Professional grooming refers to the set of practices and behaviors that enhance an individual’s appearance, hygiene and overall look in a professional setting. It plays very important role in improving self confidence and is crucial for creating a positive first impression in the workplace and during job interviews.
Difference between different type of Grooming Etiquette
Personal Grooming: The daily routines individuals undertake for physical maintenance ex (bathing, hair styling, nail care, skin care). This is essential for self care.
Professional Grooming: The application of personal grooming and etiquett to the workplace, aimed at conveying professionalism and respect.
A Note of Caution: The term “grooming” is also used in a unethical context to describe manipulative behaviors used to establish a trusting relationship with a victim and often ”grooming them” for exploitation. It is crucial to be aware of signs of manipulative behavior but today we will learn for grooming in professional settings.
What are Essential Elements of a Professional Appearance?
Professional grooming is not just about clothes, it’s a set of details that conveys respect.
1. Personal Hygiene (very basic but very essential)
Maintain regular bathing or showering specially if in the morning you go to gym always take bath after that and use mild perfume.
Ensure fresh breath by brushing and flossing teeth twice a day and good smile consists of good teeth.
Keep nails clean and trimmed because it gives a bad impression if you have long dirty nails.
2. Appropriate Attire (Dressing)
Dress Code: Understand the guidelines set by your organization (e.g. formal business attire, business casual or industry specific clothing) and wear accordingly cause now days companies are getting open to these things now not every company make you wear blazer and pant.
Condition: Clothes should always be clean, well fitted, wrinkle free always iron a day before and in good condition.
3. Hair & Facial Grooming
Hair should be clean, well maintained and styled appropriately for the workplace trimmed neatly or styled so that you dont look like kabir singh 2.0.
If you have facial hair (beard or moustache), it must be neatly well maintained.
Professionalism extends beyond physical appearance it is also how you carry yourself among others.
Posture: Stand and sit upright to convey confidence avoid leaning back Posture plays a very important role in showing confidence.
Manners: Display good manners and etiquette be polite, respectful, listen actively and use appropriate language and tone remember you are there to work and get paid.
5. Accessories and Scent
Accessories: Jewelry, watches and belts should be minimal and should suit you. Avoid overly flashy or distracting pieces (make sure that your belts color matches with your shoes color.)
Personal Scent: Go for a light, subtle fragrance or cologne Avoid excessive perfume that may bother or distract others.
Difference between Grooming areas for Men and Women
Professional Grooming for Men
Focus Area
Key Practice
Attire
Typically involves a suit, dress shirt and tie or appropriate business casual according to your company. Dress shoes should be clean and polished.
Facial Hair
Must be groomed and neatly trimmed Ensure the edges are clean and tidy to maintain a polished look you shouldn’t look like Kabir Singh 2.0.
Accessories
Ties, belts and watches should complement the outfit like if brown belt make sure to wear brown shoes, ties shouldn’t be very flashy in colors it should be subtle and normal.
Body Language
Portray confidence by maintaining an upright posture and confident eye contact dont lean or slouchy.
Professional Grooming for Women
Focus Area
Key Practice
Attire & Modesty
Choose clothing that is modest and professional. Ensure hemlines and necklines are appropriate for the workplace and as per the industry norms (don’t wear party dresses in offices).
Skincare/Hair
Maintain a routine for healthy, radiant skin a good skin adds to your confidence. Choose a hairstyle that is professional and avoids distracting styles.
Jewelry
Select minimal and tasteful jewelry. Avoid large or overly flashy pieces that might draw attention away from your intended professional message. (Wear them in Shaadi’s not in offices)
Makeup
If wearing makeup aim for a natural “no make up type look”. Avoid heavy or bold styles.
Professional Grooming for Job Interviews (Dos & Don’ts)
The interview is where your grooming habits are most critical. Dressing appropriately shows respect for the company and the job opportunity and shows that you are truly interested for the company.
✅ Interview DOs
Dress Appropriately Wear professional attire a well fitted suit which adds to your confidence that is clean, ironed and in good condition shouldn’t look very old or color is fading invest in a good suit.
Maintain Hygiene Be clean and bath daily, Pay extra attention to your hairs (comb them properly), nails and good breath.
Polish Your Shoes Ensure your shoes are clean and polished.
Keep Makeup Natural If you wear makeup, ensure it is light and natural
Maintain Good Posture Stand and always sit up straight in meetings and stand straight as good posture conveys confidence.
Carry a Professional Portfolio Bring a good, organized bag or portfolio which has all your document in one place.
❌ Interview DON’Ts
Don’t Wear Overly Casual Attire Avoid very tight skinny jeans, T shirts, colorful sneakers or anything too revealing, always check what is your companies dressing policy.
Don’t Neglect Hair or Nails Avoid unkempt hair, chipped nail polish or overly long nails.
Don’t Wear Excessive Jewelry Avoid large, noisy or distracting accessories.
Don’t Overdo Scents Refrain from applying excessive perfume. Strong scents can be distracting.
Don’t Slouch Avoid leaning or crossing your arms this can convey disinterest or a lack of confidence.
If you want to know see our full guide on how to crack interviews in first go make sure to read this.
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In the modern digital age, every click, search, and purchase you make leaves a footprint. For business students, understanding how this data is used (Digital Profiling) and how to behave professionally online (Netiquette) is crucial.
This guide covers the mechanism of data collection, how to use it for marketing, and how to maintain a professional digital identity.
What is Digital Profiling?
Digital profiling (also known as online profiling or data profiling) is the process of collecting and analyzing data to create a detail profile of individuals or groups.
With every online interaction, users leave a “digital footprint” Companies use advanced technologies like Artificial Intelligence (AI) and Machine Learning to process this data and through this processed data they draw insights about different users and then they can use this to
Tailor their products to meet specific needs.
Offer personalized experiences.
Deliver targeted advertising effectively to sell their products.
1. Why is Digital Profiling Important?
Digital profiling benefits businesses, governments and even customers in the following ways:
Targeted Marketing: Marketers can understand user interests to deliver relevant ads. This increases the chance of converting leads into customers. example searching for shoes on google and then every second advertisement on insta is of shoes.
Personalized User Experiences: Platforms can tailor content (like Netflix recommendations) to individual preferences, making interactions more engaging.
Data Driven Decision Making: It provides insights into market trends and customer behavior, allowing companies to make informed strategic decisions like what customers actually want.
Fraud Detection: By monitoring “normal” behavior patterns, companies can spot abnormal activities and potential security threats.
Enhanced Product Development: Understanding customer pain points helps in creating products that actually solve user problems.
Improved Public Services: Governments use profiling to understand citizen needs and design better public services.
2. How companies create a Digital Profile of users?
To create a profile, data is collected from various sources. These are the “elements” that make up your digital identity:
Browsing History: Websites visited and time spent on pages.
Social Media Activity: Posts, likes, shares, and comments.
Purchase Behavior: What you buy, how often and how much you spend.
Location Data: GPS data tracking physical movements.
Search Queries: Keywords used on Google or other search engines.
Demographic Information: Age, gender, language and location.
Device Information: Whether you use a smartphone, laptop or tablet.
Sentiment Analysis: Analyzing comments and reviews to see how users feel about a brand.
Note: While beneficial, digital profiling raises privacy concerns. It is essential to balance personalization with ethics and adhere to data protection laws.
What are Netiquette (Internet Etiquette)?
Netiquette combines “Network” and “Etiquette.” It refers to the social norms and conventions that govern polite behavior and communication on the internet.
Just as we have ethics in the real world, Netiquette acts as a moral compass in cyberspace.
Credit: Shutterstock
What are the Pillars of Netiquette?
Respect and Courtesy: Treat others online as you would treat them in person. Remember, there is a human behind the screen.
Think Before You Type: Online communication lacks tone and body language. Take a moment to compose your thoughts to avoid misunderstandings and choose your words carefully.
Mind Your Tone: Avoid typing in ALL CAPS (it looks like shouting). Limit the use of slang in professional settings.
