📖 Executive Summary

The development of an accounting module for an AITC homes society panel necessitates a deep understanding of financial management principles, operational workflows, and, critically, the specific regulatory landscape of Nepal.

Their primary objective is to manage shared community assets and services for the collective benefit of their members, rather than to generate profit for shareholders.

The core finding underscores the mandatory adoption of accrual-based fund accounting and double-entry bookkeeping, as stipulated by the Nepal Accounting Standard for Not-for-Profit Organizations (NAS for NPOs)

🅰️ Core Accounting Concepts

2.1 Types

• In Details

1. Double-Entry Bookkeeping: Every financial transaction affects at least two accounts - one debited and one credited - ensuring the accounting equation (Assets = Liabilities + Equity) always balances6.
2. Accrual Accounting: Revenue is recognized when earned, and expenses when incurred, regardless of when cash changes hands7.
3. Chart of Accounts: A structured list of all financial accounts in the general ledger, categorized into assets, liabilities, equity, revenue, and expenses8.
4. Financial Statements: The three primary financial statements your module should generate9:
   • Balance Sheet (Statement of Financial Position)
   • Income Statement (Profit & Loss Statement)
   • Cash Flow Statement
5. Accounting Equation: Assets = Liabilities + Equity, which forms the basis of the balance sheet and must always remain balanced76.

2.2 a General Ledger

https://www.sage.com/en-us/blog/glossary/what-is-a-general-ledger/#:~:text=A general ledger%2C or GL,complex to do so manually.

A general ledger is the system of record for an organization’s financial transactions.

The chart of accounts within a general ledger is usually divided into at least seven main categories: assets, liabilities, owner’s equity, revenue, expenses, gains, and losses.

The transaction details contained in the general ledger are compiled and summarized at various levels to produce a trial balance, income statement, balance sheet, statement of cash flows, and other financial reports.

The general ledger process refers to the structured method that records financial transactions and organizes them into accounts.

To do this, you’d need to follow these key steps: