TYPES OF REVENUE:
1. Sales: The.total price of goods sold
2. Interest earned
3. Fees earned
4. Rent earned
5. Commission earned
22. EXPENSES:
Expenses are the costs of the goods and services used up in thei process of obtaining revenue.
Or ' . ..'.."'.
Expenses are the cost of producing revenue in a particular accounting period.
Or
An expense is a sacrifice, or cost incurred to generate revenue:
For example, salaries for employees, telephone charges, rent of the building, insurance transportation etc. All these costs are necessary to attract and serve the customers and thereby to obtain revenue. Expenses are sometimes also referred to as the "cost of doing business" or "expired costs".
23. NET INCOME OR NET PROFIT:
Net income or net profit is simply the amount by which die "revenue" for a particular period time exceed the "expenses" incurred to generate them.
Net income or net profit = Revenue- Expenses:
ACCOUNTING PRINCIPLES ,.
It has already been stated in this chapter that Accounting is the language of business tt which economic information is communicated to all the parties concerned. In order to make this languaj easily understandable all over the world, it is necessary to frame or make certain unifonn standards whicl are acceptable universally. These standards are termed as "Accounting Principles".
Accounting principles may be defined as those rules of action or conduct which are adopted by accounts universally while recording accounting transactions. They are a body of doctrines common!] associated with the theory and procedures of accounting. They are serving as an explanation of practices and as a guide for selection of conventions or procedures where alternatives exist. principles can be classified into two groups. .
(i) Accounting concepts (ii) Accounting conventions.
Accounting Concepts:
Going concern concept Cost concept
Accounting period concept Realization concept.
The term 'concepts' includes those basic assumptions or conditions on which the science o^ accounting is based. The following are the important accounting concepts:
(i) Separate Entity Concept (ii)
(iii) Money measurement concept (iv)
(v) Dual Aspect concept (vi)
VII> Matching concept (viii)
Thursday, July 22, 2010
Accounting Basic Element
ASSETS:
Assets are the economic resources (having certain value) owned by a business on a particular date I which are expected to benefit the future operation of the business.
Or
Assets are the properties and possessions of a business both tangible (have physical existence) and e fliave no ohvsical existence).
te (have no physical existence).
Or
Assets are the things having certain value possessed by a business and receivable by a business on date. For example, cash, furniture, building, land, machinery, stock of goods, Debtors or receivable, Bank balance, 'Goodwill etc.
LIABILITIES:
Liabilities are the debts or obligations of a business.
Or
The outsider's (creditors etc.) claims against the assets of the business are known as "Liabilities". are two main parties who have chums, against the assets of a business; (a) Owner's claim; (b) claims. The owner's claim against the assets of a business is blown as owner's equity and 's claims against the assets of the business are known as "liabilities."
Or
Liabilities mean the total amount which a business is legally bound id pay to the outsiders, e.g, i, Bills payable, Accounts payable, Bank loan etc.
ACCOUNTING PERIOD:
It is a span of time for which a business generally prepares its financial statements (the statement to know the profit or loss of a business and to mow its financial position). Mostly the financial are prepared for one year but they may also be prepared for one month or for one quarter.
REVENUE:
All business organisations are engaged in providing goods or services to theif customers. The which a business charges its customers for these goods or services, measures the revenue of the
tOr It is the price of goods sold or services provided by a business to its customers.
Revenue is the inflow of assets (cash or debtors) in return for services performed or goods (sold) during an accounting period.
Or
It is inflow of cash and debtors (receivable) in exchange for goods sold or services rendered during mting period.
Friday, July 16, 2010
CAPITAL OR OWNER'S EQUITY
CAPITAL OR OWNER'S EQUITY
high bridge capital
equity capital
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To understand. this Tenn, recall that business is an entity (organization) separate from its owner or owners. Equities mean the sources of funds provided to start or" to operate a business entity. Now the question is; who provides funds to a business unit Mainly there are two sources of funds:
(a) Funds supplied by the owner/owners.
(b) Funds supplied by the external parties like bank etc.
So, the amount of cash or goods invested (supplied) by the owner/owners in a business] unit is known as "capital" or owner's equity.
Or
Capital is the money or moneys worth borrowed by a business unit from its owner
Or
It is the claim or right of the owner to owners against the assets (properties etc. possessed by business) of the business.
Or It is the source of funds provided by the owner/owners of the business.
Or It is a part of the total equity which is supplied by the owner/owners.
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CASH DISCOUNT
Cash Discount
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It is a deduction or allowance given by a creditor to a debtor if the amount due is paid by the debtor before the due dale, or it is a reduction in price (usually 2% or less) offered by manufacturers or wholesalers (creditors) to encourage customers, (debtors) to pay their debts within a specified discounted period. For example, X sold .goods to Y (a customer) for Rs. IQOO on credit basis. It means, X is creditor and Y is debtor. X offers an allowance of 2% to Y, if he will pay his debts within 15 days. It means, if Y pays his debts within 15 days, then he will pay only Rs. 980 (1000 - 20) to X. Such a discount is known as' Tash Discount".
