Accouting major Concepts

1. CONNECTED WITH A MONETARY EVENT OR TRANSACTION:
Accounting must be in relation to a monetary event or transaction and the event or transaction must be measurable in terms of money. In other words, no accounting is possible for an event or transaction which is not measurable in terms of money, e.g. passing an examination, delivering lecture in a meeting, winning a game etc. These are events no doubt, but since these are not measurable in terms of money, there is no question of their accounting..
2. TRANSACTIONS AftE PROCESSED IN THREE DIFFERENT STAGES:
(•) Recording:
' In the first stage the transactions are recorded chronologically in the books of accounts.
(b) Classifying:
In the second stage the transactions of the same or similar nature are classified and recorded separately.
(c) Summarizing:
In the third stage all the necessary date and information are summarized on the basis of classified record of transactions and communicated to management and other interested persons.
(d) Interpretation:
In order to assertion the true position of a concern all the accounting data and information relating to it are analyzed and interpreted.
AH the above functions are performed on the basis of certain welt-defined and well-coordinated
rules and principles. An accountant must be familiar with all these rules and principles. In accounting we
will study all these rules and principles. >
Book-Keeping:
Book-keeping is the art of recording monetary transactions in the books of account in a proper manner. The books of accounts are recorded in such a way as will enable us to ascertain the complete and accurate result in the least possible time with minimum labor and cost.
Many authors have defined the terms "Book-keeping1 in different ways;
1. "Book-keeping means the recording of transactions, the record -making phase of
Accounting (it is only a small part of the field of Accounting and probably the simplest
pan." - Meigs, Johnson and Meigs.
2. "Book-keeping is the recording branch of Accounting."-- Encyclopaedia Britennica.
3. "Book-keeping is die art of recording in books of accounts the monetary aspect of
commercial or financial transactions." Northcot.
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