Privacy and Security: Respect others’ privacy. Do not share personal information (yours or others’) without consent.
Be Concise: Brevity is appreciated. Stay on topic and keep messages clear.
Avoid Online Arguments: Engaging in heated “flame wars” rarely leads to a positive outcome. Disengage if a conversation becomes toxic.
Be Patient: Not everyone has the same knowledge or speed as you. Be tolerant of different perspectives.
Why is Netiquette Important?
Fosters Community: Respectful dialogue encourages collaboration and the exchange of ideas.
Professional Image: Good online manners build a positive professional reputation, leading to better career prospects.
Prevents Conflict: Clear and polite communication minimizes misinterpretations and offenses.
Protects Privacy: Following netiquette helps protect sensitive information from phishing or spamming.
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A Group Discussion (GD) is a dynamic and interactive technique where a small group of people discusses a specific topic, exchanges ideas and expresses opinions. It is commonly used in educational institutions and corporate recruitment to assess a candidate’s overall personality, including their ability to think critically, communicate effectively and work collaboratively.
The main goal of a GD is to reach a reasonable conclusion or solution through collaboration and discussions.
Why Group Discussions are important?
Group discussions are an essential tool for personal growth, intellectual development and professional skill enhancement.
Enhances Critical Thinking: GDs encourage participants to think analytically, evaluate arguments, identify logical flaws and make decisions based on evidence rather than assumptions.
Improves Communication Skills: Participants learn to express thoughts clearly and confidently, listen actively and articulate viewpoints persuasively a skill valuable in personal and professional settings.
Fosters Collaboration and Teamwork: Individuals learn to respect diverse opinions, compromise and build upon each other’s ideas to achieve common goals.
Problem Solving and Decision Making: By brainstorming solutions and considering various perspectives, a group can arrive at more well rounded and innovative outcomes than a single person.
Confidence Building: Regular participation helps individuals overcome the fear of public speaking and boosts self-confidence and assertiveness.
Prepares for Interviews: GDs simulate real-life scenarios, helping participants practice for job interviews and professional debates.
What are some Essential Skills for Effective GD?
Effective group discussions require participants to possess a variety of skills that contribute to productive and constructive communication.
What are types of Group Discussion Topics?
Factual Group Discussions: Focuses on real-world, current events or socioeconomic concerns (e.g., “The impact of the new GST law or Impact of new tax regime”). These test your ability to digest information and analyze facts.
Opinion-Based Group Discussions: Focus on beliefs and viewpoints where there is no right or wrong answer (e.g., “Does mobile phone makes us anxiety prone?”). These test your articulation and persuasion skills.
Group Conversations based on Case Studies: Mimic real world business circumstances. The group is given a fictitious scenario and must work together to identify the problem and propose a solution.
Abstract Group Discussion: Focus on abstract, creative concepts (e.g., “The Color Red” or “The difference between success and failure”). These test your originality, lateral thinking and ability to associate different concepts.
How to Generate Strong Points for a Group Discussion?
1. Start with Brainstorming Begin by writing down every idea that comes to mind about the topic. Don’t filter or judge anything at this stage just note everything. You can sort and refine the ideas later.
2. Do Proper Research Read articles, books and trusted online sources to understand the topic better. Collect facts, viewpoints, and examples so you can speak with confidence during the discussion.
3. Use Examples and Analogies To make your points more relatable support them with real life examples, case studies or comparisons. This helps others understand your perspective clearly.
4. Prioritize Your Best Points After gathering ideas, choose the most relevant and strongest points. Focus on what adds real value to the discussion rather than trying to cover everything.
5. Practice Your Points Before the actual GD, rehearse how you will present your points. Rearrange them if needed so they flow logically. If possible, get feedback from friends or classmates.
6. Create a Mind Map Make a simple diagram starting with the main topic and branching into subtopics. This gives you a clear visual structure and may even help you discover new points.
7. Use the 5W + 1H Method Ask questions like Who, What, When, Where, Why and How to explore the topic from multiple angles. For example, if the topic is climate change, ask:
Why is it happening?
How can we reduce it?
Who is most affected?
8. Problem Solution Breakdown If the topic involves an issue, identify the core problems and suggest practical solutions. This shows critical thinking and a constructive approach.
9. Consider Environmental Impact For topics related to nature or sustainability, think about how the issue affects ecosystems, resources, and climate. Highlight the need for eco friendly and sustainable actions.
10. Consider Social Impact Look at how the topic affects society, especially different communities or groups. This helps bring in points about equality, inclusiveness and social responsibility.
What are some Essential Skills for Effective GD?
Effective group discussions require participants to possess a variety of skills that contribute to productive and constructive communication.
Skill Required
How It Helps in a GD
Active Listening
Focus on what others are saying without interrupting in between. It shows respect and allows you to build logically on the ideas presented by others and then answer accordingly.
Critical Thinking
Analyze information and evaluate arguments carefully. This helps you identify the strengths and weaknesses of different perspectives.
Clarity of Thought
Organize your thoughts before speaking. Present your ideas in a structured, coherent and concise manner which will make others attentive to your words.
Flexibility
Be open minded and willing to adapt your viewpoint based on new evidence or logical reasoning presented by others don’t be rigid.
Empathy and Respect
Value different viewpoints, even if they differ from your own. Avoid personal attacks and maintain an inclusive environment.
Time Management
Stay mindful of time constraints. Prioritize your arguments and ensure the discussion stays focused on the main topic.
Body Language Awareness
Use non-verbal cues (eye contact, nodding, open gestures) to convey engagement and professionalism.
What are some Rules of Conduct for GDs? (Do’s and Don’ts)
A respectful and open atmosphere is essential for a productive and good GD.
✅ The DOs (What to Practice)
Prepare: Familiarize yourself with the topic and gather relevant information beforehand so that you are prepared.
Listen Actively: Pay attention to others’ viewpoints. Use summarizing or paraphrasing to ensure you understand and to show respect for their input.
Speak Respectfully: Express your thoughts politely and tactfully dont argue.
Stay on Topic: Keep the discussion focused on the main subject and prioritize your arguments.
Seek Consensus: Look for areas of agreement or common ground to move the discussion towards a solution.
Use Effective Phrases: Use phrases to manage the flow and promote inclusion:
To Summarize: “Let’s quickly summarize…”
To Promote Inclusion: “Does anyone have a different viewpoint?”
To Guide Focus: “Let’s focus on the main topic…”
❌ The DON’Ts (What to Avoid)
Don’t Interrupt or Dominate: Allow everyone to express their thoughts. Dominating the conversation discourages others from participating and others will also be reluctant while listening you.
Don’t Rush to Judgment: Take time to hear different viewpoints before forming conclusions. Be open to changing your perspective.
Don’t Be Dismissive: Avoid belittling others’ ideas or opinions, even if you disagree. Respectful disagreement is encouraged.
Don’t Use Offensive Language: Refrain from using inflammatory language that may create tension within the group.
Don’t Engage in Side Conversations: Avoid having unrelated conversations with a subset of participants, as this is distracting and exclusive.
Don’t Slouch: Use positive body language. Avoid distractions like using your phone or fidgeting or ignoring.
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Job Interview: Preparation, Conduct, and Feedback and follow up
The job interview is a very important process when it comes to cracking or landing a job. Your primary goals are to convince the employer you are the best candidate among the other pool of candidates and to determine if the organization is the right fit for your career goals. in this article we will discuss everything related to interview and how to crack any type of interview for landing your dream job.
Strategy 1: How to do Research & Planning for an job interview?
First and foremost for which ever companies interview which you are preparing for its important to know about the companie ”culture” ”what company is for” ”what are companies goals” and ”what that company do” You should aim to talk like an insider that you already well aware with the company and you are genuinely interested for the job role.
1. Know the Company Fully
Research is non-negotiable. Use the company website about page , if they dont have one research about them on internet, annual reports (if available) or press releases and network with other candidates of that particular company.
