreciation. Depreciation can be computed easily.
• Burden of depreciation amount spreads evenly over economic life of the assets.
• Book value of asset can be reduced to zero after its estimated useful life.
• If addition is made to existing assets with same life period, no separate calculations need to be made for ascertaining depreciation.

Disadvantages:

• If addition is made to existing assets which does not have same working life span, separate calculations for depreciation are required to be made for every new asset every time.
• In later life of asset, depreciation and repairs and renewal charges together give heavier burden on the business.
• This method of depreciation does not consider or take into account, interest chargeable on amount
  invested in asset while charging depreciation on asset.

Reducing Balance Method-

Meaning: This method of depreciation is also known as written down value method or diminishing balance method of depreciation. It is a method of depreciation in which depreciation is computed at a fixed rate not on original cost of asset but on reducing balance of asset appearing at the beginning of each year. Under this method of depreciation, amount of depreciation goes on reducing year after year, but rate of depreciation remains fixed and same.

Main features : Main features of reducing balance method of depreciation are as follows:

• Depreciation is charged every year on opening cost of asset that appears in the beginning of the every year.
• Rate of depreciation charged, every year remains fixed and same.
• Amount of depreciation goes on reducing year after year.

Advantages:

• Under this method of depreciation, Profit and Loss A/c is debited uniformly for depreciation and repair charges every year in the sense that in the beginning depreciation amount chargeable is higher and repairs and renewal charges are lower. But in the later life of asset depreciation amount comes down with increase in the cost of repairs and renewals of asset.
• Under this method depreciation is charged on balancing cost of asset every year. Therefore there is no need to calculate depreciation separately on additions, if any, made.
• This method of depreciation is acceptable by business community as well as income-tax authority as
  correct method of depreciation.

Disadvantages:

• As per this method of depreciation, interest on investment of asset made is altogether ignored while charging the depreciation.
• Value of asset cannot be brought down to zero even after its working life.
• If depreciation is considered for costing purpose, it costs higher in the beginning due to higher depreciation and in later life it costs lesser due to less amount of depreciation.

Illustrations: The following illustration will explain difference between fixed instalment method of depreciation and reducing balance method of depreciation. Let us presume that cost of machinery is ? 1,00,000/-. Rate of depreciation chargeable is 10% p.a.

Difference Between Fixed Instalment Method And Reducing Balance Method-

Fixed Instalment Method:

1. Meaning: Method of depreciation in which depreciation at fixed percentage (rate) is charged every year on original cost of fixed asset is called ‘Fixed Instalment Method’.
2. Amount of depreciation: Unless there is addition on or sale of fixed assets, the amount of depreciation remains same (constant) every year.
3. Suitability: This method of depreciation is easy to calculate and more suitable for the assets of small value and does not require to spent any amount on repairs and maintenance.
4. Acceptance of method: This method of depreciation is not accepted for income tax purposes.
5. Charge: Depreciation is charged on the original cost of asset every year.
6. Book value: After certain year book value of the asset becomes zero.

Reducing Balance Method:

1. Method of depreciation in which depreciation at fixed percentage (rate) is charged every year on opening cost of fixed asset is called ‘Reducing Balance Method’.
2. Unless there is any addition to or sale of fixed asset, the amount of depreciation goes on reducing every year.
3. This method of depreciation is difficult to calculate and more suitable for the assets of higher value having longer life requiring heavy expenditure in later life of assets.
4. This method of depreciation is accepted for calculation and payment of income tax.
5. Depreciation is charged on written down value of asset every year.
6. The book value of asset never becomes zero.

Accounting Treatment of Depreciation-

(A) Journal entries in the books of firm.

(B) Ledger Accounts in the books of firm

By going through these Maharashtra State Board Bookkeeping and Accountancy 11th Notes Chapter 3 Journal students can recall all the concepts quickly.

Maharashtra State Board 11th Accounts Notes Chapter 3 Journal

Introduction-

The businessman or accountant records all day-to-day business transactions in the books of account on the basis of supporting documents. The word ‘document’ means a piece of paper or booklet providing information, especially of an official or legal nature. Accordingly, a source document refers to the first document to record the transactions in the journal or subsidiary books of account. It is a first or original document on the basis of which information is recorded in, the different books of accounts. When we purchase machinery in cash for ₹ 50,000, we get the cash memo. Such a cash memo is a sources document.

Thus, cash memos, vouchers, debit and credit notes, pay-in-slip, receipts, withdrawal slips, inward and outward invoices, cheques, etc. are the different source documents, businessmen use in their day-to-day business transactions. Each and every accounting entry is supported by the relevant documentary evidence called ‘accounting documents’. Accounting documents provide a base for entering business transactions in the books of accounts.

Importance and Utility Of Accounting Documents-

• Accounting documents are useful for recording all business transactions into the books of accounts.
• Accounting documents help to record business transactions in the proper mode.
• Accounting documents can be kept physically in files or they can be stored in the software.
• Accounting documents can be used as legal evidence in a court of law.
• They are also required by the charity commissioner’s office.
• They are needed for payments of state government and local body authority.

Important Accounting Documents are Explained As Follows-

Voucher : A document that supports a payment made by the business is called voucher. It is a legal proof of certain amount money is paid to a person or party. The different types of vouchers prepared by the accountants, e.g. Cash voucher, Bank voucher, Purchase vouchers, Sales vouchers, Travel bills, Wage bill, Salary bill, etc. Vouchers are classified as internal voucher and external voucher.

• Internal voucher : The voucher which is prepared in the organisation by the accountant is called internal voucher. It is created by the accountant and singed by the payee. It is prepared when organisation cannot get receipt or any other legal proof for payment made, e.g. payment of taxi fare, auto fare, coolie charges, payment made to scavengers, etc.
• External voucher : The vouchers which are generated or prepared outside the business organisation are called external voucher. It is a document receipt from outside agency after making payments, e.g. receipt of electricity bill paid, tax invoice received from seller for purchase of goods, etc. Debit note, credit note, cash memo, etc. are called external voucher.
• Journal voucher : The vouchers on the basis of which business transactions are recorded in the journal book. The specimen of journal voucher is given below:

(iv) Cash voucher : The legal proof or evidence of cash receipts and cash payments is called cash voucher. Accounting document obtained from payee is also called cash voucher. Entries in the cash book are made on the basis of cash vouchers. The specimen of cash voucher is given below:

(v) Tax invoice : A document which is prepared by the seller to inform the buyer about the quantity of goods supplied rates and terms of payment, trade discount if any allowed, CGST and SGST charged on the goods supplied and total amount payable by the buyer is called Tax invoice. Tax invoice is considered by buyer as ‘Purchase invoice’ or ‘Inward invoice’. Same tax invoice is considered by seller as ‘Sales invoice’ or ‘Outward invoice’. Tax invoice is prepared and sent by seller to buyer after the goods are supplied to buyer. The buyer makes the entries in the purchase book on the basis of purchase invoice and the seller makes the entries in the sales book on the basis of sales invoice.
The specimen of Tax invoice is given below :

(vi) Credit Memo : When the goods are sold on credit the supplier of the goods issues a document called credit memo to the purchaser of goods. It is also known as ‘Bill’ or ‘Invoice’. The period of credit, date of payment, name of customer, address of the customer, etc. are mentioned on this document. Credit memos are usually printed and serially numbered by machine. Credit memo is prepared in duplicate. The second copy i.e. carbon copy is retained by the seller. On the basis of carbon copy of the credit memo entries in the books of seller are made. Credit memo is sent by the seller to the buyer. The buyer’s signature is obtained on the carbon copy. The entries made in the sales book are verified on the basis of credit memo.

(vii) Receipt : A document issued by the receiver of money or creditor to acknowledge the receipt of cash or payment of debt is called a receipt. It serves as proof of payment. It is a written acknowledgement that one has received goods or money. It is issued by the receiver to the person who makes payment or gives money. Receipt is a main document on the basis of which the debit side or the receipts side of the cash book is written. The specimen of Receipt is given below:

(viii) Cheque : A cheque is a document used by an account holder for withdrawing cash from the bank or for making payments to other people through the bank. A cheque book contains 10, 25, 50 or 100 blank cheques. Cheques are serially numbered. A cheque book is provided by the bank to account holders free of charge, if the account holder agrees to keep a minimum balance of ₹ 1,000/- in his account.

In legal language, a cheque is a written unconditional order of the account holder to his banker to pay a certain sum of money only to himself or to bearer or to the person named therein. The person to whom the amount of cheque is payable is called payee and the bank on whom the cheque is drawn is called the drawee bank, and account holder who issues the cheque is called the drawer.

A separate slip with the printed columns are attached at the end of the cheque book to write details regarding cheques issued.
The cheque may be classified as Bearer Cheque, Order Cheque and Crossed Cheque.
Contents : The cheque contains the following details:

• Name of the bank and its branch. The address of the branch. They are printed on the cheque.
• Date of banking transaction.
• Name of payee.
• Amount in words and in figures.
• Account No. / L.F.
• Signature of the Account holder.
• Cheque No.
• MICR No. / Code No. They are usually printed.

Specimen of cheque is given below:

(a) Bearer Cheque: Bearer means possessor. In case of bearer cheques, a bank makes immediate cash payment to the possessor of the bearer cheque on its presentation. For immediate withdrawal of cash, a bearer cheque is used by the account holder. A cheque on which instead of writing name of the payee, the word self is written, is called a bearer cheque. The bearer of a cheque has to make a signature on the back
of the bearer cheque before withdrawing money from the bank. While making cash payment, against bearer cheques a bank never makes inquiry whether the payee is a wrong doer or not. A bearer cheque is very dangerous, because, in case it is lost, the possessor, can easily obtain cash from the bank. A bearer cheque is as good as cash, because it can be encashed by any one at any time during banking hours.

Specimen of bearer cheque is given below:

(b) Order Cheque : A cheque in which the account holder orders the bank to make payment to a person whose name appears on the cheque, is called an order cheque. In this type of cheque, word ‘bearer;’ after the name of payee is struck off and word ‘order’ is retained. An order cheque is safer than a bearer cheque. While making cash payments against order cheques, a bank makes inquiry whether the possessor of the order cheque is the right person or not.

Specimen of order cheque is given below :

(c) Crossed Cheque :
Crossed cheque is a cheque on which two parallel transverse lines are drawn on the face of the cheque at the left hand top corner with some words or without any word. When the crossed cheque is presented for payment it is not paid in cash to payee or possessor, but it is credited to the payee’s account in the bank and after two or three days, payee i.e. account holder is permitted to withdraw the amount from the bank if it is cleared and not dishonoured. This type of cheque is more safe than any other. If a crossed cheque is lost, a wrong doer cannot obtain payment from the bank. The bank never makes immediate cash payment on counter on presentation of a crossed cheque. Crossed cheques are sent to distant places by ordinary post safely.

Specimen of crossed cheque is given below :

(d) Account Payee Cheque :
A cheque is said to be A/c payee crossed cheque, when the drawer inserts the words ‘A/c payee’ in between the two parallel transverse lines of a crossed cheque. When the drawer of a cheque desires to pay the amount of a cheque to the banker who has an account of the payee for the benefit of the payee; he issues an A/c payee crossed cheque. In this type of crossing, there is direction to the collecting banker to collect the amount of the cheque for the benefit of the payee. This type of crossing prevents further negotiability of a cheque.

Specimen of an A/c payee crossed cheque is given below:

Journal-

Meaning:
Journal is the most important book of accounts, in which business transactions are systematically recorded.
It is a book of daily records. As and when a businessman completes a business transaction, he records it in
the rough or waste book in a short and summarised form. Then this business information from the rough
book is recorded in a journal. Thus, business transactions are recorded in a journal on the basis of the rough
book or waste, book.

The word bJournal is derived from the French word ‘jour’, which means ‘a day’. Accordingly, journal is a book of daily records. Journal is one of main books of original entry in which transactions are recorded for
the first time, from source documents. This is also known as the book of original entry or first entry or
primary entry. Business transactions are first entered in a journal and subsequently they are posted to another account book called ledger. Journal is a book of account in which all types of day to day business transactions are recorded in chronological order (i.e. datewise). In a journal, business transactions are recorded systematically and in summarised form by following the rule of debit and credit.
According to L. C. Cropper, “A journal is a book, employed to classify or sort out transactions in a form convenient for their subsequent entry in the ledger. ”

Generally, the following Books of Accounts are maintained by a businessman for recording the business transactions.

