TU BCA Financial Accounting Master Guide: Journal Entries, Ledger, Trial Balance & Final Accounts (Solved Problem)
Author: Bhuban Subedi | Subject: Financial Accounting (CACS151) | Semester: Second Semester
In the second semester of the Tribhuvan University BCA program, Financial Accounting (CACS151) introduces computer application students to the financial reporting architecture, financial statements, and double-entry bookkeeping systems that underpin enterprise ERP software (like SAP, Oracle Financials, and Tally).
For students coming from non-management backgrounds (Science/+2 Science), Financial Accounting can seem challenging due to its unique debit-credit conventions and final statement balancing rules. In the 60-mark external TU final exam, numerical questions account for 35 to 40 marks.
In this guide, I will walk you through the Golden Rules of Accounting, the complete accounting cycle, and a fully solved 10-mark board numerical from Journal Entries to the Final Balance Sheet.
1. The Core Accounting Equation & Golden Rules
All financial transactions maintain the fundamental accounting equation:
$$\mathbf{Assets = Liabilities + Owner’s \; Equity \; (Capital)}$$
The 3 Golden Rules of Double-Entry Bookkeeping:
+-------------------+-----------------------------------+-----------------------------------+
| Account Type | Debit Rule (Dr.) | Credit Rule (Cr.) |
+-------------------+-----------------------------------+-----------------------------------+
| **Personal** | Debit the **Receiver** | Credit the **Giver** |
| *(People/Firms)* | (e.g., Ram, ABC Company) | |
+-------------------+-----------------------------------+-----------------------------------+
| **Real** | Debit what **Comes In** | Credit what **Goes Out** |
| *(Assets/Cash)* | (e.g., Cash, Machinery, Furniture)| |
+-------------------+-----------------------------------+-----------------------------------+
| **Nominal** | Debit all **Expenses & Losses** | Credit all **Incomes & Gains** |
| *(P&L items)* | (e.g., Rent, Salaries, Discounts) | (e.g., Sales, Interest Received) |
+-------------------+-----------------------------------+-----------------------------------+
2. The Complete Accounting Cycle Workflow
[1. Business Transaction]
│
▼
[2. Journal Entries (Original Entry)]
│
▼
[3. Ledger Accounts (Classification & Balancing)]
│
▼
[4. Trial Balance (Arithmetical Accuracy Check)]
│
▼
[5. Final Accounts: Trading A/C -> Profit & Loss A/C -> Balance Sheet]
3. Comprehensive Solved TU Board Examination Problem
Problem: Record the following transactions in the Journal of BCA Tech Solutions, post them into the Cash Ledger Account, and prepare the Final Trial Balance:
- Jan 1: Started business with cash of NPR 500,000.
- Jan 5: Purchased computer hardware equipment for NPR 150,000 in cash.
- Jan 10: Purchased software licenses on credit from Apex Softwares for NPR 80,000.
- Jan 18: Rendered web development services for cash NPR 120,000.
- Jan 25: Paid office rent of NPR 25,000 and staff salaries of NPR 45,000 in cash.
- Jan 30: Paid NPR 50,000 in cash to Apex Softwares on account.