Information to Research
Why It Matters
Products & Services
Be familiar with what they sell and their core business.
Mission & Goals
Shows you align with the companies corporate vision.
Key Executives
Know the names and roles of the leadership team specially the founders they will not ask that but its better to know if the company is big.
Recent News
Check for acquisitions, new product launches, or recent challenges (example : applying in APPLE its better to know what are the recent releases of i phones and what are the upgrades they have made from previous one).
Corporate Structure
Understand the organization’s size, facilities and the type of clients they serve into.
Financial Health
Research the last five years of performance (stock, sales volume) to demonstrate you are well-grounded. (specially if you are finance guy but if you are applying to some other field example: Marketing- so its better to know about recent marketing campaigns )
2. Know Yourself fully (Goals and thorough with your Resume)
Career Goals: Be prepared to discuss your short-term and long-term goals. Relate them directly to the company “I see myself increasing my skills and becoming productive in a firm (like why this company type….)“
Resume Alignment: Ensure your resume objective precisely matches the job role you are interviewing for. If you have new information, update and align your resume before the interview make sure its updates and latest and also there is no point of adding information which has no relevant to the job role cause it can cause hurdles during your interview .
Strategy 2: How to Make a Winning First Impression during an interview?
We all have heard that First impressions are the last impression —research indicates that an interviewer often decides whether to hire a candidate in just 5½ minutes.
1. Punctuality and Attire
Be Punctual: Arrive 10 minutes early. This gives you time to catch your breath, observe the work environment, and calm yourself down. Allowing yourself time to settle makes you look prepared, not rushed if its a online interview make sure you have a blanked pen and paper.
Dress Professionally: Your attire should be neat, clean, well-groomed, and conservative (especially if you are unsure of the office culture you can prefer basic white shirt or black pant).
Wear a solid color pant with light color shirt or coordinate professionaly wear with a sublet blazer if you have one not necessary.
Shirts and Pants must be ironed with collars lying flat.
Wear polished, closed-toe formal shoes.
Minimize jewelry, accessories, and strong scents. (try to avoid them)
2. Conduct and Body Language very important
The Handshake: Greet each person with a firm but quick handshake while maintaining eye contact and smiling. Confidence is the key.
Seating: Wait to sit down until the interviewer invites you to do so and always carry a smile.
Engagement: Show you are truly engaged. Do not play on your phone or see here and there—this is a sign of disrespect. Be an attentive listener and first listen to what interviewer is asking and then politely answer it .
Strategy 3: How to answer Interview Questions (Using STAR Method)
These methods are mainly applicable to Behavior-based and situational questions and plus they are increasing in popularity because past behavior is considered a valid predictor of future performance.
1. Behavioral-Based Questions (BBQs)
These questions usually begin with: “Tell me about a time when….” or “Describe a situation and how you handled it….”
The best way to answer BBQs is by using a structured approach like the STAR Method (Situation, task, Action, Result) or the similar W5 Model (What, Who, When, Where, Why and How).
STAR Method
Explanation
S: Situation
Set the background what was the problem or situation you were in. Describe where you were, what was happening, and why the situation mattered to you
T: Task
Explain your specific responsibilities or work need to be done What goal, duty or challenge were you expected to handle?
A: Action
Describe the exact steps you took, Focus on your contribution — what you did, how you did it and why. Use verbs like organized, coordinated, implemented etc
R: Result
what final outcome you got. Highlight achievements, improvements, numbers or benefits. Use data when possible (e.g., “increased efficiency by 20%”).
2. What Types of Questions to Prepare For an interview?
Personal Questions: Aimed at interests and future plans regarding you. (Ex: “What you want to do in next 5 years?”)
Research Questions: Aimed at assessing your interest and knowledge of the job/company which you are going to do . (Ex: “What do you want to join our company (lunotes)?”)
Tip: List three or four attractive factors and only mention a single, minor, non-critical unattractive item.
Situational Questions: Hypothetical questions asking how you would handle a real-life situation on the job (e.g., handling a rude co-worker or a customer problem beyond your responsibility pr how you will handle stressful situations with the employee).
Strategy 4: Conducting Mock Interviews and Feedback
Preparation builds confidence and teaches you how to present and what to present during an real interview. Mock interviews are very important part of this preparation process.
1. What is The Role of Mock Interviews?
Mock interviews allow you to practice responding to Behavioral based and situational questions in a low-stakes environment. You can utilize recorded video mock interviews or practice sessions with career center staff who already have a experience of taking a lot of interviews. ex: Dhristi ias conduct mock interviews and post them on their youtube channel you can go visit and see those PLAYLIST LINK FOR MOCK INTERVIEWS.
2. What is the Value of Feedback?
Feedback is the main purpose of the mock interview this is how you learn and improve. You can get suggestions on:
Your clarity and succinctness (avoiding rambling).
Your use of the STAR method.
Your non-verbal cues (body language, eye contact) how to sit how much to eye contact what are the manners.
3. How to Handle Different Interview Settings?
Setting
important Strategy
Panel/Two or More People
Maintain good eye contact with the person asking the question, but look at the other interviewers frequently to include them in the discussion.
Telephone Interview
Keep your resume and research notes in front of you. Choose your words carefully and vary your voice tone. If unready, politely request a callback time.
Video Conferencing
Make eye contact directly with the camera (this appears as direct eye contact to the employer). Check the monitor frequently to observe interviewers body language.
Competitive Group Interview (group discussions)
Contribute thoughtfully and intelligently, do not monopolize the conversation just for the sake of dominating the convo. The interviewers are watching who emerges as a leader but also being polite and respectful to others.
Strategy 5: Post-Interview Follow-up
The job search doesn’t end when you leave the room. Post-interview follow-up demonstrates that you are genuinely interested, want to work and ready to improve.
1. how to Send a Thank You Note?
Send a professional thank you note (email is often acceptable) within 48 hours of the interview. Reiterate your continued genuine interest in the position.
2. How to Follow-up and then Research?
Ask the Next Step: Always ask the interviewer, “What is the next step in the hiring process?” This gives you permission to follow up later.
Salary Negotiation: After the interview (especially if you think you have done well and you ae expecting an offer), research potential salary offerings for the particular position. Knowing the corporate culture (expected overtime, work at home policies, companies employee satisfaction) is is important before taking the final decision and getting a salary you truly deserve
Never Assume: Do not assume that a second interview will lead to a job offer; keep collecting information actively.
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“Interview Preparation & Planning” is likely the most career-defining subject in your BBA curriculum. It makes you prepare by using your academic knowledge into your Practical employability, teaching you how exactly you land up a good high paying job.
We as lunotes have organized the complete syllabus of all 4 units into easy-to-understand onpoint notes to help you crack your dream job.
Just click on your desired topic (view notes) below to Start learning now for your semester exams!
Unit 1: CV and Resume Writing
This unit focuses on how to craft the perfect document to market yourself to employers.
CV writing skill |How to avoid Typos, Howlers, Boast, and Bravado in CVs | Making of Resume/C.V | Dos & Don’ts of working document (3 topics in one article)[View Notes]
Unit 2: Interview Preparation
This unit prepares you for the verbal aspect of the hiring process, focusing on knowledge and presentation.
Role and Significance of General Knowledge and General Awareness [View Notes]
We hope these Interview Preparation & Planning notes help you land your dream placement. LuNotes is your one-stop solution for all Lucknow University notes. Don’t forget to check out our notes for other subjects in your semester!
[Link to Human Resource Management Notes]
[Link to Marketing Management Notes]
[Link to Financial Management Notes]
Found a mistake? We work hard to ensure all notes are 100% accurate and as per the latest LU syllabus. If you spot an error, find a missing subject, or have a request, please [click here to let us know]!
By Lu Notes – your trusted for Lucknow University Semester exam notes, crafted with love. ❤️
For Every Corporate professional or student the transition from campus to corporate begins with one crucial document: the Job Application. This is your offer of service. It is not just a piece of paper; it is a tool to persuade an employer that you are the perfect fit for the job.