(ii) JOURNAL (Definition) :

• According to a Dictionary for Accountant written by Eric Kohler – “A Journal is the book of original entry in which are recorded transaction not provided for in specialised journals. ”
• “Journal is a book of original entry or prime entry in which all day to day transactions of business are recorded first in chronological order firstly in debit and credit form in a systematic manner. ”

(iii) IMPORTANCE OF JOURNAL :
The importance of a journal is explained as below:

• A journal is very important from the business point of view as it creates complete, preliminary and basic records of accounting transactions.
• In a journal business transactions are recorded in chronological order which is useful for easy reference in the future.
• Information recorded in the journal serves as a proof or evidence which can be used to defend the suit filed against the business concern or to prove claims in the court of law.
• Information recorded in the journal provides the base for ledger posting.
• It provides a base for cross checking of accounting entries posted in the various ledger accounts.
• It maintains the detail records of each transaction in the form of narration which is written immediately after passing the accounting entry.
• It provides the base for advanced accounting work and helps in preparation of final accounts.
• Arithmetical accuracy of the entries is ensured when the totals of debit and credit amount columns agree.

(iv) Utility of Journal :

Utility means usefulness. Journal is useful to different parties in different ways. The utility of a journal is explained as below:

• The journal as an account book is useful to the businessmen because it provides complete, detailed, datewise and accurate records of business transactions to businessmen as and when they need.
• The journal creates permanent records of business transactions which will be useful to businessmen in future.
• In a journal, business information is recorded in chronological order i.e. datewise systematically for easy reference.
• The business information in a journal is written on the basis of the waste book and different source documents systematically. Explanation of business transaction is also written just below the entry for a better understanding of the nature of business transactions.
• By referring to the Ledger Folio column in a journal, a businessman can easily refer to the position of that account in the ledger.
• On the basis of recorded business information in journal, ledger posting or filling of ledger can be done easily and at a convenient time.
• Business information which is recorded chronologically in a journal serves as valuable evidence in the court of law. The court of law recognizes a journal as an important evidence while proving or disproving the business claims. If insured goods are lost by fire, the insurance company or court of law determines the claim amount on the basis of information noted in the journal.
• With the help of journal and ledger, cross checking of business transaction is possible and bogus entries if at all passed can be easily found out.

(v) Specimen Form of the Journal :

(a) Specimen form of the journal is given below:

(b) Significance and explanation of columns provided in the journal :

(1) Date column: In this column of the journal, the date of transaction is written. Date of transaction is written in order of year, month and date. For example, 1st July, 1997 is written as 1997 July 1st.

(2) Particulars column: In the particulars column of the journal, the accounting entry is written in summarised  form of debit and credit. On the first line account debited is written. The word ‘Dr’ is written at the right  end of particular column or the same line of account debited. On the second line account credited is written with a prefix the word ‘To’ after leaving short space from the date column. Just below this accounting entry narration i.e. explanation of business transaction, is written in brackets. Narration begins with the word “Being”.

(3) Ledger Folio No. Column : In the Ledger Folio No. (L.F. No.) column of the journal, the page number of s
the ledger on which the journal entry is posted, is recorded. The page number of the ledger is recorded in ,
red ink for easy reference. By referring to the ledger page as indicated in the journal under L.F. No. column, businessman can easily ascertain the exact financial position of that account.

(4) Debit amount and Credit amount columns : In the journal, the fourth and fifth columns are provided
for debit amount and credit amount respectively. In those columns, amounts of business transactions are entered, in figures.

Totalling (Casting) of Journal: At the end of each page of the journal, the total of the amounts recorded ‘
in Debit column and Credit column is done to check arithmetical accuracy of the amount recorded in debit ‘
and credit columns of the journal. The total of both the columns must agree with each other. This totals are again recorded on the next page in the beginning as total brought forward from the previous page. On the
last page of journal ‘Grand Total’ is cast.

(vi) Journalisation:

(a) Meaning of Journalisation : Journalisation refers to recording business transactions systematically and in summarised form in the journal. In other words, journalisation means a process of entering two fold effects of business transactions –
in the summarised form of debit and credit in the journal.

(b) Steps to be taken for journalisation of business transactions are discussed below:

• Read the given business transaction, understand it and find out the different accounts involved in it.
• As per nature and types of those accounts, apply rules of journalisation for giving debit and credit effects to those accounts.
• Record date of business transaction in the date column and account to be debited on first line and account to be credited on the second line in the particulars column of the journal.
• The word Debit in abbreviation is written as ‘Dr’, and the same letters are written against the name of the account debited. The word ‘To’ is written preceding to the name of account credited. For example, the entry for credit sale of goods to Kishor is recorded in the journal under particulars coloumn as:
  
• Enter the amount of business, transaction in debit column and credit column of the journal. Draft the narration in simple and short words.
• A blank line should be drawn or left before writing the next entry in the particulars column of the journal.
• L.F. (Ledger Folio) i.e. the page on which the particular account is opened in ledger is stated under the LF. column for easy reference.

Steps in journalisation :

(vii) Goods Account : In the books of account, Goods Account does not appear. It is usually classified as Purchase A/c, Return Outward A/c (Purchase Return A/c), Sales A/c, Return Inwards A/c (Sales Return A/c), Goods destroyed by Fire A/c, Goods distributed as free samples, Goods withdrawn by the Proprietor’s A/c, Goods damaged or Lost in Transit A/c, etc.
Purchases are of two types viz. Cash Purchases and Credit Purchases. Similarly Sales are of two types viz. Cash Sales and Credit Sales.

(viii) Types of Journal Entry :
The different types of journal entries are shown in the following chart:

The different types of journal entries are explained below:

(a) Simple Journal Entry : A journal entry in which only two accounts are affected of which one account is debited and the other account is credited is called simple journal entry. In a simple entry, one account is always debited and othei account is always credited.

Example of simple jourr al entry is given below:
Purchase furniture for ₹ 25,000.

(b) Combined Journal Entry: Journal entry may be classified as simple journal entry and compound / combined journal entry. A journal entry which contains more than one debit and more than one credit or both is called combined or compound journal entry. In a combined journal entry: (i) one account is debited and more than one account are credited or (ii) more than one account are debited and one account is credited or (iii) more than one account are debited and more than one account are credited.

Illustration of combined entry is shown below :

(c) Opening Entry: The combined journal entry which is passed in the books of accounts in the beginning of the accounting year to record the balances of all assets and liabilities of the business carried forward from the last Balance Sheet is called opening entry. In the Balance Sheet, balancing value of assets, liabilities and capital of the business enterprise on the last day of the financial year are recorded. In the beginning of the next financial year, new books of accounts are opened and balances of assets, liabilities and capital account recorded in the previous balance sheet are brought forward. The positive difference between account debited and account credited in the opening entry is treated as capital fund of the proprietor. Thus, in the beginning of the year capital fund is ascertained by deducting all liabilities from all the assets. In the form of equation.

Capital = Total Assets – Total Liabilities

GST-

(i) Meaning : GST is the abbreviation of Goods and Service Tax. Before the application of GST every state used to impose variety of taxes at different stages of trading. The different taxes which existed before were: Excise duty, Custom duty, VAT i.e. Value Added Tax, Entertainment Tax, Central Sales Tax, Octroi, etc. Now all these taxes are brought under one head called GST. GST is also called One nation, one tax, one market. GST is implemented with effect from 1st July, 2017.
In the tax invoice for Goods there is Harmonised System of Nomenclature Code (HSN) whereas in the tax invoice for services there is Service Accounting Code (SAC).
The chart showing goods and services and Rate of GST applicable is given below :

Note :

(1) The rates and types of GST are as prescribed by the government. GST rates are subject to change. Electricity, petrol, diesel etc are not under purview of GST.

(2) IGST means Integrated Goods and Service Tax. This is one of the three categories under Goods and service Tax (CGST, IGST and SGST) with concept of‘One Tax One Nation’.

IGST falls under integrated Goods of Service Tax Act 2017.
IGST is charged when movement of goods and services take place from one state to another.

Discount-

Discount is a concession given in monetary term by one trader to another trader for purchase of large quantity or for quick repayment. There are two types of discount viz.
(i) Trade discount and (ii) Cash discount.

(i) Trade Discount: It is a discount given by one trader to another trader like manufacturer to wholesaler or wholesaler to retailer to induce the later to purchase a large quantity of goods. It is given for credit transaction also. It is deducted from invoice price of goods and not recorded in the books of account, e.g. Sold goods to Ravi for ₹ 1,000 on 10% Trade discount.

(ii) Cash Discount: It is a discount given by the seller to the purchaser for quick cash payment. It is given or received for cash transaction and cash payment only. It is calculated after deducting trade discount i.e. on the net price and recorded in the journal by means of entry, e.g. Sold goods to Ravi for ₹ 1,000 on 10% T.D. and 5% C.D. terms and cash paid.

Distinguish Between Trade Discount And Cash Discount-

Trade Discount Cash Discount:

• It is given for cash as well as credit transactions.
• It is calculated on the gross price i.e. invoice price.
• It is calculated before cash discount.
• It is deducted from the price and not recorded in the books of account.
• It is given for large purchases to encourage a buyer to buy more and more quantities.

Cash Discount:

1. It is given for cash transactions only.
2. It is calculated on net price.
3. It is calculated after trade discount.
4. It is recorded in the books of account.
5. It is given for quick payment to induce the buyer to make quick payment.

By going through these Maharashtra State Board Bookkeeping and Accountancy 11th Notes Chapter 10 Single Entry System students can recall all the concepts quickly.

Maharashtra State Board 11th Accounts Notes Chapter 10 Single Entry System

Introduction-

On account of many factors such as incomplete knowledge of accounting principles, lack of experience of writing accounts, less staff,.shortage of finance, time factor, etc., small businessmen cannot adopt the scientific method of accounting to record their business transactions systematically in the separate set of books.

However, they record only a single aspect of every business transaction in their books to ascertain the result of business and to know the amount receivable from customers and amount payable to suppliers or lenders. They keep record of cash received, cash paid, cash sales, cash purchases, debtor’s account, creditor’s accounts, etc. Thus, any set of procedure adopted to ascertain business result is usually referred as Single entry system of accounting. Although single entry system of accounting.is suitable for small business, it suffers from many drawbacks.

Meaning And Definition of Single Entry Book Keeping System-

A system of book-keeping in which the accountant or the businessman records only one aspect of business transaction and ignores the other aspect is called ‘Single entry book keeping system’. Under single entry system of book keeping, only record of cash and personal accounts are maintained.
According to Kohler, single entry book-keeping refers to “a system of book-keeping in which as a rule only records of cash and of personal accounts are maintained, it is always incomplete double entry, varying with circumstances.”

According to this definitioft, under single entry system accountants or businessmen keep records of those transactions and accounts which they find absolutely necessary. Under this system cash accounts, debtor’s accounts and creditor’s accounts are maintained. The record of impersonal accounts such as real accounts and nominal accounts is not maintained under this system.
When businessmen or accountants adopt single entry book-keeping system, they calculate profit or loss made during the accounting year by any one of the following two methods viz. (i) Statement of Affairs methods and (ii) Conversion method.

Difference Between Single Entry System And Double Entry System-

Single Entry System:

1. Meaning: A book keeping system in which only one aspect of every business transaction either debit or credit is recorded in the books of accounts is called ‘Single Entry System’.
2. Nature : It is unscientific and incomplete system of accounting.
3. Transactions Recorded: Under this system, records of only personal accounts of debtors and creditors and cash book are prepared and maintained.
4. Suitability: It is suitable for small business organisations such as sole trading concerns and partnership firms.
5. Arithmetical Accuracy: Under this system trial balance cannot be prepared to check arithmetical accuracy.
6. Final Accounts: Under this system final accounts cannot be prepared. Instead statements of affairs and statement of profit or loss to find out business result and financial position.
7. Authenticity: This system cannot be considered authentic and hence it is not accepted by the court of law.
8. Cost: This system is relatively less expensive.

Double Entry System:

1. Meaning: A book keeping system in which dual aspects of every business are systematically recorded in the books of accounts is called ‘Double Entry System’.
2. Nature : It is more complete and scientific system of accounting.
3. Transactions Recorded: Under this system, personal, nominal and real accounts including cash accounts are prepared and maintained.
4. Suitability: It is suitable for all types of business organisations whether small or large scale.
5. Arithmetical Accuracy: Under this system trial balance is prepared to find out arithmetical accuracy.
6. Final Accounts: Under this system final accounts are prepared to find out true business result and financial position of the business.
7. Authenticity:This System is considered authentic and hence it is accepted by the court of law.
8. Cost: This system is relatively more expensive.

Statement of Affairs-

A list of all assets and liabilities prepared under single entry system to find out capital balance is called statement of affairs. It is just similar to Balance Sheet prepared under double entry system. On left hand side of this statement all liabilities are recorded and on the right hand side all assets are recorded. It is usually prepared to find out capital employed in the business.

