Page 134 - DCOM205_ACCOUNTING_FOR_COMPANIES_II

Unit 7: Accounting for Banking Companies
Ashwani Panesar, Lovely Professional University

unit 7: accounting for Banking companies notes

contents

Objectives
Introduction
7.1 Accounting for Banks
7.1.1 Non-banking Assets
7.2 Basics of Banking Accounts
7.2.1 The Difference between Accounting and Bookkeeping

7.2.2 Double-entry Bookkeeping
7.2.3 Keeping Good Accounting Records
7.2.4 Debits and Credits
7.2.5 Accounting Equations

7.2.6 Capital Receipt and Revenue Receipt
7.2.7 Depreciation
7.2.8 Bank Reconciliation
7.3 Companies’ Accounts
7.4 Important Facts

7.4.1 Balance Sheet
7.5 Summary
7.6 Keywords
7.7 Review Questions

7.8 Further Readings
objectives

After studying this unit, you will be able to:
l z Define the concept of accounting for banks

l z Discuss the basics of banking accounts
l z Explain the term Companies Accounts
l z Describe the important facts related to accounting for Banking Companies

introduction

A banking company means any company which carries on business or which transacts banking
business in India. A banking business is generally governed by the provisions of the Companies
Act 1956 and specifically by the Banking Regulation Act. The Banking regulation Act of 1949
came into force on 16 March 1949 as a result of long-felt need to regulate the banking business in
th
India and protect the interest of number of depositors. The existence of well-organised, regulated
and efficient banking system is pre-requisite for economic growth. Banks are agencies responsible

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