Here is a complete Article on how to craft a Job Ready Resume and Cover Letter, based on professional communication standards.
1. The Basics of Resume Writing
A Resume (or Curriculum Vitae/CV) is a written statement of your personal history. It includes your biographical details, education, work experience, and achievements.
The 10-Second Rule: Did you know that due to the high volume of applicants, recruiters often spend only about 10 seconds reviewing a resume? This means your resume must be “dynamite”—it needs to grab attention immediately.
Key Principles:
Self-Introduction: It is a tool to promote yourself.
Credibility: It supports the claims you make in your cover letter.
Employer-Focused: Don’t just list what you have done; focus on what you can do for the employer.
Specialized: Never send the exact same resume for every job. Modify it to highlight the specific skills the job requires it increases your chances if getting shortlisted.
2. How to write a Perfect Resume
To ensure your resume is readable, professional and best organize it under these headings:
A. Heading (Important contact details)
Include your full name, address, telephone number, and email id. (be specific short nothing irrelevant)
B. Objective
State a clear, practical objective. (Short mainly why you want to join the company and you are going to benefit the company)
Avoid vague or ambiguous phrases like: “i am thinking to join that particular position…..”
Instead, be specific: Mention the position that suits your education and experience and tell them with confidence that you want to join the company.
C. Education (Most important section for a fresher)
List your qualifications in reverse chronological order (most recent degree first).
Include degrees (MBA/BBA/ or any filed its better to have a relevant degree but if you don’t have its okay but you should out perform other when it comes to skills).
Include special certificate programs (From good companies) or academic achievements.
List specializations and Grade Point Averages (CGPA) Percentage or find whats your Countries Norms.
D. Work Experience (For people who have already worked in a company )
Most important, try to be relevant to the field which you are applying to, List your experience in reverse chronological order (latest job which you done first).
Format: Job Title, Company Name, Place, Duration.
Action Words: Describe your role using forceful words like Achieved, Coordinated, Supervised, Developed or you can also use STAR Method.
Performance or what outcome you got from it: Don’t just list duties mention how well you performed them (STAR Method will help you in that).
I have below attached a sample CV format followed in the IIMs which are top colleges for business studies in India. also you can look at the discussions around it Click here.
E. Awards & Achievements
Freshers: List scholarships, school awards, and prizes to show merit it academic awards.
Experienced: Mention successful projects handled, targets achieved, or new techniques developed or Mainly how you used the pre-extential skills which you have to make the organization achieve its goal.
F. Activities and Skills
Mention hobbies or activities that helped you acquire specific skills (e.g., ‘Captain of school kabaddi team or head boy for school’ shows leadership). Mention computer skills and languages known here.
Mistake to avoid:
Make sure it should be most relevant one don’t mention school achievements until and unless its so big and try to fully avoid it if you already have many don’t fill it just for the sake your resume look dense.
G. References
List 2-3 people who know you professionally and can verify your facts.
(its better to have people who gives you recommendations cause it increases your chances of getting your resume shortlisted but if you don’t have references, try to get those or learn how to get referrals from here or just use learn to use LinkedIn.
3. What are some dos and don’t for Covering Letter?
A resume is almost always accompanied by a Covering Letter. This letter must create a strong desire in the employer to meet you.
Credit : Shutterstock
Formatting “Dos”:
Use good quality paper.
Use a formal salutation (e.g., ” Mr. Singh”).
Include a complimentary close (e.g., “Sincerely”).
Mention that the resume is enclosed.
Do not use a letterhead.
Writing Techniques for getting shortlisted?
Be Positive: Show confidence, but do not appear arrogant.
Show Knowledge: Demonstrate that you know about the company and the specific job requirements.
Be Specific: Prove that your capabilities match their requirements how you are going to surf that particular role.
The Opening: Use the first paragraph to capture attention and to hook.
The Closing: Use the ending to request an interview and follow ups.
4. How to Avoid Typos, Boast, and Bravado?
A major part of CV writing is knowing what NOT to do. Your document must be professional and honest.
Avoid Typos (Errors): Employers overlook applications with errors. Proofread carefully. Check for spelling and grammar. Ask a friend to read it before you send it you can also tell him to read yours and you read his resume.
Avoid Boast and Bravado:
Do not use unnecessary flattery regarding the company no (cause who knows that HR loved his company or not or soon going to leave as soon as he gets a good offer).
Avoid negative remarks about yourself or previous employers (Gives a very bad image for you).
Be Honest: The key to a successful letter is basic honesty. Do not paint your life events as “rosier” than they truly are (Cause you could be fresher its okay now to know everything and hiring manager them selves understand that its better to be honest).
Tone: Keep the tone polite, respectful, and straightforward. Do not be demanding or quarrel with the imployer that you were correct .
5. How to Follow-Up?
If you have sent your resume but haven’t heard back within two weeks, it is time to follow up. This shows eagerness and interest, not desperation. (if they don’t reply you who cares they already didn’t when you applied for job.)
Methods for follow ups:
by Email: Keep it short. Re-state your interest and key qualifications. Check for spelling errors make it short and crisp.
by Phone:
Make a short script of what you want to say and what you want to know or what were which you were lacking in cv or in skills.
Keep your resume in front of you for reference.
Call from a quiet place now on random road with car honks be professional.
Be prepared for a short “screening interview” on the spot.
Always thank the manager for their time and the feedback which they have you.
Conclusion: Whether it is the CV, the cover letter, or the follow-up, the goal is to present yourself as a valuable asset. Time and care put into these documents now will pay off in your future career and Remember for a corporate professional a single piece of paper can decide your future .
Enjoyed reading the article make sure to read 5 Proven Job Interview Strategies for Cracking your Dream Job
For any company, the financial statements are the final, formal annual reports that summarize the results of its accounting process. These statements are the primary way management communicates financial information to the company’s owners (shareholders) and other external parties like investors, creditors, and the government.
The main financial statements include:
Statement of Profit and Loss (P&L): Shows the company’s profitability over a period.
Balance Sheet: Shows the company’s financial position (assets and liabilities) on a specific date.
Cash Flow Statement: Shows the movement of cash (inflows and outflows).
These statements must be prepared according to the legal environment (the Companies Act, 2013), Accounting Standards (AS/Ind AS), and core accounting principles.
1. The Nature of Financial Statements
It’s important to understand what financial statements truly represent. They are not just a collection of exact facts, but a blend of the following:
Recorded Facts: They are based on data recorded in the accounting books, which is primarily based on historical cost (the original price paid). They do not reflect the current market value of assets.
Accounting Conventions: They follow established rules. For example, the convention of conservatism is why inventory is valued at “cost or market price, whichever is lower.” The materiality convention is why a small item like a ₹20 stapler is treated as an expense, even though it’s technically an asset.
Postulates (Assumptions): They are built on basic assumptions. The most important is the Going Concern postulate, which assumes the business will continue to operate for a long time. This is why we show assets at their cost, not their “break-up” or liquidation value.
Personal Judgments: They involve estimates. An accountant must use personal judgment to estimate the “useful life” of an asset for depreciation or to create a “provision for doubtful debts.”
2. Objectives of Financial Statements (Why We Prepare Them)
The primary goal of financial statements is to provide reliable information that helps users make informed economic decisions.
To show the company’s economic resources (Assets) and obligations (Liabilities).
To provide information on the earning capacity (Profitability) of the business.
To show how the company is generating and using cash (Cash Flow).
To allow shareholders to assess the effectiveness of management (stewardship).
To disclose the main accounting policies used to prepare the statements.
3. The New Format (Schedule III, Companies Act 2013)
To harmonize reporting, the Companies Act, 2013, requires all companies to prepare their Balance Sheet and P&L Statement in the specific vertical format prescribed in Schedule III.
Key features of this format include:
A clear distinction between Current and Non-Current items.
The terms “Sundry Debtors” and “Sundry Creditors” have been replaced with “Trade Receivables” and “Trade Payables.”