Statement of affairs prepared on the basis of opening balances of assets and liabilities in the beginning of the accounting year is called opening statement ,
of affairs and a statement of affairs prepared on the basis of closing balances at the end of the year is called closing statement of affairs. From the opening statement of affairs, opening capital is ascertained and from closing statement of affairs capital at the end of year is ascertained. If capital at the end of the year exceeds the opening capital, there is a profit. If opening capital exceeds the capital at the end of the year, there will
be loss.

Proforma of Statement of Affairs :

Difference Between Balance Sheet And Statement of Affairs-

Balance Sheet:

1. Meaning: A statement showing the position of assets and liabilities at their correct values at the end of the accounting year is called Balance Sheet.
2. Objective : The objective of preparing balance sheet is to ascertain the financial position of the business.
3. Accounting System: Balance Sheet is prepared under double entry book-keeping system.
4. Value of Assets and Liabilities : In the balance sheet assets and liabilities are shown at their actual cost shown by the ledger.
5. Capital: In the balance sheet, capital account balance is taken from ledger account.
6. Reliability: As Balance Sheet is prepared by following the principle of double entry system, it is more reliable.
7. Arithmetical accuracy: If balance sheet is tallied it proves that there is no arithmetical mistakes.
8. Omission: Omission of any asset or liability can be easily trace out in case balance sheet does not tally.

Statement of Affairs:

1. Meaning: A statement showing the position of assets and liabilities at their approximate or estimated value at the beginning or end of the accounting year is called ‘Statement of Affairs’.
2. Objective : The objective of preparing statement of affairs is to find out capital invested in the business and thereby find out profit or loss of the business.
3. Accounting System: Statement of affairs is prepared under single entry system.
4. Value of Assets and Liabilities : In the statement of affairs assets and liabilities are shown at their estimated values.
5. Capital: In the statement of affairs, capital fund is worked out by ascertained balancing figure.
6. Reliability: As statement of affair is prepared on the basis of estimated amount, it is less reliable.
7. Arithmetical accuracy: In the case of statement of affairs, there is no scope for finding out arithmetical accuracy.
8. Omission: In case of statement of affairs omission of any asset or liability cannot be traced out.

Statement of Profit or Loss-

Under single entry system financial position is ascertained by preparing statement of affairs. Similarly business result is ascertained by preparing statement of Profit or Loss.
Under single entry book keeping system, Profit or Loss of the business in a particular year is calculated by following one of the following two method viz.
(i) Net Worth Method and (ii) Conversion Method
(Please note that conversion method is not prescribed in XI syllabus)

Net Worth Method :
Under this method profit is calculated by deducting capital at the beginning of the year from the capital at the end of that accounting year. From the balancing figure amount of drawings made during the accounting year is added and addition made to capital if any is deducted. The balancing figure represents trading profit or profit before adjustments. From trading profit business expenses are deducted and business incomes are added to get net profit of the business. For this statement of Profit or Loss is prepared.

The statement prepared by the business organisation under single entry to find out profit earned or loss suffered is called statement of Profit or Loss. The following accounting items are considered in the Statement of Profit or Loss viz. Opening Capital, Capital at the end of the year, drawings made during the year, additional capital introduced during the year, interest on capital, interest on drawings, all business expenses and all business incomes.

Proforma of Profit or Loss :

[Note: If result comes positive there is profit and if result comes negative there is loss]

Additional Information (Adjustments):

Information in respect of unrecorded transactions or unrecorded accounting effects are called additional information or adjustments :

(1) Additional Capital : Amount of cash or any other asset brought into the business by the proprietor any time during the accounting year is called additional capital.
Additional capital is introduced into the business by the proprietor, it increases the amount of closing capital. Hence, in order to calculate the profit, additional capital is deducted from the Closing Capital.

(2) Drawings: Total amount of cash or any other business asset withdrawn by the proprietor from the business for self use or family use is called drawings. Due to withdrawal of funds or assets closing capital decreases. Hence the amount of drawings is added to Closing Capital.

(3) Depreciation: The reduction in the value of fixed assets due to it use, wear and tear, etc. is called depreciation. Depreciation is charged against profit. Hence the amount of depreciation is deducted from trading profit.

(4) Bad Debts : Irrecoverable amount from the debtor is called Bad debts. Bad debts is treated as business loss. Hence the amount of bad debts is deducted from trading profit.

(5) Reserve for Doubtful Debts (Provision for Bad and Doubtful Debts): The provision made for probable loss is called ‘Provision for Bad and Doubtful Debts’. The amount of Provision for Bad and Doubtful Debts is deducted from Trading Profit.

(6) Undervaluation of Assets : Assets which are undervalued previously and if they are brought to correct value, there will be increase in the value of concerned assets.
Since Capital = Assets – Liabilities.
Increase in the value of asset results into the capital gain and therefore such increase is to be added to trading profit.

(7) Overvaluation of Assets : Assets which are overvalued previously and if they are brought to correct value, there will be decrease in the value of the concerned assets. Decrease in the value is a loss and hence overvaluation i.e. decrease in the value of asset is to be deducted from the trading profit.

(8) Undervaluation of Liabilities: Liabilities which are undervalued previously and if they are to be brought to the correct value, there will be increase in the value of liabilities. Increase in the value of liabilities deduces the volume of profit and hence undervaluation of liabilities i.e. increase in the value of liabilities is deducted from the trading profit.

(9) Overvaluation of Liabilities : Liabilities which are overvalued previously and if they are brought to correct value, there will be decrease in the value of liabilities. Decrease in the value of liabilities is a gain to the business and hence overvaluation of liabilities i.e. decrease in the value of liabilities is to be added to trading profit.

(10) Interest on Loan : Amount borrowed by the business enterprises from the financial institutions including banks for productive purpose is called loan. Interest on loan required to be paid by the business enterprise to the lending institutions. While calculating interest on loan the period for which it is used is to be considered. Interest on loan is an expenditure and hence the amount interest is to be deducted from trading profit.

(11) Interest on Capital: Interest on capital changed by the proprietor is an expense of the business. Hence amount of interest is deducted from the trading profit. On opening balance of capital interest at specified rate is to be calculated for complete one year and interest on additional capital introduced into the business during the accounting year is to be calculated at specified rate for the proportionate period i.e. from the date of investment of additional capital to the 31st March of the accounting year. E.g..Capital as on 1st April 2019 is ₹ 2,50,000 and additional capital of ₹ 50,000 is introduced into the business on 1st August 2019. The rate of interest on capital is 12% p.a.

Interest on capital is calculated as follows:

• On opening balance of ₹ 2,50,000 @ 12% for 1 year = 2,50,000 x 1 x \(\frac{2}{100}\) = ₹ 30,000
• On additional capital of ₹ 50,000 @ 12% for 8 months = 50,000 x \(\frac{8}{12} \times \frac{12}{100}\) = ₹ 4,000
  (i.e. from 1st August 2019 to 31st March 2020)
  Total interest on capital = 30,000 + 4,000 = ₹ 34,000

(12) Interest on Drawings : Interest charged on the drawing is an income for the business enterprises. Hence, amount of interest is always added to trading profit. If the dates of drawings are given, then interest is to be charged at specified rate for proportionate period i.e. from the date of drawing to the end of that accounting year.

If the dates of drawings are not given, then interest at the specified rate is to be calculated for average period of 6 months.

(13) Outstanding / Unpaid Expenses: Expenses that are due for payment but not yet paid are called outstanding or unpaid expenses. The amount of outstanding or unpaid expenses is charged against Profit and Loss A/c and hence the amount of outstanding/unpaid expenses is deducted from the trading profit.

(14) Prepaid Expenses / Expenses paid in Advance: Expenses that are paid before they are due for payment are called prepaid expenses. The amount of prepaid expense is added to the trading profit.

By going through these Maharashtra State Board 12th Science Chemistry Notes Chapter 15 Introduction to Polymer Chemistry students can recall all the concepts quickly.

Maharashtra State Board 12th Chemistry Notes Chapter 15 Introduction to Polymer Chemistry

Classification of Polymers-

1. Based on source or origin
2. Based on structure
3. Based on intermolecular forces
4. Based on the mode of polymerization
5. No. of monomers
6. Biodegradability

Based on source or origin:

• Natural Jute, linen
• Synthetic Nylon, terylene
• Semisynthetic Acetate, rayon

Based on structure:

• Linear Polyethene
• Branched-chain Polypropylene
• Cross-linked vulcanized rubber melamine

Based on intermolecular forces:

• Elastomers Neoprene
• Fibres Nylon-6 polyesters
• Thermoplastic PVC, Polystyrene
• Thermosetting Bakelite

Based on mode of polymerization:

• Addition Polyvinyl chloride
• Condensation Nylon polyester dacron
• Ring-opening Nylon-6

No. of monomers:

• Homopolymers Polyacrylonitrile
• Copolymers Buna-S, Buna-N

Biodegradability:

• Biodegradable PHBV
• Non- biodegradable Bakelite, Nylon

Natural rubber: It is a linear polymer of isoprene (2-methyl-1, 3-butadiene), Cis isomer, exhibits elastic property.

Vulcanization of rubber: The effect of vulcanization enhances the properties like stiffness elasticity, toughness etc. of natural rubber
Natural rubber +1-3% sulphur → Rubber is very soft
Natural rubber + 20-30% sulphur → Rubber is hard.

Polyethene:

(1) LDP (Low-density polyethylene)

(2) HDP (High density polyethylene)

(3) Teflon :

(4) Polyacrylonitrile :

(5) Condensation polymerization. (Polyamide, polyester fibres)

Example : Nylon-6, Nylon-66, Terylene.

(6) Preparation of bakelite :
Formaldehyde + Phenol → Novolac → Bakelite
Other polymers of formaldehyde

1. with urea (NH₂CONH₂) → Moulded plastic
2. with melamine: formaldehyde + melamine → monomer formaldehyde melamine polymer

(7) Preparation of synthetic rubber :

• Buna-S (SBR) Styrene-butadiene rubber
  Styrene + 1, 3-butadiene → Buna-S
• Neoprene rubber
  

(8) Semisynthetic fiber:

(9) Biodegradable polymers :

PHBV (polyhydroxy butyrate-CO-β hydroxy valerate)
3-Hydroxy butanoic acid + 3 Hydroxy pentanoic acid PHBV (ester linkage)

Nylon-2-nylon-6
Glycine + amino caproic acid → Nylon -2-nylon-6

(10) Commercially important polymers :

• Perspex/acrylic glass
• Buna N
• PVC
• Polyacryl amide
• Urea-formaldehyde resin
• Glyptal
• Polycarbonate
• Thermocol.

By going through these Maharashtra State Board 12th Science Biology Notes Chapter 11 Enhancement of Food Production students can recall all the concepts quickly.

Maharashtra State Board 12th Biology Notes Chapter 11 Enhancement of Food Production

Improvement in Food Production-

• Food: It is defined as any solid or liquid substance, which is swallowed, digested and assimilated in the body to keep us well.
• It is an organic, energy-rich, non-poisonous, edible, and nourishing substance.
• Importance of food: It gives us energy for all body activities. It keeps us alive, strong and healthy.

Plant breeding-

1. Plant breeding involves the improvement or purposeful manipulation in the heredity of crops and the production of new superior varieties of crops.
2. It involves genetic alteration of plants to increase their value and utility.
3. Objectives of plant breeding : Some objectives of plant breeding are common (as given below) and some vary according to type and use of the plant.

• To increase crop yield.
• To improve quality of produce.
• To increase tolerance to environmental stresses.
• To develop varieties of plants resistant to pathogens and insect pest.
• To alter the lifespan.

4. Different methods of plant breeding : Introduction, selection, hybridization, mutation breeding, polyploidy breeding, tissue culture, r-DNA technology, SCP (Single cell protein).

5. The present day crops are the result of domestication and acclimatization.
A. Hybridization and its technique :

• Hybridization is an effective means of combining the desirable characters of two or more varieties.
• New genetic combinations can be created by hybridization.
• It exploits and utilizes hybrid-vigour.

4. Types of Hybridization :

• Intravarietal (between plants of same variety)
• Intervarietal (between two varieties of the same species)
• Interspecific (between two species of the same genus)
• Intergeneric (between two genera of the same family)
• Wide/distant crosses : Crosses between distantly related parental plants. Interspecific and intergeneric hybrids are rare to occur in the nature.

5. The main steps of the plant breeding program (Hybridization) :

(1) Collection of variability :

• Germplasm collection : The entire collection having all the diverse alleles (i.e. variations) of all genes in a given crop.
• Germplasm conservation :
  • In situ conservation : Done with the help of forests and Natural Reserves.
  • Ex situ conservation : Done through botanical gardens, seed banks, etc.