Step 1: Journal Entries (Book of Original Entry)
+--------+------------------------------------------+------+------------+------------+
| Date | Particulars | L.F. | Debit (NPR)| Credit(NPR)|
+--------+------------------------------------------+------+------------+------------+
| Jan 01 | Cash A/c .......................... Dr. | | 500,000 | |
| | To Capital A/c | | | 500,000 |
| | (Being business started with cash) | | | |
+--------+------------------------------------------+------+------------+------------+
| Jan 05 | Computer Equipment A/c ............ Dr. | | 150,000 | |
| | To Cash A/c | | | 150,000 |
| | (Being equipment bought for cash) | | | |
+--------+------------------------------------------+------+------------+------------+
| Jan 10 | Software License Expense A/c ...... Dr. | | 80,000 | |
| | To Apex Softwares (Creditor) A/c | | | 80,000 |
| | (Being software bought on credit) | | | |
+--------+------------------------------------------+------+------------+------------+
| Jan 18 | Cash A/c .......................... Dr. | | 120,000 | |
| | To Service Revenue A/c | | | 120,000 |
| | (Being service revenue received in cash) | | | |
+--------+------------------------------------------+------+------------+------------+
| Jan 25 | Rent Expense A/c .................. Dr. | | 25,000 | |
| | Salary Expense A/c ................ Dr. | | 45,000 | |
| | To Cash A/c | | | 70,000 |
| | (Being rent and salary paid in cash) | | | |
+--------+------------------------------------------+------+------------+------------+
| Jan 30 | Apex Softwares A/c ................ Dr. | | 50,000 | |
| | To Cash A/c | | | 50,000 |
| | (Being partial payment made to creditor) | | | |
+--------+------------------------------------------+------+------------+------------+
| | **TOTAL** | | **970,000**| **970,000**|
+--------+------------------------------------------+------+------------+------------+
Step 2: Cash Ledger Account (T-Format)
Dr. CASH ACCOUNT Cr.
+--------+-------------------+------------++--------+--------------------+------------+
| Date | Particulars | Amount(NPR)|| Date | Particulars | Amount(NPR)|
+--------+-------------------+------------++--------+--------------------+------------+
| Jan 01 | To Capital A/c | 500,000 || Jan 05 | By Computer Equip | 150,000 |
| Jan 18 | To Service Revenue| 120,000 || Jan 25 | By Rent Expense | 25,000 |
| | | || Jan 25 | By Salary Expense | 45,000 |
| | | || Jan 30 | By Apex Softwares | 50,000 |
| | | || Jan 31 | By Balance c/d | 350,000 |
+--------+-------------------+------------++--------+--------------------+------------+
| | **Total** | **620,000**|| | **Total** | **620,000**|
+--------+-------------------+------------++--------+--------------------+------------+
| Feb 01 | To Balance b/d | 350,000 | |
+--------+-------------------+------------+-------------------------------------------+
Step 3: Trial Balance as of January 31
+---+-------------------------------+------------+------------+
| # | Account Head | Debit (NPR)| Credit(NPR)|
+---+-------------------------------+------------+------------+
| 1 | Cash in Hand (Balance b/d) | 350,000 | |
| 2 | Computer Equipment (Asset) | 150,000 | |
| 3 | Software License (Expense) | 80,000 | |
| 4 | Rent Expense | 25,000 | |
| 5 | Salary Expense | 45,000 | |
| 6 | Capital Account | | 500,000 |
| 7 | Service Revenue Account | | 120,000 |
| 8 | Apex Softwares (NPR 80k - 50k)| | 30,000 |
+---+-------------------------------+------------+------------+
| | **TOTAL (Balanced)** | **650,000**| **650,000**|
+---+-------------------------------+------------+------------+
4. Final Accounts & Balance Sheet Adjustments
In the TU final examination, the Balance Sheet question almost always includes 4 standard adjustments:
1. Closing Stock: Credited to Trading A/C and shown under Current Assets in Balance Sheet.
2. Depreciation on Fixed Assets: Debited to P&L A/C and subtracted from the corresponding asset in Balance Sheet.
3. Outstanding Expenses: Debited to P&L A/C and shown under Current Liabilities in Balance Sheet.
4. Prepaid Expenses: Subtracted from relevant expense in P&L A/C and shown under Current Assets in Balance Sheet.
Frequently Asked Questions (FAQ)
Q1: Why must the Trial Balance always match?
Because every transaction is recorded with equal debit and credit values under the double-entry bookkeeping system. If the trial balance does not match, an arithmetical, posting, or transposition error exists.
Q2: What is the difference between Capital Expenditure and Revenue Expenditure?
Capital Expenditure (e.g., buying server hardware) yields long-term benefits across multiple years and appears on the Balance Sheet. Revenue Expenditure (e.g., monthly ISP bill) maintains day-to-day operations and is fully expensed in the Profit & Loss Account.