The “debit” balance of a P&L Account (a loss) is shown as a negative number under the “Surplus” heading.
4. The Balance Sheet (Schedule III Format)
The Balance Sheet is presented vertically in this order:
Balance Sheet as at [Date]
Particulars
Note No.
Amount (₹)
I. EQUITY AND LIABILITIES
(1) Shareholders’ Funds
(a) Share Capital
(b) Reserves and Surplus
(c) Money received against share warrants
(2) Share application money pending allotment
(3) Non-Current Liabilities
(a) Long-term borrowings
(b) Deferred tax liabilities (Net)
(c) Other long-term liabilities
(d) Long-term provisions
(4) Current Liabilities
(a) Short-term borrowings
(b) Trade payables
(c) Other current liabilities
(d) Short-term provisions
TOTAL EQUITY AND LIABILITIES
II. ASSETS
(1) Non-Current Assets
(a) Fixed Assets:
(i) Tangible Assets
(ii) Intangible Assets
(b) Non-current investments
(c) Long-term loans and advances
(d) Other non-current assets
(2) Current Assets
(a) Current investments
(b) Inventories
(c) Trade receivables
(d) Cash and cash equivalents
(e) Short-term loans and advances
(f) Other current assets
TOTAL ASSETS
5. Key Balance Sheet Items Explained
(A) Share Capital
This is a key part of Shareholders’ Funds. The company must provide a detailed “Note to Account” that breaks down the Share Capital as follows:
Authorised Capital: The maximum amount of capital the company is legally allowed to issue, as stated in its Memorandum of Association.
Issued Capital: The portion of Authorised Capital that the company has offered to the public to subscribe to.
Subscribed Capital: The portion of Issued Capital that the public has actually applied for and agreed to buy. This is divided into:
Subscribed and Fully Paid up: Shares on which the company has called the full amount, and the shareholders have paid in full.
Subscribed but not Fully Paid up: Shares on which the company has either not called the full amount, or it has called the full amount, but shareholders have failed to pay (known as “Calls in Arrears”).
Shares Forfeited: The amount originally paid up on shares that have been canceled by the company due to non-payment of calls. This is added to the total Share Capital.
(B) Reserves and Surplus
This is the second part of Shareholders’ Funds. It represents the accumulated profits and gains of the company. It includes:
Capital Reserve: A reserve created from capital profits (e.g., profit on sale of a fixed asset).
Capital Redemption Reserve (CRR): A reserve created when the company buys back its own shares.
Securities Premium Reserve: The extra amount received over the face value of a share.
Debenture Redemption Reserve (DRR): A reserve set aside to repay debentures.
Revaluation Reserve: A reserve created if the company revalues its assets upwards.
Surplus (P&L Balance): This is the company’s retained earnings. The “debit” balance (a loss) is shown as a negative number.
(C) Proposed Dividend
This is the dividend recommended by the Board of Directors but not yet approved by the shareholders. As per AS-4, this is not a liability. It is shown only as a contingent liability in the “Notes to Accounts.”
(D) Trade Receivables & Payables
Trade Receivables: The new term for “Sundry Debtors.” It’s the amount the company is owed by its customers for goods or services sold on credit.
Trade Payables: The new term for “Sundry Creditors.” It’s the amount the company owes to its suppliers for goods or services purchased on credit.
6. The Statement of Profit and Loss (Schedule III Format)
This statement is also presented vertically. It begins with income and then lists all expenses to arrive at the profit.
Statement of Profit and Loss for the year ended [Date]
Particulars
Note No.
Amount (₹)
I. Revenue from Operations (Net Sales)
II. Other Income (e.g., Interest, Dividends)
III. Total Revenue (I + II)
IV. Expenses:
(a) Cost of materials consumed
(b) Purchases of Stock-in-Trade
(c) Changes in inventories of finished goods, WIP, etc.
(d) Employee benefits expense (Salaries, Wages)
(e) Finance costs (Interest on borrowings)
(f) Depreciation and amortization expense
(g) Other expenses (Rent, Admin., Selling expenses, etc.)
Total Expenses (IV)
V. Profit before tax (III − IV)
VI. Tax expense: (Current Tax & Deferred Tax)
VII. Profit (Loss) for the period (V − VI)
VIII. Earnings per Equity Share (Basic & Diluted)
7. Uses and Importance of Financial Statements
Financial statements are the primary source of information for all stakeholders:
Shareholders/Investors: To assess management’s performance (stewardship) and decide whether to buy, hold, or sell shares.
Lenders/Creditors (Banks): To decide whether to grant credit (loans) to the company. They check the company’s solvency.
Government & Tax Authorities: To form fiscal policies, collect taxes, and ensure compliance with laws.
Management: For internal planning, decision-making, and controlling the business.
Employees: To assess the company’s stability and profitability, which impacts their job security and potential for a bonus.
Stock Exchanges: To monitor the financial health of listed companies and protect investors.
8. Limitations of Financial Statements
Despite their importance, financial statements have several limitations:
They are Historical: They are based on historical cost, not the current market value. Inflation is often ignored.
They Involve Bias: They rely on personal judgments and estimates (e.g., useful life of an asset, doubtful debts), which can be subjective.
They are Aggregate: They show aggregate (total) data. Details that might be important for a decision are often hidden.
They Ignore Qualitative Information: They only show what can be measured in money. They do not show qualitative data like employee morale, customer satisfaction, or the quality of the management team.
They are only Interim Reports: They are a “snapshot” at a point in time (Balance Sheet) or for a period (P&L), but they don’t perfectly predict the future.
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Inventory valuation is the accounting method a company uses to find the monetary value of its closing stock (the inventory it has left at the end of an accounting period).
Why is this so important? Imagine you own a small shop.
In January, you buy 100 pens at ₹10 each.
In February, prices rise, and you buy 100 more pens at ₹12 each.
In March, you sell 150 pens.
When you calculate your profit, which cost should you use for the pens you sold? The ₹10 ones? The ₹12 ones? A mix? Your choice will change your Cost of Goods Sold (COGS) and your final Net Profit.
The method you choose for valuing inventory is a key decision that impacts your company’s financial statements. Here are the 4 main methods used in accounting.
1. Specific Identification Method
This method tracks the exact cost of every single item in your inventory from the moment you buy it to the moment you sell it. Each item is individually identified.
How it works: You know the specific cost of the exact item you sold.
Best for: High-value, unique, and easily distinguishable items.
Examples: Cars (with a specific Vehicle Identification Number), custom jewelry, real estate, or large pieces of furniture.
Benefits:
Perfectly Accurate: It’s the most accurate method, as the cost flow perfectly matches the actual physical flow of goods.
Limitations:
Impractical: It is impossible for businesses with thousands of identical, low-cost items (like a grocery store or a pen manufacturer).
Easy to Manipulate Profit: A manager could choose to sell the “high-cost” item to show a lower profit, or the “low-cost” item to show a higher profit.
2. FIFO (First-In, First-Out) Method
This is the most common and logical method. It assumes that the First items to enter your inventory are the First ones to be sold.
Think of milk at a grocery store. The store sells the oldest milk first.
What it means: The cost of the oldest items you purchased is used to calculate your COGS.
Closing Stock Value: The items left in your closing stock are valued at the prices of the most recent purchases.
✅ Benefits of FIFO
Logical: It matches the actual physical flow of most goods, especially perishable items.
Accurate Balance Sheet: Your closing stock is valued at the most recent prices. This value is very close to the current market price, making your Balance Sheet’s “Current Assets” look accurate.
Widely Accepted: This method is accepted by all major accounting standards, including IFRS and Ind AS.
Prevents Spoilage: Following this flow in practice reduces losses from goods expiring or becoming obsolete.
❌ Limitations of FIFO
Overstates Profit (During Inflation): This is the biggest drawback. When prices are rising (inflation), you are matching your old, cheap costs against your new, high sales prices. This makes your profit look artificially high.