(2) Evaluation and selection of parents
(3) Hybridization
(4) Selection and testing of superior recombinants
(5) Testing, release and commercialization of new cultivars

6. Green revolution :

• Green revolution is the development of high- yielding improved varieties of wheat and rice through techniques of plant breeding, in the decade from 1961, which helped the farmers to attain record production of agricultural crops in our country.
• Basic elements for Green revolution : The use of seeds of improved varieties of crops for cultivation, expansion of land for cultivation (farm land), optimum use of pesticides and fertilizers, multiple cropping system, modern farm machinery and proper irrigation system.
• Dr. Norman E. Borlaug was awarded the Nobel prize for developing the semi-dwarf varieties of wheat at international centre for wheat and maize.

Steps of hybridization

Germplasm collection:

• Evaluation and selection of parents with different qualities
• Obtaining pure lines by selfing of selected parents for three to four generations
• Identification of parents as male parent (donor) and female parent (recurrent)
• Collection of pollen grains from the flowers of male parent
• Emasculation of flowers of the female parent before anthesis
• Artificial cross (dusting of pollen grains collected from male parent on the stigma of emasculated flowers)
• Bagging, tagging of the emasculated flower of female parent
• Development of fruits and F₁ seeds
• Selection and testing of F₁ hybrid for combination of desirable characters
• Field trials for yield (productivity)
• Testing and the release of variety

7. Indian Hybrid Crops :

(1) Wheat and Rice :

• Hybrid wheat varieties in India : Sonalika and Kalyan Sona
• Semi-dwarf rice varieties in India : Jaya, Padma and Ratna
• Semi-dwarf rice varieties were developed from IR-8 (International Rice Research Institute) and Taichung native-I (from Taiwan) and introduced in India.

(2) Sugar cane :

• Saccharum barberi : Native of North India and it has poor yield and sugar content.
• S. officinarum : Grown in South India, has thicker stem and high sugar contents, but it does not grow well in North India.
• Hybrid varieties developed by crossing these two species have desirable combinations of characters like high sugar content, thicker stem and the ability to grow in North India.
• Sugar cane varieties developed at Coimbatore, Tamil Nadu : CO-419, 421, 453

(3) Millets : Hybrid maize (Ganga-3), Jowar (CO-12) and Bajra (Niphad) : High yielding and resistant to water stress.

8. Plant Breeding for Disease Resistance :

• Its objective is to develop varieties that are resistant to plant pathogens.
• It is carried out by hybridization process.
• Some of the plant diseases are as follows.
  

  Plant pathogens	Diseases
  Viruses	Tobacco mosaic disease Chilli mosaic disease
  Fungi	Brown rust of wheat Late blight of potato Red rot of sugar cane Smut of wheat
  Bacteria	Black rot of crucifers

• Disease resistant varieties of different crops :
  

  Disease resistant varieties	Diseases
  Pusa sadabahar of chilli	Chilli mosaic virus, Tobacco mosaic virus and leaf curl
  Pusa shubhra of cauliflower	Black rot and curl blight black rot
  Himgiri variety of wheat	Hill bunt Leaf and stripe rusy
  Pusa swarnim of Brassica	White rust

B. Mutation Breeding :

• Mutation : It is a sudden heritable change in the genotype, caused naturally.
• Natural (physical) mutagens : High temperature, high concentration of C02, X-rays, UV rays.
• Chemical mutagens : Nitrous acid, EMS (Ethyl – Methyl – Sulphonate), Mustard gas, Colchicine, etc.
• Effects of mutagens : Gene mutations and chromosomal aberrations.
• Seedlings or seeds are irradiated by Cobalt 60 or they are exposed to UV bulbs, X-ray machines, etc. The treated seedlings are then screened for resistance to diseases/ pests, high yield, etc.

Mutant varieties :

• Rice : Jagannath
• Wheat : NP 836 (rust resistant)
• Cotton : Indore-2 (resistant to bollworm)
• Cabbage : Regina-II (resistant to bacterial rot), etc.

C. Plant Breeding for Developing a Resistance to Insect Pest :

1. Resistance due to morphological characters :

• Hairy leaves in cotton : Vector resistance from jassids.
• Hairy leaves in wheat : Vector resistance from cereal leaf beetle.
• Solid stem in wheat : Resistance to stem borers.

2. Resistance due to biochemical characters :

• The high aspartic acid and low nitrogen and sugar content in maize : Resistance against stem borers.
• The nectar-less cotton having smooth leaves : Resistance against bollworms.

3. Some pest resistant varieties:

Tissue culture

1. Tissue culture : It is growing isolated cells, tissues, organs ‘in vitro’ on a solid or liquid nutrient medium, under aseptic, controlled conditions of light, humidity and temperature, for achieving different objectives.
2. Explant : The part of plant used in tissue culture.
3. Totipotency : An inherent ability of living plant cell to grow, divide, redivide and give rise to a whole plant.
4. Haberlandt (1902) : He gave concept of in vitro cell culture (plant morphogenesis).
5. The plant tissue culture medium : It consists of all essential minerals, sources for carbohydrates, proteins and fats, water, growth hormones, vitamins and agar (for callus culture).
6. The most preferred medium for tissue culture : MS (Murashige and Skoog) medium.

7. Types of tissue culture :

• Based on the nature of explant : Cell culture, organ culture and embryo culture.
• Based on the type of in vitro growth : Callus culture (solid medium is used) and Suspension culture (liquid medium is used).

8. Requirements of tissue culture :

(1) Maintenance of aseptic conditions :

• Sterilization of glassware : It is carried out using detergents, hot air oven.
• Sterilization of nutrient medium : It is done by using autoclave.
• Sterilization of explant : It is carried out by treatment of 20% ethyl alcohol and 0.1% HgCl₂.
• Sterilization of inoculation chamber (Laminar air flow) : It is carried out by using UV ray tube for 1 hour before performing actual inoculation of explant on the sterilized nutrient medium.

(2) Temperature : 18 °C to 20 °C
(3) pH of nutrient medium : 5 to 5.8
(4) Aeration (particularly for suspension culture)

9. Steps in tissue culture : They are as given in the chart.

• Cleaning and sterilization of glassware and instruments in an autoclave or oven
• Preparation of defined nutrient medium . (MS medium)
• Sterilization of nutritive medium in an autoclave
• (For 20 minutes under constant pressure of 15/lb/inch²)
• Isolation and surface sterilization of explant
• Inoculation of the explant in the culture flask containing sterilized nutrient medium.
  (Inoculation is done in the laminar air flow cabinet unit) Incubation of the inoculated explant
  (cells of explant divide and give rise to callus, within 2-3 weeks)
• Sub culturing of the callus (Division of callus into 3-4 parts which are transferred to fresh culture medium)
• Organogenesis (Initiation of rooting and shooting)
• Plantlet formation
• Hardening of plantlets (Plantlets are transferred to polythene bags containing sterilized soil and kept at low light and high humid conditions for appropriate time period)
• Hardened plantlets are transferred to field

10. Sub culturing : Both the callus and suspension cultures die in due course of time. Therefore, sub culturing is necessary for continuation of the technique. In this a part of callus or suspension culture is transferred to fresh medium.

11. Micropropagation (Clonal Propagation) :

1. It is a type of tissue culture technique by which large number of plants are regenerated using organogenesis.

2. It is used in commercial production of plants like orchids, Chrysanthemum, Eucalyptus, banana, grapes, citrus, etc.

3. Advantages of micropropagation :

• Rapid multiplication of large number of plants within a short period and from a small space.
• Plants are obtained throughout the year, independent of seasons.
• Desirable characters (genotype) and desired sex of superior variety can be maintained for several generations.
• Conservation of rare plant and endangered species.
• Somatic hybrids (cybrids) can be used to develop new variety in short time span.
• High yielding varieties of banana like Shrimati, Basarai and G – 9 are used in Maharashtra.

12. Applications of tissue culture :

• Production of disease free plants and haploid plantlets.
• Production of stress resistant plants, micropropagation.
• Protoplast culture.
• Production of secondary metabolites.
• Culture of rare plants.
• Somaclonal variations.
• Application of tissue culture in forestry, agriculture, horticulture, genetic engineering and physiology.

Single cell protein (SCP)-

1. Conventional method to increase food yield : Use of different methods of crop improvement, biofertilizers, biopesticides, chemical fertilizers and high yielding varieties.
2. Nonconventional methods to increase the
food yield : Use of SCP .
3. , SCP is required to meet growing demand for
protein and to avoid protein malnutrition.
4. Single cell protein : It is a crude or a refined edible protein, extracted from pure microbial cultures or from dead or dried cell biomass.
5. Substrates used for the production of SCP : Wood shavings, sawdust, corn cobs, paraffin, N-alkanes, sugar cane molasses, human and animal wastes.
6. The microorganisms used for the production of SCP :

• Fungi : Aspergillus niger, Trichoderma viride
• Yeast : Saccharomyces cerevisiae, Candida utilis
• Algae : Spirulinaspp, Chlorella pyrenoidosa
• Bacteria : Methylophilusmethylotrophus, Bacillus megasterium

7. Advantages of Single Cell Protein :

• Microbes multiply fast. Hence, a large quantity of biomass can be produced in a short duration.
• The microbes can be easily genetically modified to vary the amino acid composition.
• SCP is a rich source of proteins (43% to 85% WAV basis), vitamins, amino acids, minerals and crude fibres.
• As waste materials are used as a substrate for SCP there is less pollution.

i. e. SCP can be used as fodder for achieving fattening of calves, pigs, in breeding fish, in poultry and cattle farmimg.

Biofortification-

1. Biofortification is a method of developing crops for having higher quantity and quality of vitamins, minerals and fats, to overcome problem of malnutrition.
2. Objectives of biofortification :

• Improvement in protein content and quality
• Improvement in oil content and quality
• Improvement in vitamin content
• Improvement in micronutrient content and quality

3. Methods of development of biofortified varieties : Conventional selective – breeding practices and r-DNA technology.

4. Some examples of biofortification :

• Fortified Maize (Twice the amount of amino acids – lysine and tryptophan)
• Wheat – Atlas 66 (High protein content)
• Rice (Has 5 times more iron)
• Carrot and spinach (Enriched with vitamin A and minerals)
• Bittergourd, tomato (Enriched with vitamin C enriched, developed by IARI)
• Animal husbandry-

1. Animal husbandry is an agricultural practice of breeding and raising livestock.
2. It deals with care and breeding of livestock like buffaloes, cows, pigs, horses, cattle, sheep, camels, goats, etc. which are useful to : humans.
3. Products obtained from animals : Milk, eggs, meat, wool, honey, silk, etc.
4. The production can be increased by –

• Effective management procedures
• New technologies in various farm systems to j improve quality and productivity
• Use of industrial principles of production processing and marketing

5. Management of farms includes selection of high yielding breeds, taking care of food requirements, supply of adequate nutritional sources, cleanliness of the environment and maintenance of health.

6. Management of farm animals includes veterinary supervision, vaccination, high yielding cross breed development, production and preservation of products, distribution and marketing.

A. Animal breeding :

1. Aims of animal breeding :

(1) To increase the yield of animals.
(2) To improve the desirable qualities of the products.
(3) To develop breeds with desirable characters.

2. Breed : A group of animals related by descent and similar in most characters like general appearance, features, size, configuration, etc.

3. Types of breeding :

(1) Inbreeding : Mating of two closely related individuals within the same breed for 4 to 6 generations.
(2) Outbreeding : Breeding of unrelated animals. It is of following types :

• Outcrossing : Mating of animals within the same breed, but having no common ancestors on either side of mating partners up to 4-6 generations is called outcrossing. [Mote : Outcrossing is not same as interspecific hybridization. ]
• Cross-breeding : Cross-breeding is a practice in which superior males of one breed are mated with superior females of another breed.
• Interspecific hybridization : Mating between male and female animals of two different related species, e.g., interspecific hybridization between horse and donkey produces a mule.

4. Artificial insemination : Used for controlled breeding experiments. Semen from the superior male is collected and injected into the genital tract of the female.

5. Multiple Ovulation Embryo Transfer (MOET) : MOET provides chances of successful production of hybrids.

B. Dairy farm management:

1. Dairy industry: It involves production, processing, marketing and distribution of milk and various milk products. Cow dung, manure, fuel cakes and gobar gas (for cooking and lighting) are sources of additional income.
2.  Breeds of cows :
   • Indian breeds of cows : Sahiwal, Sindhi, Gir”
   • Exotic breeds of cows : Jersey, Brown Swiss, Holstein.
3.  Breeds of buffaloes in India : Jaffarabadi, Mehsana, Murrah, Nagpuri, Nlli, Surati.
4. Cattle feed : Silage, oilcakes, minerals, vitamins and salts.
5. The cattle shed : It must be clean, spacious with adequate facilities for feeding, watering and lighting.
6. Cleanliness and hygiene of the cattle and handlers is important during milking, storage and transport of milk and milk products.
7. Mechanization of these reduces the chance of direct contact with the product.
8. Daily visit of veterinary doctor to dairy farm is mandatory to diagnose health problems, diseases and for their rectification.

C. Poultry farm management:

1. Poultry : It includes chicken, ducks, turkey, and fowls which are domesticated for their eggs and meat.
2. Allied professions to poultry : Processing of eggs and meat, marketing of poultry products, compounding and sale of poultry feed, poultry equipment, pharmaceuticals, feed additives, etc.
3. Requirements for poultry farm Management:
Selection of proper and disease free breed, suitable and safe farm condition, proper feed and water, hygiene and health care.

4. Poultry breeds (On the basis of their origin) :

• American breeds : Plymouth Rock, New Hampshire, Rhode Island Red
• Asiatic breeds : Brahma, Cochin and Langshan
• Mediterranean breeds : Leg horn, Minorca
• English breed : Australorp
• Indian breeds : Chittagong, Aseel, Brahma and Kadaknath.

5. Best layer (for eggs) : Leghorn.
6. Best broilers (for meat) : Plymouth rock, Rhode Island Red, Aseel, Brahma and Kadaknath.
7. Management of layers : It involves purchase of high yielding chicken, well-ventilated farms, proper feed, debeaking, lighting, waterer, sanitation, culling and vaccination.
8. Management of broilers : It involves selection of breed, housing, temperature, ventilation, lighting, floor space and broiler feed.

9. Poultry diseases :

• Viral diseases : Ranikhet, Bronchitis, Avian influenza (bird flu), etc. Bird flu had serious impact on poultry farming and also caused infection to humans.
• Bacterial diseases : Pullorum, Cholera, Typhoid, TB, CRD (chronic respiratory disease), Enteritis, etc.
• Fungal diseases : Aspergillosis, Favus and Thrush.
• Parasitic diseases : Lice infection, round worm, caecal worm infections, etc.
• Protozoan diseases : Coccidiosis.

D. Apiculture or bee keeping :

• Apiculture is artificial rearing of the honey bees.
• Products obtained by apiculture : Honey, wax, pollen, bee venom and royal jelly.
• Honey bees are important pollinators for crop plants and fruit trees.
• Apis dorsata (Rock bee or wild bee), Apis melltfera (European bee), Apis indica (Indian bee), Apis Jlorea (Little bee) are the four commonly occurring species in India.
• Apis mellifera and Apis indica are the : suitable species for apiculture and hence Eire : called domesticated species.
• Equipment required for apiculture: It includes beehive boxes, comb foundation sheets, bee veil, smoker, bee brush, gloves, gumshoes, uncapping knife, swarm net, queen : excluder, overall hive tool, etc.
• Successful apicultures also requires familiarity with the habits of bees, selection of suitable location, catching and hiving of swarms, management of hives during different seasons, handling and collection of honey, bee wax and other products, periodic inspection for cleanliness of hive boxes, activity of bees and queen, condition of brood, provision of water.
• Pollination of variety of crop plants by honey bees increases the productivity of honey and crop.

E. Fishery:

• Catching, processing, fish farming and marketing of the fish and other edible aquatic organisms is called fishery.
• Some fishes, prawns, lobsters, oysters, mussels, crabs, etc. are commercially important varieties.
• Inland fishery, estuarine fishery and marine fishery are the three main types of fisheries.
• A long coastline of India of about 7500 km and 40 to 50 lakh acres of fresh water bodies together constitute fishery potential.
• Common fresh water fishes, Rohu, Catla, Mrigal, common carp, grass carp, silver carp, etc. while marine fishes such as Hilsa, Bombayduck, sardines, pomphrets, mackerel, etc. are important varieties of fish.
• Fish farming is another occupation related to fishery in which culturing of some varieties of fish is done. Monoculture and polyculture are two main methods of aquaculture.
• Maintenance of fish farm : It involves selection of suitable site, excavation of ponds, requirements of hatchery tank, nursery tank rearing tank, stocking tank or ponds, water source, manures, supplementary feed, etc.
• Fish farming or culturing of commercially important edible fishes is only possible in fresh water bodies.
• Fish spoilage is prevented by preservation methods such as chilling, freezing, freeze drying, sun-drying, salting, canning, etc.
• Fish oil, fish meal, fertilizers, fish guano fish glue and Isinglass are some of the by-products made from the fish.

F. Sericulture:

• Rearing and production of silkworm (Bombyx mori) for obtaining silk is sericulture.
• Types of silk fibres : Mulberry silk, Tussar silk and Eri silk. Best quality mulberry silk is produced by Bombyx mori.

G. Lac culture :

• Tacchardia lacca insect produces lac. Lac is the resinous substance produced by dermal glands of the female insect.
• Plants such as her, peepal, palas, kusum, babool, etc. form the feed of these insects.
• 85% of lac produced in the world is from India.
• Various articles such as bangles, toys, woodwork, polish inks, silvering of mirrors, etc. are produced from lac.
• Artificial inoculation of plants give better and regular supply of lac.

Microbes in human welfare-

1. Biotechnology : It is defined as applications of ‘Scientific and Engineering principles for the processing of materials by biological agents to provide goods and service to humans or for human welfare’.

2. Microbes in food preparation :

1. Lactobacilli : Dhokla
2. Leuconostoc and Streptococcus bacteria : Dosa and idlis.
3. Microbes as the source of food : e.g. SCR fleshy fruiting bodies of edible mushrooms and truffles (higher fungi).

Dairy Products :

• Curd : Lactobacillus acidophilus
• Yoghurt : Streptococcus thermophilus and Lactobacillus bulgaricus
• Buttermilk : It is the acidulated liquid left after churning of butter from curd.
• Cheese : The milk is coagulated with LAB. The curd formed is filtered to separate whey and the solid mass is then ripened with growth of mould that develops flavour in it.
  • ‘Roquefort cheese : Ripened by blue- green mold Penicillium roquefortii
  • Camembert cheese : Ripened by blue- green mold Penicillium camembertii
  • Swiss cheese : Ripened by Propionibacterium shermanii. The large holes in Swiss cheese are developed due to production of a large amount of CO₂

Role of Microbes in Industrial Production-

Useful products produced during fermentation : Alcoholic beverages, organic acids, vitamins, growth hormones, enzymes, antibiotics and other molecules of medical significance are produced.

Statins produced by yeast Monascus purpureus are blood cholesterol lowering agents. They are competitive inhibitors of the enzyme that catalyzes synthesis of cholesterol.

1. Production of alcoholic beverages :

• Alcoholic beverages are produced by fermentation : liquors like beer, Whisky and wine.
• Saccharomyces cerevisiae var. ellipsoidis (Brewer’s Yeast) is used for fermenting malted cereals and fruit juices to produce ethanol.
• The beverages produced without distillation : Wine and Beer
• The beverages produced with distillation : Whisky, brandy and rum

Traditional drinks :
a. Toddy : Made by fermenting the sugar sap extracted from palm plants and coconut palm.
b. Fenny : Made by fermenting fleshy pedicels of cashew fruits.

2. Production of organic acids :
Microbes are used in the production of a number of organic acids.

• Aspergillus niger – Citric acid
• Aspergillus niger – Gluconic acid
• Rhizopus arrhizus – Fumaric acid
• Acetobacter aceti – Acetic acid (vinegar)

3. Production of vitamins :

(1) Vitamins : Organic nitrogenous compounds capable of performing many life-sustaining functions inside our body.
(2) Examples of vitamins : Thiamine, riboflavin, pyridoxine, folic acid, pantothenic acid, biotin, vitamin B₁₂, ascorbic acid, beta-carotene (provitamin A) and ergosterol (provitamin D).
(3) Vitamins are manufactured by fermentation using different microbial sources :

• Vitamin B₂ – i. Neurospora gossypii
  ii. Eremothecium ashbyi
• Vitamin B₁₂ – Pseudomonas denitrificans
• Vitamin C – Aspergillus niger

4. Production of Antibiotics :

(1) Antibiotics are secondary metabolites produced in small amounts by certain microbes (like bacteria, fungi and few algae), which inhibit growth of other microbial pathogens.
(2) They are used in treatment of deadly diseases like plague, whooping cough, diphtheria, leprosy, etc.
(3) Some common antibiotics and their microbial sources are as follows :
(4) Different antibiotics produced from following microbes:

• Chloromycetin → Streptomyces venezuelae
• Erythromycin → Streptomyces erythreus
• Penicillin → Penicillium chrysogenum
• Streptomycin → Streptomyces griseus
• Griseofulvin → Penicillium griseofulvum
• Bacitracin → Bacillus lichenijormis
• Oxytetracycline, Terramycin → Streptomyces aurifaciens

5. Production of Enzymes :

(1) Enzymes : Enzymes are biocatalyst proteins which accelerate biochemical processes.
(2) Uses of enzymes in various industries :

• Textile industry : To improve the quality of the fabrics.
• Pulp and paper industry : Biomechanical pulping and bleaching.
• Food industry : Fermentation for the production of bread and drinks such as wine and beer,
• Detergent industry : Lipase is used because of superior cleaning properties, to increase the brightness and to remove oil stains.
• The extraction of substances like carotenoids and olive oil.
• Enzymes are also used in cosmetics, animal feed and agricultural industries, among others.
• Streptokinase has fibrinolytic effect. Hence, it is used as a ‘clot buster’ in blood vessels of heart patients.

(3) Examples of microbial sources from which enzymes are produced :

• Saccharomyces cerevisiae – Invertase
• Sclerotinia libertine, Aspergillus niger – Pectinase
• Candida lipolytica – Lipase
• Trichoderma konigii – Cellulase
• Streptococcus spp. – Streptokinase

6. Gibberellin production :

(1) Gibberellin is a growth hormone produced by higher plants and a fungus named Giberella.
(2) Practical applications :

• To induce parthenocarpy in apple, pear, etc.
• Used in breaking the dormancy of seed and also in inducing flowering in Long Day Plants (LDP).
• To enlarge the size of grape fruits.

Microbes in Sewage Treatment –

1. Composition of Sewage carried out in drainage :

• Sewage consists of about water (99.5% to 99.9%) and inorganic and organic matter (0.1 to 0.5%) in suspended and soluble form.
• Composition of sewage varies depending upon the type of waste discharged into water from different industries.
• It includes human excreta, household waste, dissolved organic matter and even pathogenic microbes, discharged water from hospital waste, slaughter house waste, animal dung, discharge from industriad waste (contains toxic dissolved organic and inorganic chemicals), tannery, pharmaceutical waste, etc. also add to sewage.
• It contains bacteria from soil and pathogenic microorganisms (bacteria, viruses and protozoa) causing dysentery, cholera, typhoid, polio and infectious hepatitis and soil bacteria.
• Bacteria in sewage include coliforms, fecal Streptococci, anaerobic spore forming Bacilli and other types originating in the intestinal tract of humans.

2. Sewage treatment process includes four basic steps:

• Prelinfinary Treatment: It Includes Screening and Grit Chamber.
• Primary treatment (physical treatment) : It involves treatment of sewage in primary sedimentation tanks.
• Secondary treatment (biological treatment): It includes treatment of sewage in aeration tanks.
• Tertiary treatment : It involves passage of sewage water through settling tank and anaerobic sludge digesters.

Microbes in Energy Generation-

1. Biogas is a mixture of methane CH₄ (50-60%), CO₂ (30-40%), H₂S (0-3%) and other gases (CO, N₂, H₂) in traces.

2. Substrates used for biogas production : Cattle dung (most commonly used substrate, a rich source of cellulose from plants), plant wastes, animal wastes, domestic wastes, agriculture waste, municipal wastes, forestry wastes, etc.

3. Biogas Production :

• Most commonly used models of biogas plants are developed by KVIC (Khadi and Village Industries Commission) and IARI (Indian Agricultural Research Institute).
• A typical biogas plant consists of digester and gas holder.
• Anaerobic digestion involves three processes : Hydrolysis or solublization, acidogenesis and methanogenesis.

4. Benefits of biogas :

• Biogas is a cheap, safe and renewable source of energy.
• It can be easily generated, stored and transported.
• It can be used for domestic lighting, cooking, street lighting as well as small scale industries.
• It burns with blue flame and without smoke.
• It helps to improve sanitation of the surrounding.
• It is eco-friendly and does not cause pollution.
• Sludge which is left over is used as a fertilizer.

Role of Microbes as Biocontrol Agents-

1. Biocontrol or biological control : It is the natural method of eliminating and controlling insects, pests and other disease-causing agents by using their natural, biological enemies.

