Recording of Transactions

Points to Remember A transaction is an event or happening that changes an organisation’s financial position and/or its earnings. A source document or voucher is a document which provides evidence of a company’s transaction. The accounting equation is: Assets= Liabilities + Capital. Journal is a day book or daily record wherein the transaction are recorded […]

Accounting Equations

Accounting Equations Accounting Equation is the double entry system of accounting that is based on accounting equations where the relationship between assets, liabilities and capital can be expressed in the form of equations. The Accounting equation signifies that the assets of a business are always equal to the total of its liabilities and capital (owner’s […]

Accounting Standards 2018

Accounting Standards

Accounting Standards The Institute of Chartered Accountants of India (ICAI) had established an Accounting Standards Board (ASB) in 1977 with the aim of developing accounting standards and issuing guidelines for implementation thereof. The Following brief gives the various standards issued by the ICAI as on March 2006. AS1 – Disclosure of Accounting Policies (January 1979) […]

Financial Statements

Financial Statements

Financial Statements A Financial Statement is a periodic report prepared from the accounting records of a company. Financial statements include the profit and loss statement (or income statement), balance sheet and cash flow statement. Financial statements are usually compiled on a quarterly basis or annual basis. For reporting convenience, the profit and loss account is […]

Accounting Cycle

Accounting Cycle The term ‘Accounting Cycle’ refers to the sequence of accounting procedures followed in recording, classifying and summarising business transactions. In starts with identification of business transactions and ends with the adjustment entries for prepaid and outstanding expenses. The sequence of accounting procedures is as follows. Identification of transactions. Preparation or receipt of business […]

Basic Terms in Accounting

Basic Terms in Accounting Entity Entity has a definite individual existence. Business entity is an identifiable business enterprise such as Super Bazaar, Jewellers and so on. An accounting system is always devised for a specific business entity (also called accounting entity). Transaction Transaction is an event involving some value between two or more entities. It […]

Basic Accounting Concepts

Basic Accounting Concepts Assumptions are traditions and customs which are developed over a period of time and well-accepted by the profession. They provide a foundation for recording transactions and preparing financial statements. They are also referred to as ‘Accounting Concepts’ and form the basis of systematic accounting practices. The following are some important basic accounting […]

Branches of Accounting

Branches of Accounting

Branches of Accounting Economic development and technological advancement have resulted in an increase in the scale of operations of business, leading to the advent of the company from of organisation. As management functions become complex, the importance of accounting increases. Special branches of accounting developed which are briefly explained as follows. Financial Accounting: The purpose […]