Higher Tax Bill: Because your reported profit is higher, your company will have to pay more in taxes.
Complex Record-Keeping: You have to track every batch of inventory and its specific price, which can be difficult.
3. LIFO (Last-In, First-Out) Method
This method is the opposite of FIFO. It assumes that the Last items to enter your inventory (the newest ones) are the First ones to be sold.
Think of a stack of sandbags or coal. You always take the newest one off the top of the pile first.
What it means: The cost of the most recent items you purchased is used to calculate your COGS.
Closing Stock Value: The items left in your closing stock are valued at the prices of the oldest purchases.
✅ Benefits of LIFO
Better Profit Matching (P&L): This is the main advantage. It matches your most recent (current) costs against your current sales revenue. In times of inflation, this gives a much more realistic picture of your profit.
Tax Benefits (During Inflation): Because you are using your highest (most recent) costs, your COGS is higher, and your reported profit is lower. Lower profit means you pay less tax. This is the primary reason companies used this method.
❌ Limitations of LIFO
Not Allowed by IFRS/Ind AS: This is a critical point for students. LIFO is banned by International Financial Reporting Standards (IFRS) and Indian Accounting Standards (Ind AS). It is still permitted in the U.S. (GAAP) but is not common globally.
Inaccurate Balance Sheet: Your closing stock is valued at your oldest, most outdated costs. This can make your assets on the Balance Sheet look artificially low and misleading.
Unrealistic Physical Flow: It does not match the actual physical flow of most products.
Easy to Manipulate Profit: A manager can easily buy a large batch of high-cost inventory right before the year ends to intentionally lower the company’s profit and tax bill.
4. Weighted Average Cost (WAC) Method
This method finds a “middle ground” between FIFO and LIFO. It smooths out price fluctuations by calculating a new average cost for all items in your inventory every time you make a new purchase.
How it works: All items (both sold and in stock) are valued at this one average price.
Formula:WAC per unit = Total Cost of Goods Available for Sale / Total Units Available for Sale
✅ Benefits of WAC
Simple & Logical: It is much easier to manage than tracking every single batch (like in FIFO/LIFO). There is just one average price for everything.
Best for Indistinguishable Goods: This is the perfect method for products that are mixed together and cannot be separated, such as oil, gasoline, wheat, or iron ore.
Smooths Out Prices: It avoids the extreme high profits of FIFO and the extreme low profits of LIFO, giving a more stable, middle-ground profit number.
Widely Accepted: This method is allowed by both IFRS and Ind AS.
❌ Limitations of WAC
Misleading Stock Value: The average cost of your closing stock might not reflect the actual current market price, which can make the Balance Sheet less accurate than FIFO.
Constant Recalculation: If you use a perpetual inventory system, you must recalculate the new average cost after every single purchase, which can be a lot of work.
Loses Batch Identity: It’s impossible to track the cost of specific batches, which can be a problem if the age or source of a product is important.
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For any business, tracking inventory (stock) is crucial. You need to know the physical quantity and monetary value of the items you have sold and the items still in hand. There are two main systems to do this: the Periodic Inventory System and the Perpetual Inventory System.1
This guide will break down both systems to help you understand how they work, their pros and cons, and which one to use.
1. The Periodic (Physical) Inventory System
The Periodic Inventory System is a method where you determine your inventory value by doing a full physical count (or measurement/weight) of all your items. This count is typically done periodically—usually just once at the end of the financial year.2
How It Works
Under this system, the business does not track the exact inventory level or Cost of Goods Sold (COGS) during the year. Instead, it uses a simple formula after the physical count to figure out the COGS as a residual (leftover) number.
Opening Inventory: You know this from the last year’s count.
Purchases: You know this from your purchase records.
Closing Inventory: This is the only number you get from your big physical count at the end of the year.
Benefits of the Periodic System
Simple to Use: It’s very easy to manage, especially for small businesses.
Less Expensive: It is the cheapest system to use. It does not require any special software, scanners, or costly training.
Limitations of the Periodic System
Includes Lost/Stolen Goods: The biggest drawback. The COGS formula assumes that any item not in the closing count must have been sold. This means that items lost to theft, waste, or damage are improperly included in the Cost of Goods Sold, hiding your losses.
Disrupts Business: The physical count requires you to stop all normal business operations for several days, which can be costly.4
No Real-Time Data: You have no idea what your inventory level is until the end of the year. This makes it impossible to know if you are “out of stock” of an item.
No Inventory Control: Because you only count once a year, it’s impossible to identify when items went missing, making it difficult to control losses.5
2. The Perpetual Inventory System
The Perpetual Inventory System is a more advanced method that involves continuously recording inventory balances every time an item is received (a purchase) or issued (a sale).
How It Works
A separate record (like a stock card or database entry) is kept for each type of inventory. This record is updated immediately.
When goods are bought, the inventory account is debited.
When goods are sold, two entries are made: one to record the sale, and one to directly calculate the COGS and reduce the inventory account.
Under this system, the Cost of Goods Sold is determined directly, and the Closing Inventory is the residual figure left in the records. Regular physical checks are still done to compare the record balance to the actual stock and identify any discrepancies (like theft).
Benefits of the Perpetual System
No Business Disruption: You don’t need to shut down the business for a massive year-end count.
Real-Time Data: You always know your exact stock level, which helps prevent “out of stock” situations and keeps customers happy.
Strong Inventory Control: Because you have a continuous record, you can easily spot losses from theft or damage as soon as they happen and take corrective action.
Faster Reporting: Financial statements can be prepared quickly (e.g., monthly or quarterly) because the inventory and COGS figures are always available.
Limitations of the Perpetual System
Expensive: This system is costly. It requires significant setup costs, including inventory software, point-of-sale (POS) scanners, and other equipment.
Higher Labor Cost: It requires more labor, as every single item must be entered into the system.
Can Be Misleading: The system is only as good as the data entered. If employees make mistakes (e.g., scan the wrong item or enter the wrong quantity), the records will be inaccurate.
Requires Monitoring: Because of potential employee errors or customer theft, this system requires extra security monitoring, which adds to the cost.6
3. Periodic vs. Perpetual: Key Differences
Basis for Comparison
Periodic Inventory System
Perpetual Inventory System
Meaning
Based on a physical count at the end of the period.
Based on continuous, real-time record-keeping.
How COGS is Found
COGS is the residual figure (calculated at the end).
COGS is determined directly at the time of each sale.
How Inventory is Found
Closing Inventory is determined directly (by counting).
Closing Inventory is the residual figure (from the records).
Business Operations
Requires closure of business for stock-taking.
Does not affect daily operations.
Inventory Control
Not possible. Losses are hidden in COGS.
Provides strong control. Discrepancies are easily found.
Cost
Simple and inexpensive.
Costly and complex (requires software and training).
Best Suited For
Small businesses
Large enterprises
4. What is Stock Taking? (Adjusting for Dates)
Often, it is not possible to do the full physical stock count on the exact closing date of the financial year (e.g., March 31st). The count might be done a few days before or a few days after.
When this happens, you must adjust the value of the stock you counted to find the true value that existed on the closing date.
How to Calculate Stock on the Closing Date
Example: Your financial year ends on March 31st, but you do the physical count on April 7th.
You must start with the stock value you counted on April 7th and reverse all transactions that happened in the “gap” (April 1st – April 7th).
Here is the calculation:
Particulars
Amount (₹)
Value of stock (as per physical count on April 7th)
XXX
Add: Cost of Goods Sold (Sales) during the gap (April 1 – 7)
+ XXX
(Why? These items were sold and gone by April 7th, but they were in stock on March 31st, so we must add them back.)
Less: Purchases (less returns) during the gap (April 1 – 7)
– XXX
(Why? These items were in the count on April 7th, but they had not arrived yet on March 31st, so we must remove them.)
= Value of Stock on March 31st
XXX
(Note: If you count before the closing date, you reverse this logic—add purchases and subtract the cost of sales made during the gap.)
Keep Studying!