2. Biocontrol agents : Microbes (bacteria, fungi, viruses and protozoans) act as biocontrol agents in three ways : they cause the disease to the pest or compete or kill them.

3. Some examples of Microbial bio-control :

• Bacillus thuringiensis (Bt) : It is used to get rid of butterfly, caterpillars.
• Trichoderma species : Effective bio-control agents against soil borne fungal plant pathogens.

4. Microbial Pesticides and their host:

5. Bioherbicides : They kill the weeds which compete with the main crop in the farm – land for water, space, minerals, light, air, etc. and also act as collateral hosts for several pathogens.
(1) Pathogenic fungi as mycoherbicides :

• Phytophthora palmivora – controls milk weed in orchards.
• Alternaria crassa – controls water hyacinth.
• Fusarium spp. – control most of the weeds.

(2) Bacterial pathogen as herbicides :

• Pseudomonas spp. – attacks several weeds
• Xanthomonas spp. – attacks several weeds
• Agrobacterium spp. – attacks several weeds

(3) Insects as herbicides :

•  Tyrea moth – controls the weed Senecio jacobeac
• Cactoblastis cactorum – controls cacti weeds.

Role of Microbes as Biofertilizers-

1. Fertilizers are the nutrients required for plant growth and increase the productivity of cultivated plants.
2. Types of fertilizers :

• Inorganic fertilizers : They are synthetic fertilizers consisting of mineral salts of NPK mixed in specific proportion. If used excessively, they cause pollution of soil, air and groundwater.
• Organic fertilizers : They are biological in origin and include farm yard manure (FYM), compost and green manure.

3. For better and sustainable agricultural production, organic farming is practised and biofertilizers are used.

4. Biofertilizers include bacterial, cyanobacteria and fungi :

• Bacterial biofertilizers : These include bacteria and cyanobacteria
• Fungal biofertilizers

5. Types of Biofertilizers on the basis of nature and function :

(1) N₂ fixing Biofertilizers :

• The nitrogen fixing microorganisms (diazotrophs) convert atmospheric nitrogen into nitrogenous compounds like nitrites and nitrates via ammonia.
• Symbiotic N₂ fixing microorganisms : e.g. Rhizobium, Frankia.
  These are mostly associated generally with roots of higher plants.
• Free-living or Non-Symbiotic N2 fixing microorganisms : e.g. Azotobacter, Clostridium, Beijerinkia, Klebsiella, etc.

(2) Phosphate solubilizing biofertilizers :

• These bacteria solubilize the insoluble inorganic phosphate compounds.
• e.g. Pseudomonas striata, Bacillus polymgxa, Agrobacterium, Microccocus, Aspergillus spp. etc.

(3) Compost making biofertilizers :

• In the composting process microorganisms break down organic matter into dark rich compost or humus.
• Microorganisms found in active compost: Bacteria, fungi, actinobacteria, protozoa and rotifers.

6. Cyanobacteria as biofertilizers :

• They may be free-living or symbiotic, heterocystous or non-heterocystous forms.
• Free living cyanobacteria : e.g. Anabaena, Nostoc, Plectonema, Oscillatoria.
• Symbiotic cyanobacteria associated with lichens : Anabaena, Nostoc and Tolypothrix.
• Symbiotic cyanobacteria associated with plants Azolla and Cycas : Anabaena.

7. Fungal biofertilizers :

(1) Mycorrhiza is a fungus which forms symbiotic association with the rhizomes and root of higher plants occurring in thick humid forests.

(2) Two types of mycorrhizal :

• Ectomycorrhizae : Mycelium of these fungi form mantle on the surface of the roots.
• Endomycorrhizae : They grow in between and within the cortical cells of roots.

(3) Benefits of Mycorrhiza :

• Selective absorption of P Zn, Cu, Ca, N, Mn, Br and Fe.
• Enhance water uptake.
• Induce growth by secreting hormones.
• Offer protection to host plant from other microbes, by secreting antibiotics.

(4) Nowadays, mycorrhiza are classified into 8 different types : Ectomycorrhizae,

Endomycorrhizae, Ectendo mycorrhizae, Orchidaceous mycorrhizae, Ericoid mycorrhizae, Arbutoid mycorrhizae, Monotrapoid mycorrhizae and Ophioglossoid mycorrhizae.

8. Biofertilizer microorganisms :

• Rhizobia : Nitrogen fixing bacteria in root nodules of leguminous plants.
  e. g. R. leguminosarum is specific to pea and R. phaseoli is specific to beans.
• Azotobacter: Free living, nitrogen fixing bacterium associated with roots of grasses and certain plants.
• Azospirillum: Free living, aerobic nitrogen fixing bacterium associated with roots of corn, wheat and jowar.
• Anabaena : Filamentous nitrogen fixing cyanobacteria that forms symbiotic relationships with certain plants, such as the coralloid roots of Cycas and Anthoceros thallus. It has Heterocysts (Specialized colourless cells which are the sites for nitrogen fixation). It also fixes nitrogen in free living conditions.
• Azolla : A free-floating water fern. Anabaena present in the dorsal leaf lobe fixes nitrogen.

9. Benefits of Biofertilizers :

• Low cost and can be used by marginal farmers.
• Free from pollution hazards.
• Increase soil fertility.
• BGA secret growth promoting substances, organic acids, proteins and vitamins.
• Azotobacter supply nitrogen and antibiotics in the soil.
• Biofertilizers increase physico-chemical properties of soil-like texture, structure, pH, water holding capacity of soil by providing nutrients and organic matter.

Know the Scientist:

1. Dr. Norman E. Borlaug : Known as ‘Father of the Green Revolution’, ‘Agriculture’s greatest spokesperson’ and ‘The Man Who Saved a Billion Lives’.
A 1970 Nobel Laureate.
He saved millions of lives from famine in India, Mexico and the Middle East.

2. Dr. M. S. Swaminathan : Known as ‘Father of Green Revolution in India’.
He introduced and developed high-yielding varieties of wheat in India.
He is pioneer in mutation breeding in India.
He developed new varieties of wheat like Sarbati, Sonora and NP165.
He advocated environmentally sustainable agriculture, sustainable food security and the preservation of biodiversity.

By going through these Maharashtra State Board Bookkeeping and Accountancy 11th Notes Chapter 6 Bank Reconciliation Statement students can recall all the concepts quickly.

Maharashtra State Board 11th Accounts Notes Chapter 6 Bank Reconciliation Statement

Meaning, Importance, And Utilities of Accounting Documents-
The documents which explain all the basic facts (information) of cash and banking transactions such as the date, amount, parties, and purposes of transactions are called Accounting documents. Accounting documents also provide evidence of financial transactions on account of the introduction and increasing use of the Internet and mobile banking, the functioning of the modern bank has undergone a drastic change. Payments and receipts of cash through the internet and mobiles generate instant and automatic evidence useful for concerned parties. Even today payments and receipts are made through cheques and drafts. Similarly a large number of banking transactions are completed by the account holders through visiting the banks.

Types of Bank Documents-
1. PAY-IN-SLIP: Pay-in-slip is an important source document used by the account holder for depositing cash as well as cheques into the bank account. A pay-in-slip book consists of 10 slips or 100 slips. Each slip is divided into two parts, each of which can be separated easily from the other. The longer part of the slip is called foil and the smaller part is called counterfoil.

Before depositing cash or cheque into the bank, account holder is required to fill up both the parts of pay-in-slip. Information regarding name of the account holder, his account number, amount in figures and words, signature, etc is required to be filled up on both the parts of the pay-in-slip. The cashier of the bank accepts cash or cheque along with the duly filled up pay-in-slip. The foil of pay-in-slip remains with the bank for making records in the books of the bank and the counter foil after stamping and signature of the cashier is given back to the account holder for his own reference. Separate pay-in-slips are used for depositing cash and cheque.

The pay-in-slip is a bank printed form provided by the bank free of charge to the account holders to facilitate them to deposit cash or cheque into the bank. On the basis of slip entries are made in the cash book as well as in the bank passbook.

Contents: The pay-in-slip contains the following details:

• Name of the bank and its branch. Usually, they are printed.
• Date of banking transaction.
• Name of the account holder.
• Account No.
• Types of Account.
• Amount deposited in words as well as in figures.
• Form of amount deposited i.e. cheque/cash.
• Signature of the depositor.
• Signature of officer in charge and stamp of bank.
• On the backside of the pay-in-slip, the details of cash or cheque deposited are given.

(a) Specimen form of pay-in-slip is given below: From side.

(b) Reverse (Back-side) of Pay-in-Jip :

Withdrawal Slip:
A source document which is used by the account holder for withdrawing cash from the bank is called withdrawal slip. It is used to withdraw the amount from Savings Account. Before withdrawing cash from the bank, an account holder is required to fill up a withdrawal slip. Information regarding the name of the account holder, his account number, amount in figures and in words, date, signature, etc. are required to be filled up. The account holder is also required to sign on the back of the withdrawal slip. Both the signatures made on withdrawal slip must be matched with the specimen signature recorded in the computer. This is to avoid malpractices.

A person other than an account holder can also withdraw money with the help of a withdrawal slip. In such case, a person appointed to withdraw the money is required to sign on the reverse of the withdrawal slip below the signature of the account holder. While withdrawing the money from the bank, the withdrawal slip must be accompanied by the bank passbook. An account holder is not allowed to carry withdrawal slips outside the bank premises. It is a bearer document. This is because the person holding duly filled in and signed by the account holder can easily withdraw the amount from the bank by signing on the backside. In the case of use of withdrawal slip, account holder gets no document from the bank on such withdrawal.

Contents: Withdrawal slip contains the following details:

• Name of the Bank and its branch. They are generally printed.
• Date of withdrawal of cash.
• Name of the account holder.
• Account Number.
• Amount in words as well as in figures.
• Signature of account holder.

Specimen form of a withdrawal slip is given below.

Bank Pass Book:
A bank passbook is a small booklet given by the bank to the account holder free of charge. In the passbook, an account holder’s transactions with the bank are recorded by the banker chronologically. A passbook is a copy of ledger account appearing in the books of bank. The entries in the passbook are made by the banker.

Nowadays printed entries in the passbook are made through computer. This book has a number of pages and on each page, there are several columns like Sr. No., date, particulars, cheque or withdrawal slip nos., amount deposited, amount withdrawn, balance amount and initials of bank clerk, etc. An account holder is required to carry a bank pass book whenever he goes to bank for a transaction. The bank passbook serves as an identity of the account holder. Account holder cannot pass any entry or make any changes on the Bank passbook.

Importance:

• Bank passbook shows the balance of amount i.e. standing position of account holder with the bank on a particular date.
• It is a documentary proof accepted as an evidence of banking transactions in the court of law.
• It gives confirmation by the bank that all the transactions are made through the bank.

Contents:

• Date of transaction.
• Particulars regarding banking transactions.
• Cheque No.
• Amount withdrawn from the bank.
• Amount deposited into the bank.
• Balance amount.
• Signature of Bank clerk or officer.

Specimen form of the Bank Pass Book is given below:

Bank Statement:
A statement which shows the details of the banking transactions of the account holder during a specific period of time is called a bank statement. It is issued by the banker to its current account holders every month or after a fixed interval of time. It is usually issued by the bank at the end of every month. It may be issued by the bank whenever demanded by the current account holders. It substitutes to the bank passbook.

The current account holder gets a bank statement in place of the bank passbook. Nowadays, many schedule bank instead of issuing the bank passbook, issues a bank statement to its current account holders as well as savings account holders. Periodical information about the deposits of money and cheques in the bank account, withdrawals, issue of cheques opening balance and closing balance, etc., are recorded in the bank statement. Information provided in the bank statement is useful to the account holder to prepare his business plans.

Under computerised accounting system, the printouts of the bank statement are issued to Current Account holders.

Importance:

• The Bank statement provides the information to current account holder about his banking transactions and balance position with the bank.
• By referring bank statement businessman makes arrangement for payments.
• By referring bank statement, the businessmen can try to arrange for overdraft facility from the bank.
• Businessman knows about the clearing of the cheque deposited and issued.

Contents:

• Date of banking transactions.
• Particulars of banking transactions entered.
• Cheque numbers.
• Withdrawal slip nos.
• Amount deposited into the bank.
• Amount withdrawn from the bank.
• Balance amount.

Specimen of Bank Statement is given below:

Bank Advice: Bank advice is a statement or source document prepared and issued by the bank to inform the account holder that his account has been debited or credited for the amount specified therein. If an account holder gives instructions in writing to the bank to pay certain business expenses like insurance premium, share call money, electricity bill, telephone charges, etc., the bank accordingly makes payments and debits the account of the account holder. Similarly, the bank also collects the earnings as well as incomes like salaries, rent, commission, dividend, discount, etc., of the account holders as per their instructions on their behalf and credit their accounts for the amount so collected.