We hope these Financial Management and Accounting notes help you build a strong foundation for your BBA. LuNotes is your one-stop solution for all Lucknow University notes. Don’t forget to check out our notes for other subjects in your semester!
Found a mistake? We work hard to ensure all notes are 100% accurate and as per the latest LU syllabus. If you spot an error or have a suggestion, please [click here to report it]. (You would link this text to a contact form or email).
By LuNotes – your trusted for Lucknow University Semester exam notes, crafted with love. ❤️
The accounting process involves identifying, recording, and then summarizing financial transactions. The first two steps of this process are Recording (in a Journal) and Classifying (in a Ledger).
This guide covers the entire process, from understanding the Golden Rules of Accounting to creating journal entries and posting them to ledger accounts.
Part 1: The Journal (The Book of Original Entry)
In accounting, a Journal is the very first book where all day-to-day business transactions are recorded. Because it’s the first place transactions are entered, it is known as the ‘Book of Original Record’ or ‘Book of Primary Entry’.
The word “Journal” comes from the French word ‘Jour’, which means “day.” Transactions are recorded in chronological order (in the order they occur). The act of recording a transaction in the journal is called “Journalising”.
Golden Rules of Accounting (How to Debit and Credit)
To “journalize” a transaction, you must know what to debit (Dr.) and what to credit (Cr.). The rules for this are based on the three types of accounts:
Personal Account
What it is: Accounts for all persons, firms, companies, and representative groups (e.g., Mr. Kamlesh’s A/c, SBI Bank A/c, Outstanding Salary A/c).
The Rule:
Debit the Receiver
Credit the Giver
Real Account
What it is: Accounts for all assets and properties the business owns (e.g., Cash, Machinery, Furniture, Goodwill).
The Rule:
Debit What Comes In
Credit What Goes Out
Nominal Account
What it is: Accounts for all expenses, losses, incomes, and gains (e.g., Salary A/c, Rent A/c, Interest Received A/c, Sales A/c).
The Rule:
Debit All Expenses and Losses
Credit All Incomes and Gains
How to Pass a Journal Entry (Proforma)
A journal entry is a systematic record of a transaction. The account to be debited is written first with “Dr.” at the end. The account to be credited is written on the next line, indented, and starts with the word “To”.
This is the standard format (or “proforma”) of a journal:
Proforma of a Journal
| Date | Particulars | L.F. | Amount (Dr.) | Amount (Cr.) |
| :— | :— | :— | :— | :— |
| (Date) | (Account to be Debited) …Dr. | | (Amount) | |
| | To (Account to be Credited) | | | (Amount) |
| | (Being the narration, or explanation of the entry) | | | |
L.F. (Ledger Folio): This column is used to write the page number of the Ledger book where this entry is posted.
Special Types of Journal Entries
1. Compound Journal Entry
A Compound Entry is a single journal entry that involves more than two accounts (e.g., more than one debit and/or more than one credit). This is used when two or more transactions of a similar nature happen on the same day.
Example: On Aug 10, you sold goods to ‘Y’ & Co. for ₹30,000 and received ₹20,000 in cash immediately.
Journal Entry
Date
Particulars
L.F.
Dr. (₹)
Cr. (₹)
Aug 10
Cash A/c … Dr.
20,000
Y & Co.’s A/c … Dr.
10,000
To Sales A/c
30,000
(Being goods sold and partial payment received)
2. Opening Journal Entry
An Opening Entry is the very first entry passed in the journal at the beginning of a new financial year. Its purpose is to record all the closing balances of assets and liabilities from the previous year’s Balance Sheet. All Assets are debited, and all Liabilities and Capital are credited.
Example: Pass the opening entry on Jan 1, 2006, for Gopinath.
Cash: ₹3,000
Bank: ₹16,000
Stock: ₹30,000
Furniture: ₹5,000
Debtors: ₹21,000
Creditors: ₹18,000
Loan from Ganesh: ₹9,000
The Entry:
Opening Entry – 1 Jan 2006
Date
Particulars
L.F.
Amount (Dr.) (₹)
Amount (Cr.) (₹)
2006
Jan 1
Cash in Hand A/c … Dr.
3,000
Cash at Bank A/c … Dr.
16,000
Stock in Trade A/c … Dr.
30,000
Furniture & Fittings A/c … Dr.
5,000
Sundry Debtors A/c … Dr.
21,000
To Sundry Creditors A/c
18,000
To Ganesh & Co. A/c
9,000
To Capital A/c (Balancing Figure)
48,000
(Being opening balances brought forward)
Part 2: Subsidiary Books (The Sub-division of Journal)
If a business is large, it will have thousands of repetitive transactions (like sales, purchases, and cash payments). Recording every single one in the main Journal would make it too bulky and hard to manage.
To solve this, the Journal is sub-divided into special journals, which are called Subsidiary Books. Each book is used to record one specific type of repetitive transaction.
The 8 Key Subsidiary Books
Cash Book: Records ALL transactions involving cash and bank (receipts and payments). It has both a debit and credit side and acts as both a journal and a ledger account.
Purchase Book (Purchase Day Book): Records ONLY credit purchases of goods (the items you buy to resell).
Sales Book (Sales Day Book): Records ONLY credit sales of goods.
Purchase Return Book (Return Outward Book): Records goods returned to suppliers. This is often based on a Debit Note.
Sales Return Book (Return Inward Book): Records goods returned by customers. This is often based on a Credit Note.
Bills Receivable Book: Records all Bills of Exchange and Promissory Notes received from debtors.
Bills Payable Book: Records all Bills of Exchange and Promissory Notes accepted (to be paid to) creditors.
Journal Proper (or General Journal): This is the “real” journal. It is used to record all transactions that cannot be recorded in any of the other 7 subsidiary books.
What Goes into the Journal Proper?
The Journal Proper is used for all non-repetitive, non-cash, and non-goods transactions. This includes:
Opening Entries (as shown above)
Closing Entries (at the end of the year)
Adjustment Entries (e.g., for depreciation, outstanding salaries)
Rectification Entries (to correct mistakes)
Credit Purchase/Sale of Assets:
If you buy Goods on credit, it goes in the Purchase Book.
If you buy Furniture on credit, it goes in the Journal Proper. (Entry: Furniture A/c ...Dr. / To Supplier's A/c)
Part 3: The Ledger (The Principal Book of Accounts)
While the Journal records transactions as they happen, it doesn’t provide a complete picture of an account. A Journal doesn’t answer queries like:
How much is the total amount due from a specific debtor?
How much do we owe to a specific creditor?
What is the total balance of our Cash account?
To answer these, we prepare the Ledger. The Ledger is the principal book of accounts where all transactions from the journal are classified and grouped into individual accounts. It is a set of all accounts (Personal, Real, and Nominal).
Forms of Ledger
Bound Ledger: The traditional method where the ledger is a single, bound notebook.
Loose-Leaf Ledger: A more modern and flexible method where each account is on a separate, loose sheet. This allows for new pages to be added, old accounts to be removed, and accounts to be easily rearranged.
Part 4: Posting (From Journal to Ledger)
Posting is the process of transferring entries from the Journal (or Subsidiary Books) to their respective accounts in the Ledger.
If a journal entry debits the Rent Account, posting involves going to the Rent Account in the ledger and recording that amount on its debit side.
Proforma of a Ledger Account
A ledger account is presented in a “T” format, with a debit (Dr.) side on the left and a credit (Cr.) side on the right.
Dr. (Debit Side) Name of Account Cr. (Credit Side)
| Date | Particulars | J.F. | Amount (₹) | Date | Particulars | J.F. | Amount (₹) |
| :— | :— | :— | :— | :— | :— | :— | :— |
| | | | | | | | |
J.F. (Journal Folio): This column is used to write the page number of the Journal where the original entry is located.
Rules of Posting
The word “To” is used before the account name written on the debit side of a ledger account.
The word “By” is used before the account name written on the credit side of a ledger account.
All accounts from the Journal are opened in the Ledger.