When a bank makes payments to account holders, it issues debit advice to the concerned account holder to inform that his account has been debited for the payments so made by the bank. A Debit advice is also issued by the bank whenever the bank deducts certain charges or commission from the balance amount of the account holder with the bank for the services rendered. Similarly, when a bank collects the fund as per instructions of the account holder from various parties, it issues a credit advice to the concerned account holder to inform that his account has been credited for the account so collected.

Importance:

1. After receiving debit advice and credit advice, the businessman can update his records from time to time.
2. Bank advice serves as an evidence of the transaction made through bank.

Specimen of a bank advice is given below:

Bank Reconciliation Statement-
1. Introduction: When a businessman opens and operates a current account in a bank, he gets a bank passbook, cheque book and a pay-in-slip book free of charge from the bank to operate his bank account. The bank opens the account holder’s account in its ledger and enters therein all the banking transactions carried on with the account holder. The bank passbook is a small booklet in which banking transactions of account holder are recorded by the bank in chronological order.

Thus, the account holder’s banking transactions are recorded in two different books viz. first they are recorded by businessman (i.e. by account holder) in his three column cash book under bank column and secondly they are recorded in the bank passbook by the bank from the bank ledger. For instance, if an account holder has issued a cheque of ₹ 500 in favour of Mr. Sachin S. Shetty, it is first recorded in the three column cash book on credit side under bank column by account holder and then it is recorded on the debit side of bank passbook by the bank soon after it is paid by the bank. When all the banking transactions of account holder are systematically recorded in the cash book and in the passbook, then balance shown by cash book and balance shown by bank passbook as on particular date must agree with each other.

Many a times bank balance shown by passbook and bank balance shown by cash book do not tally with each other. The account holder prepares a statement showing causes of disagreement between two balances usually at the end of every month.

2. Meaning: Bank Reconciliation Statement is a statement which attempts to explain causes of disagreement of balance shown in cash book and balance shown in Bank passbook. In short a Bank Reconciliation Statement is a statement prepared to disclose causes of difference between the balances shown by cash book and passbook. Importance of Bank Reconciliation Statement lies in the fact that it ensures that the bank balance shown. by cash book is reconciled with that of the bank passbook.

Definition: “A statement which is prepared to reconcile the difference between the balance shown by bank column of cash book and balance shown by bank passbook and also showing causes of disagreement of these two balances is called Bank Reconciliation Statement.”

3. Need And Importance of Bank Reconciliation Statement-

• Proper Records: Bank Reconciliation Statement serves a check or follow up on the banker whether the bank is making proper entries in the passbook for cheque or money deposited into the bank and amount withdrawn or cheques issued from the bank.
• Explanation of Causes of Disagreement: Bank Reconciliation Statement, explains and clarifies the causes of disagreement between the balance shown in the cash book under bank column and the balance shown in the passbook.
• Rectification of Errors or Omissions: Bank Reconciliation Statement helps to rectify the mistakes or omissions that take place in the books maintained by the banker as well as the customer.
• Confidence in Bank: In the absence of a Bank Reconciliation Statement, a customer will lose confidence in the bank, because the customer cannot be sure of the correctness of the bank balance depicted in the bank passbook.
• Reduction in the chances of frauds: The Bank Reconciliation Statement helps to reduce the chances of frauds committed by the staff handling the cash.
• Delay in collection of cheques: The Bank Reconciliation Statement explains any delay in the collection of cheques.

Reasons For Differences in Balances-

Reasons or causes responsible for difference in balance shown by passbook and balance shown by cash book are explained below:
1. Some of the banking transactions are entered in the cash book and pass book on different dates, e.g. as soon as cheques are sent to the bank, entries are made in the cash book. But the bank records the same in the passbook only when the cheques are realised, (cheques are deposited but not cleared), then on the date of deposit of the cheques, bank balance in cash book will go up. But passbook balance will not go up, and balance in passbook appears as it is.

2. If some mistakes or omissions are committed by the bank clerk in the pass book or if mistakes or omissions are committed by the businessman in recording business transactions in the three column cash book, then there will be a difference in the balance shown by the passbook and the balance shown by cash book.

3. If banking transactions are entered twice by the bank clerk in the passbook or if they are entered twice by businessman in his cash book, then difference in bank balance in cash book and balance in bank passbook are bound to occur.

4. If banking transactions are recorded by a businessman on the wrong side or in the wrong column of the three-column cash book, difference between balance shown by pass book and cash book are bound to occur.

5. The difference between the balance shown by the Cashbook under Bank column and the balance shown by the passbook also occurs on account of the following reasons:

• When cheques are issued but not presented for payment.
• When direct deposit is made into the bank by the client. .
• Dividend/Interest/Commission collected by the bank but not shown in the cash book.
• Bank charges/direct payment to clients made by the Bank, but not shown in the cash book.
• Dishonour of cheque intimation not received from the bank to record in the cash book.

Specimen Form of Bank Reconciliation Statement-

Bank Reconciliation Statement as on 31st March, 2004-

Formulae of Bank Reconciliation Statement:

(A) When bank balance as per Cash Book is given:

• Cheque issued but not presented for payment.
• Interest and dividend collected by the bank and credited in the passbook, but are not recorded in the cash book
• Direct deposit made by the customer into the bank and credited in the passbook.
• Interest on deposit allowed by the bank and credited in the passbook, but not recorded in the cash book.

Less:

• Cheque deposited into the bank but not realised.
• Commission and bank charges debited by the bank in the passbook but same are not recorded in the cash book.
• Insurance premium or any other expenses paid by the bank recorded in the passbook but is not recorded in the cash book.
• Dishonour of a bill or cheque, recorded in the bank passbook, but not entered in the cash book.

(B) When Overdraft as per Cash Book is given :

Add:

• Cheque deposited into the bank but not realised.
• Commission and bank charges debited by the bank in the passbook but same are not recorded in the cash book.
• Insurance premium or any other expenses paid by the bank and debited in the passbook but is not recorded in the cash book.
• Dishonour of a bill or cheque, recorded in the bank passbook, but not entered in the cash book.
• Interest on Bank overdraft debited in passbook only.

Less:

• Cheque issued but not presented for payment.
• Interest and dividend collected by the bank and credited in the passbook but not recorded in the cash book.
• Direct deposit made by the customer into the bank and credited in the passbook but not entered in the cash book.
• Interest on deposit allowed by the bank and credited in the passbook, but not recorded in the cash book.

(C) When Bank balance as per pass book is given:

Add:

• Cheque deposited into the bank but not realised.
• Commission and bank charges debited in the passbook by the bank, but same are not recorded in the cash book.
• Insurance premium or any other expenses paid by the bank and debited in the passbook but same is not recorded in the cash book.
• Dishonour of cheque or bill of exchange recorded by the bank in passbook but not entered in the cash book.

Less:

• Cheque issued but not presented for payment.
• Interest and dividend collected by the bank and credited in the passbook but not recorded in the cash book.
• Direct deposit made by customer into the bank and credited in the passbook but not entered in the cash book.
• Interest on deposit allowed by the bank and credited in the passbook, but not recorded in the cash book.

(D) When Overdraft as per pass book is given:

Add:

• Cheque issued but not presented for payment.
• Interest and dividend collected by the bank and credited in the passbook but not recorded in the cash book.
• Direct deposit made by customer into the bank and credited in passbook but not entered in the cash  book.
• Interest on deposit allowed by the bank and credited in the passbook but not recorded in the cash book.

Less:

• Cheque deposited into the bank but not realised.
• Commission and bank charges debited in the passbook by the bank but same are not recorded in the cash book.
• Insurance premium or any other expenses paid by the bank and debited only in the passbook.
• Dishonour of cheque or bill of exchange recorded by the bank in the passbook but not entered in the cash book.
• Interest on Bank overdraft debited in passbook only.

Position in Cash Book

• Bank balance as per cash book means debit balance as per cash book.
• Overdraft as per cash book means credit balance as per the cash book.

Position in Pass Book

• Bank balance as per pass book means credit balance as per passbook
• Overdraft, as per pass book means debit balance as per pass book,

(B) Method to ascertain items to be added to and deducted from balance.

By going through these Maharashtra State Board Bookkeeping and Accountancy 11th Notes Chapter 4 Ledger students can recall all the concepts quickly.

Maharashtra State Board 11th Accounts Notes Chapter 4 Ledger

Meaning And Definition of Ledger-

(i) Meaning : Ledger is another important and principal book of accounts in which a businessman keeps individual records of persons, properties, expenses, incomes, gains and losses. It is the end point of entries made in the journal, or subsidiary books. Ledger may be in the form of a bound register or cards or separate sheets may be attached and maintained in a loose leaf binder. For every person with whom the business keep dealings, a separate account is prepared in the ledger. Similarly, a separate account is maintained in the ledger for each kind of assets, expenses, losses and gains.

As and when business transactions occur, they are first recorded in the journal and subsequently those recorded entries from journal are transferred and posted to the respective account in the ledger. Each ledger account is totalled at the end of the accounting period. This book contains many pages and each page is called ledger folio. The relationship between the business and a particular account on given date can be ascertained only from the ledger. For example, if a businessman wants to know on a particular date the amount due from a certain customer or debtor, it can be known easily only from the ledger. Various transactions pertaining to different dates of a particular account may be spreaded over in the journal on various pages but in the ledger they are found on one page.

Ledger is also called as book of final entry. The word ‘Ledger’ is originated from the Latin word ‘Ledger’ which means ‘to contain.’ Ledger is the collection of all the account. Ledger contains all the account opened and operated.

(ii) Definition: According to S.P. Jain’s and K.L. Narang’s Advanced Accountancy,
“A Ledger Account may be defined as a summary statement of all the transactions relating to persons, assets, expenses and revenues, which have to be taken place during a given period of time and show their net effect.” According to the Oxford Dictionary, ledger is the main record of the accounts of a business, traditionally, a ledger was a large book with separate pages for each account. In modern systems ledger may consist of separate cards or computer records.

Importance of Ledger-

Importance of Ledger is explained as follows :

• Ledger is useful for maintaining individual records of person with whom the business keep dealings.
• It keeps records of every item of properties, expenses, incomes, gains and losses.
• Amount due from various debtors can be known easily and quickly from the ledger. This will help the businessman to send reminders to recover the outstanding amount due from the debtors.
• Amount due to suppliers or creditors can be known easily and quickly to make timely payments to gain their confidence.
• Trial balance can be prepared easily on the basis of balances ascertained from the ledger accounts. Therefore ledger is necessary for preparation of trial balance.
• It is easier to prepare business planning and strategies on the basis of balances shown by the ledger accounts.
• The financial position of the business can be easily known by referring to balances of various assets and liabilities.
• Various income statements can be prepared on the basis of the balances shown by the ledger accounts.
• Ledger is useful tool to control various expenses because ledger shows accounts of various expenses with total amount spent on them.
• Ledger facilitates the management to get classified information of various accounts such assets, liabilities, capital etc. They can easily prepare plans for various business activities.
  Ledger also facilitates decision making process.

Contents of A Ledger-

The contents of a ledger are explained as below:
A ledger contains many pages and each page is called ledger folio. Each page of a ledger is serially numbered. Each ledger account has two main sides viz. left hand side which is called the debit side and right hand side which is called the credit side. A list of ledger account in alphabetically order is given on the first page of a ledger which is called as an ‘Index’. Each side has four sub-columns. These sub-columns are:

• Date Column: In this column, the date of transaction is written. Date of transaction is written in order of year, month and date. In the beginning of each page the year, month and date are written. For subsequent transactions on the same page only dates are written for the same month and year.
• Particulars Column: In the particulars column the name of the account is written. In the particulars column on the debit side of the account, the name of the account to be credited is written and on the credit side in the particulars column, the name of the account to be debited is written.
• Journal Folio No. Column: In Journal Folio No. (J.F. No.) column of the ledger, the page number of the journal from which the entry is posted is recorded in red ink for cross reference. By referring to the journal page as shown in the ledger, a businessman can understand the nature of transaction by
• reading the journal entry and narration.
• Amount Column: In this column the amount of the transaction is entered in figures.

Specimen of The Ledger :

Steps to be Taken For Preparation of Ledger Account:
(1) At the top of ledger, in the middle, the name of the account should be written.

(2) The date of transaction should be written in date column in the same order as we record in the journal.

(3) In the particulars column on the debit side of the ledger account the name of account credited is written and in the particulars column on the credit side of ledger account, the name of account debited is written. For example the following journal entries are posted in the cash account as follows:

(4) Opening balance of ledger account should be shown as Balance (b/d). Real account like Cash A/c, Furniture A/c, Goods A/c, Machinery A/c. etc. always show debit balances, and liabilities like Capital A/c, Sundry Creditor’s A/c. Bank Loan A/c, etc. always show credit balances.

Posting of Entries From Journal And Subsidiary Books to Ledger-

(i) Posting of entries from journal to ledger :
Transferring or recording journal entries from journal to the respective ledger account is called ledger posting. Ledger posting implies entering the information in the ledger from journal for individual records. Ledger posting is done from time to time by the accountant. The account credited is posted on the credit side of that account and account debited is posted on the debit side of the same account. Process of ledger posting is continued throughout the year. At the end of the financial year all ledger accounts are closed and thereafter they are totalled and balanced.

(ii) Posting” of entries from subsidiary books to ledger:

(1) Single column and double column cash book: While posting the entries from single column and double columns Cash book, Cash Account and Bank Account are not opened. Cash column and Bank column are served as Journal as well as Ledger. Each Person’s Asset’s Account is opened and entries passed on the debit side of cash book are posted to credit side of Person’s A/c or Asset’s A/c. Similarly entries appeared on the credit side of cash book are posted to debit side of related Person’s A/c or Asset’s Account.

(2) Purchase Book: The total of posted to Purchases at the end of the month or year is posted to Purchases Account on the debit side as ‘To Sundries as per Purchases book”. Each Supplier’s Account is opened and related entries are recorded on the credit side as “By Purchases A/c.”

(3) Purchase Return Book / Return Outward Book: The total of Purchase Return Book is posted to Purchase Return A/c as “Sundries as per Purchase Return Book”. Each Supplier’s account is debited with the account of goods returned as ‘To Purchase Return A/c.”

(4) Sales Book: The total of Sales book at the end of month or year is posted to Sales A/c on the credit side as “By Sundries as per Sales Book”. Each Customer’s Account is opened and related entries are recorded on the debit side as ‘To Sales A/c”.

(5) Sales Return Book: The total of Sales Return Book is posted, to debit side of Sales Return Account as ‘To Sundries as per Sales Return Book”. Each Customer’s A/c is credited with the amount of goods returned as “By Sales Return A/c”.

(6) Journal Proper: Each entry from journal is posted to respective Account in the ledger.

Balancing of Ledger account-
Balancing of ledger account means finding the difference between the heavier total, and lighter total of ledger account and recording that difference on lighter total side.
At the end of the accounting year all accounts operated in the ledger are totalled and balanced.
Steps required for balancing of ledger account are given below:

• First do totalling of debit side and credit side of ledger account separately on rough sheet.
• Find out difference by subtracting lighter total from heavier total. Such difference is called balance.
• Draw a single line before making the totals.
• Draw double lines across the amount column after the totals are made.
• If total of debit side of ledger account is heavier than total of credit side of that account, the balance is called debit balance and is written on credit side (i.e. on the side where total is lighter) as “By Balance (c/fd.) or (c/d)”.
• If total of credit side of ledger account is heavier than total of debit side of that account, the balance is called credit balance, and is written on debit side (i.e. on the side where total is lighter) as “To Balance (c/fd) or (c/d),”
• Last year’s closing balance, becomes opening balance of current year. If there is debit balance it should be shown on debit side of concerned account as “To Balance (b/d) or (b/fd)” and vice versa.

Preparation of Trial Balance-
(i) Introduction: As and when business transactions take place, the same are first recorded in the journal in the summarised form and subsequently they are posted to respective ledger accounts. This in short is known as journalisation and ledger posting respectively. This process of normalisation and ledger posting are continuously done throughout the accounting year and then at the end of the accounting year all ledger accounts are closed, totalled and balanced.

On totalling and balancing, some ledger accounts show debit balances and some ledger accounts show credit balances. In rare cases some ledger account do not show any balance. After this process, a statement is prepared by businessman or accountant wherein total of debit side and credit side of every ledger account or net balance shown by every ledger account is systematically recorded to ascertain arithmetical accuracy and to detect errors or frauds committed in the business. This statement is called the trial balance.

(ii) Meaning: Trial balance is an abstract or list of all the ledger accounts as on a specified date showing debit total and credit total of all the accounts or their balances. A trial balance may be prepared on any date, but it must be prepared by a businessman at the close of the accounting year.

(iii) Definitions: (1) “It is the final list of balances, totalled and combined.” – Rolland
(2) “It is a list of abstract of the balances or of total debits and total credits of accounts in a ledger, with the purpose being to determine the equality of posted debits and credits and to establish a basic summary for financial statements.” – Eric Kohler.

(iv) Types of Trial Balance: A trial balance can be prepared in one of the following two forms, viz.
(i) Gross trial balance, and
(ii) Net trial balance. Each of them is discussed below:

(i) Gross Trial Balance: Gross Trial Balance is a type of trial balance in which total of debit column and total of credit column of all ledgers are recorded and posted in respective columns of trial balance. Gross trial balance is prepared by transferring the total of debit column and total of credit column from each ledger account and posted and entered in the respective columns of the trial balance. Gross Trial Balance is not so popular or common in the business world.

(ii) Net Trial Balance: Net trial balance is a type of trial balance in which net balance shown by each ledger account is systematically transferred and recorded. Net trial balance is prepared by transferring net balance shown by ledger accounts in respective columns, i.e. debit balance in debit column and credit balance in credit column of the trial balance. Ledger account which does not show balance is not transferred to trial balance. Net trial balance is more common and popular in the business world. It is extensively used by the business people.

The following illustration will explain the difference between Gross trial balance and Net trial balance.

(v) Methods of preparing trial balance :
Trial balance can be prepared in any one of the following 2 forms : (i) Vertical or Journal form of Trial Balance and (2) Horizontal or Ledger form of Trial Balance.

(1) Vertical or Journal Form of Trial Balance

Explanation of columns:

• Particulars Column: In this column name of account is written.
• Ledger Folio (L.F.): In this column page number of ledger from where balance is extracted and transferred to trial balance is written.
• Debit balance: In this column accounts having debit balances are written in figures.
• Credit balance: In this column accounts having credit balances are written in figures.
• After writing all the balances in debit column and credit column, amounts written in debit column and amounts written in credit column are totalled separately. If the total of debit column agrees with the total of credit column, it is said that trial balance is tallied.

(2) Horizontal or Ledger Form of Trial Balance:

This trial balance has two main sides viz left-hand side and right-hand side. On the left-hand side debit balances are written down and on the right-hand side, credit balances are noted down.
Each side has three columns viz. name of the accounts, L.F. No. and Amount.

Explanation of columns:
(1) Left-hand side: In the first column names of the accounts having debit balances are written.
In the second column i.e. L.F. column Page No. of Ledger from where balance is extracted and transferred to Trial balance is written. In the third column balance amount of the account is written in figures.

(2) Right-hand side: In the first column names of the accounts having credit balances are written.
In the second column i.e. L.F. column Page No. of Ledger from where balance is transferred is written.
In the third column balance amount of Account is written in figures.

(vi) Utility of Trial Balance :
(1) Trial balance is prepared to know the final balance of every account.

(2) Trial balance is prepared to ascertain arithmetical accuracy of ledger accounts. If total of debit column and total of credit column of the trial balance tallies with each other, then it is proved that, no mistakes of whatsoever nature, has been committed in writing accounts. It is also confirmed that the posting to ledger account in terms of debit and credit amount, carry forward, etc. are accurate.

(3) Trial balance is also useful for preparation of final accounts like Trading Account, Profit and Loss Account and Balance Sheet. It is also useful to prepare other important financial statements.

(4) To locate accounting errors committed in writing accounts, a trial balance is used. Trial balance will not tally if mistakes or omissions in writing accounts carry forward, etc. are committed.

(5) Trial balance provides a condensed picture of each account opened and operated in the ledger. With the help of trial balance, the position of any account prepared in the ledger can be easily known or found without referring to the ledger.

By going through these Maharashtra State Board Organisation of Commerce and Management 11th Notes Chapter 8 Introduction to Management students can recall all the concepts quickly.

Maharashtra State Board Organisation of Commerce and Management 11th Notes Chapter 8 Introduction to Management

Management-
Managerial → Derived from Italian words

• Manus – hand
• agere – to act

Meaning and Definition:

• Mary Parker Follet: “ Management is an art of getting things done through others”.
• Henry Fayol : “ To manage is to forecast and plan, to organize, to command, to co-ordinate and to control”.
• Fedrick Winslow Taylor : “ Management is knowing exactly what is to be done and seeing that it is done in the best possible manner*’.
• George Terry : “Management is the process consisting of planning, organizing, actuating and controlling, performed to determine and accomplish the objectives by the use of people and resources. ”

Characteristics of Management-

1. Management is Dynamic
2. Management is Inborn Quality
3. Management is a Social Process
4. Management is a Continuous Process
5. Management is Different from Ownership
6. Management is Intangible
7. Management is Situational
8. Management is Goal Oriented
9. Management is Universal
10. Management is a Group Activity

Level of Management-

• Top – Board of Directors, President, Chief Executive Officer, Managing Directors, etc.
• Middle – Functional Managers i.e. Finance Manage, Production Manager, Sales Manager, etc.
• Lower – Superintendents, Supervisors, Foremen, etc

Functions of Top Level Management-

1. Long term objectives
2. Frame the plans and policies
3. Implementation of policies
4. Create various epartments and positions
5. Appoint head, or Incharge, managers to carry out activities
6. Evaluate the performance of various departments.
7. Implementation of policies Functions of Middle Level Management

Functions of Middle Level Management-

1. link between top and lower level management
2. understand plans and policies framed by top management
3. prepare action plan according to the goals to achieve
4. assign duties and responsibilities to the staff
5. to train the staff for carrying out activities
6. appoint lower level staff
7. give timely report to top level management and co-ordinate departmental activities

Functions of Lower Level Management-

1. work as per instructions from middle level management /In charge
2. assign work to the subordinates
3. give instructions to subordinates
4. direct the subordinate (if necessary)
5. solve the Problems and disputes of subordinates.
6. look after repairs and maintenance of machinery, tools and equipments, etc.
7. conduct quality check of the product or service from time to time.

Management as an Art

• “Art is the bringing about a desired result through the application of skills”

Relation Between Art And Management

1. Personal Skills: Solve the resource problems by individual way
2. Creativity: Ability to find new ideas, according to changes in business situation.
3. Regular Practice: Use of different techniques and skills to deal with different people, different situations, different organizations.
4. Personal Abilities: Ability to co-ordinates the activities and guide people.

Management as a Science-

• Science refers to a systematically organized body of knowledge based on proper findings and
  exact principles and is capable of verification.

Relation Between Science And Management

1. Systematic body of Knowledge: Management Principles are based on experiments conducted through management theories and approaches
2. Use of Scientific Method of Observation: Management uses systematic methods of data collections, verification, analysis, interpretation and on this basis taking decisions.
3. Cause and Effect relationship: Management theories are also based on Cause and Effect relationship
4. Universal Applicability of Principles: Principles of Management are universal applied in any condition and situation

Management as a Profession-
A profession may be defined as an occupation backed by specialised knowledge and training and to which entry is regulated by a representative body and duly recognized by the society.

Relation between profession and Management

1. Formal Education: Formal management diploma or degree with training from management from school to work professionally
2. Code of Conduct: Managers have to follow code of conduct based on customs and traditions
3. Expertise: Manager is an expert in practicing his or her knowledge and skill
4. Registration: Managers can take the membership of Chambers of Commerce
5. Restricted Entry: No such compulsion for a manager

Word Meaning:

ancient – in early time; essential – necessary; indispensable – necessary; never ending – endless; creative
– having good imagination; optimum – maximise; techniques – method; exhaustive – complete; character – nature / personality; universal – in general; adaptation – accept tq change; procurement – to obtain; dynamic
– constant change; evaluation – to assess / to judge; static – fixed; forecast – to predict; systematic – in order / well arranged; vision – planning about future goals; utilization – effective use of something; mission – assignment; synchronization – activity of two or more things at same time; evaluate – to assess; purposeful – determined; implementation – to execute; guidance – to instruct / to direct; supervisory – to direct someone; intangible – not physically seen or touched; inherent – built in; continuity – in progression / without a break; context – with reference to topic; innovativeness – new ideas; qualitative – relating with quality; inborn – from birth; backed by – supported; skill – capability; regulated – to control; consistent – stable; practice – to use; organized – arranged in proper way; irrespective – no matter what; findings – to discover; formal education – process of education completed in school and colleges; verification – to find validity of something; stimulate – to encourage; principles – essential; functions – results; theories – judgement / beliefs; approaches – method; conclusions – opinion / judgement; analysis – to investigate / to inspect; interpretation – to review; motivate – to inspire; quantitative – related with numbers.