If an account is debited in the Journal, the posting in the Ledger will be on the debit side of that account.
If an account is credited in the Journal, the posting in the Ledger will be on the credit side of that account.
Crucial Rule: The name of the account being posted is not written in the particulars. Instead, you write the name of the other account in the journal entry.
Example: For the entry Rent A/c Dr. To Cash A/c, when you post to the Rent A/c, you will write “To Cash A/c” on the debit side. When you post to the Cash A/c, you will write “By Rent A/c” on the credit side.
Part 5: Balancing an Account
At the end of an accounting period (e.g., a month or year), the businessman needs to know the final position of each account. Balancing is the process of totaling the debit and credit sides of an account to find the net difference.
How to Balance
Total both the debit side and the credit side separately.
Find the difference between the two totals.
Write this “difference” on the side that has the smaller total, so the two totals become equal.
Label this difference as “By Balance c/d” (carried down) if you wrote it on the credit side, or “To Balance c/d” if you wrote it on the debit side.
Finally, carry this balance down to the opposite side of the account below the total, labeling it “To Balance b/d” (brought down) to start the next period.
Balancing Different Types of Accounts
Asset Accounts (Real Accounts): These are balanced and will almost always have a Debit Balance (e.g., Cash, Plant, Furniture).
Liability Accounts (Personal Accounts): These are balanced and will almost always have a Credit Balance (e.g., Creditors, Loans).
Capital Account (Personal Account): This is balanced and will have a Credit Balance.
Expense & Revenue Accounts (Nominal Accounts): These accounts are not balanced. They are simply totaled at the end of the year. The totals are then transferred to the Trading and Profit & Loss Account to find the net profit or loss.
Part 6: Comprehensive Example (Journal -> Ledger -> Balancing)
Let’s record the following transactions in a Journal and then post them into a Ledger.
Transactions:
Jan 1: Commenced business with cash ₹50,000
Jan 3: Paid into bank ₹25,000
Jan 5: Purchased furniture for cash ₹5,000
Jan 8: Purchased goods and paid by cheque ₹15,000
Jan 8: Paid for carriage ₹500
Jan 14: Purchased Goods from K. Murthy ₹35,000
Jan 18: Cash Sales ₹32,000
Jan 20: Sold Goods to Ashok on credit ₹28,000
Jan 25: Paid cash to K. Murthy in full settlement ₹34,200 (Discount = ₹800)
Jan 28: Cash received from Ashok ₹20,000
Jan 31: Paid Rent for the month ₹2,000
Jan 31: Withdrew from bank for private use ₹2,500
Journal
Date
Particulars
L.F.
Amount (Dr.) (₹)
Amount (Cr.) (₹)
Jan 1
Cash A/c …Dr.
50,000
To Capital A/c
50,000
(Commenced business with cash)
Jan 3
Bank A/c …Dr.
25,000
To Cash A/c
25,000
(Cash paid in the Bank)
Jan 5
Furniture A/c …Dr.
5,000
To Cash A/c
5,000
(Purchased furniture for cash)
Jan 8
Purchase A/c …Dr.
15,000
To Bank A/c
15,000
(Purchased goods and paid by cheque)
Jan 8
Carriage A/c …Dr.
500
To Cash A/c
500
(Cash paid for carriage charges)
Jan 14
Purchase A/c …Dr.
35,000
To K. Murthy
35,000
(Goods purchased on credit)
Jan 18
Cash A/c …Dr.
32,000
To Sales A/c
32,000
(Goods sold for cash)
Jan 20
Ashok …Dr.
28,000
To Sales A/c
28,000
(Goods sold to Ashok credit)
Jan 25
K. Murthy …Dr.
35,000
To Cash A/c
34,200
To Discount A/c
800
(Cash paid to K. Murthy in full settlement)
Jan 28
Cash A/c …Dr.
20,000
To Ashok
20,000
(Cash received from Ashok on Account)
Jan 31
Rent A/c …Dr.
2,000
To Cash A/c
2,000
(Cash paid for rent)
Jan 31
Drawings A/c …Dr.
2,500
To Bank A/c
2,500
(Cash withdrawn from bank for domestic use)
Dr. Cash A/c Cr.
Date
Particulars
J.F.
Amount (₹)
Date
Particulars
J.F.
Amount (₹)
Jan 1
To Capital A/c
50,000
Jan 3
By Bank A/c
25,000
Jan 18
To Sales A/c
32,000
Jan 5
By Furniture A/c
5,000
Jan 28
To Ashok
20,000
Jan 8
By Carriage A/c
500
Jan 25
By K. Murthy
34,200
Jan 31
By Rent A/c
2,000
Jan 31
By Balance c/d
35,300
Total
1,02,000
1,02,000
Feb 1
To Balance b/d
35,300
Dr. Capital A/c Cr.
Date
Particulars
J.F.
Amount (₹)
Date
Particulars
J.F.
Amount (₹)
Jan 31
To Balance c/d
50,000
Jan 1
By Cash A/c
50,000
Total
50,000
50,000
Feb 1
By Balance b/d
50,000
Dr. Bank A/c Cr.
Date
Particulars
J.F.
Amount (₹)
Date
Particulars
J.F.
Amount (₹)
Jan 3
To Cash A/c
25,000
Jan 8
By Purchase A/c
15,000
Jan 31
By Drawings A/c
2,500
Jan 31
By Balance c/d
7,500
Total
25,000
25,000
Feb 1
To Balance b/d
7,500
Dr. Furniture A/c Cr.
Date
Particulars
J.F.
Amount (₹)
Date
Particulars
J.F.
Amount (₹)
Jan 5
To Cash A/c
5,000
Jan 31
By Balance c/d
5,000
Total
5,000
5,000
Feb 1
To Balance b/d
5,000
Dr. Purchase A/c Cr.
Date
Particulars
J.F.
Amount (₹)
Date
Particulars
J.F.
Amount (₹)
Jan 8
To Bank A/c
15,000
Jan 31
By Trading A/c
50,000
Jan 14
To K. Murthy
35,000
(Total transferred)
Total
50,000
50,000
Dr. Carriage A/c Cr.
Date
Particulars
J.F.
Amount (₹)
Date
Particulars
J.F.
Amount (₹)
Jan 8
To Cash A/c
500
Jan 31
By Trading A/c
500
Total
500
(Total transferred)
500
Dr. K. Murthy’s A/c Cr.
Date
Particulars
J.F.
Amount (₹)
Date
Particulars
J.F.
Amount (₹)
Jan 25
To Cash A/c
34,200
Jan 14
By Purchase A/c
35,000
Jan 25
To Discount A/c
800
Total
35,000
35,000
Dr. Sales A/c Cr.
Date
Particulars
J.F.
Amount (₹)
Date
Particulars
J.F.
Amount (₹)
Jan 31
To Trading A/c
60,000
Jan 18
By Cash A/c
32,000
(Total transferred)
Jan 20
By Ashok
28,000
Total
60,000
60,000
Dr. Ashok’s A/c Cr.
Date
Particulars
J.F.
Amount (₹)
Date
Particulars
J.F.
Amount (₹)
Jan 20
To Sales A/c
28,000
Jan 28
By Cash A/c
20,000
Jan 31
By Balance c/d
8,000
Total
28,000
28,000
Feb 1
To Balance b/d
8,000
Dr. Rent A/c Cr.
Date
Particulars
J.F.
Amount (₹)
Date
Particulars
J.F.
Amount (₹)
Jan 31
To Cash A/c
2,000
Jan 31
By P&L A/c
2,000
Total
2,000
(Total transferred)
2,000
Dr. Drawings A/c Cr.
Date
Particulars
J.F.
Amount (₹)
Date
Particulars
J.F.
Amount (₹)
Jan 31
To Bank A/c
2,500
Jan 31
By Balance c/d
2,500
Total
2,500
2,500
Feb 1
To Balance b/d
2,500
(Note: The Discount A/c would also be opened and its total transferred to the P&L A/c.)
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