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CREDITORS OR ACCOUNTS PAYABLE:
CREDITORS OR ACCOUNTS PAYABLE:
creditor
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When goods are purchased from the suppliers (sellers) on credit basis, creditors come into existence. Creditors are the persons or suppliers from whom goods have been purchased on credit basis and bo whom the money is to be paid in near future. The accounts of such persons (suppliers) are known as accounts payable". Accounts payable means, the amount which a business expects to pay to its suppliers for goods purchased or services received from them on credit basis.
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DEBTORS OR ACCOUNTS RECEIVABLE
DEBTORS OR ACCOUNTS RECEIVABLE:
When goods are sold to the customers on credit basis (credit sales are made to customers), debtors come into existence. Debtors are Ac persons or customers to whom goods have been sold on credit basis and from whom the business is to receive money in near future. The accounts of such-customers are known as "Accounts Receivable". For example, we sold goods to A for Rs. 3000. toB forRs. 2000 and to C for Rs. 4000 on credit basis. The amount receivable from them (A, B and C) is known as "Debts" and the three customers, A, B and C are our debtors or accounts receivable.
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Accouting best Notes ever
Purchases returns" or "Returns to suppliers". For example, we purchased 100 radio sets (goods) from Lahore Electronics for Rs. 15000. On receiving the delivery of goods, it is found that 10 radio sets are of inferior quality. The return of these 10 radio sets to the seller (Lahore Electronics) will be a case of purchases returns.
7. PURCHASES DISCOUNT AND SALES DISCOUNT:
The Concession given by the supplier to the buyer on purchases of goods is known as "Purchases discount" to the buyer and "Sales discount" to the seller (supplier).
8. ALLOWANCES:
Sometimes, the customers (buyers) find that goods purchased have minor defects. In that case, the seller may agree to reduce the price of damaged or defective goods to induce the. buyer to keep the goods. Such reduction in price is known as "Purchases allowance" to the buyer and "Sales allowance" to the seller.
9. SALES:
We know that goods are purchased for selling purposes^ When these goods are sold to customers at a specific price, it is said that sales have been made. For example, we purchased goods worth Rs. 5000 (our purchases). Suppose, these goods have been sold at a price of Rs. .6000 — in accounting language it will be said that sales have been made at Rs. 6000. So goods sold are called "Sales".
10. CASH SALES:
If goods are sold to customers at a specific price and price of the goods is received from them at the time of sale of goods, such sales are known as "Cash sales". For example, we sold goods to a customer, Mr. A for Rs. 2000 on 10th January, 2005 and received the cash from him on the same date, it will be a case of cash sales.
11. CREDIT SALES;
If goods are sold to a customer and he does not pay the price of goods at the same time but agrees to make payment on some future date, the sales are called "credit sales" or "Sales on account." For example, we sold goods to Mr. X for Rs. 3000 on 15th January, 2005 and he agreed to make payment on 3Ist January, 2005, it will be a case of credit sales or sales on account.
12. SALES RETURNS OR RETURNS INWARDS:
If a customer to whom goods have been sold finds that the goods are defective, unsatisfactory, below standard or not according to specification, he may return these goods to the seller. To the seller, such return of goods is known as "Sales returns" or "Returns Inwards" or "Returns from customers.
13. TRADE DISCOUNT:
At the time of selling goods, the manufacturer or wholesaler allows retailers such a discount (concession). It is allowed at a certain percentage of the listed or catalog price. For example, the list price of the goods is Rs. 30000, and the wholesaler allows a trade discount of 10% on the listed price to the retailer. It means the net price of the goods is 27000 (30000-3000). The trade discount enables the retailer: to sell goods at die listed price; and the customer can be sure about the fair {nice of the goods. It may be noted that both the buyer and seller will record Rs. 27000 (not Rs. 30,000) in their books of account. In other words trade discount is not recorded in books of account Thus, discount allowed by manufacturer or wholesaler at the time of selling goods to retailer as a deduction from the listed price or catalog price, is called Trade Discount.
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7. PURCHASES DISCOUNT AND SALES DISCOUNT:
The Concession given by the supplier to the buyer on purchases of goods is known as "Purchases discount" to the buyer and "Sales discount" to the seller (supplier).
8. ALLOWANCES:
Sometimes, the customers (buyers) find that goods purchased have minor defects. In that case, the seller may agree to reduce the price of damaged or defective goods to induce the. buyer to keep the goods. Such reduction in price is known as "Purchases allowance" to the buyer and "Sales allowance" to the seller.
9. SALES:
We know that goods are purchased for selling purposes^ When these goods are sold to customers at a specific price, it is said that sales have been made. For example, we purchased goods worth Rs. 5000 (our purchases). Suppose, these goods have been sold at a price of Rs. .6000 — in accounting language it will be said that sales have been made at Rs. 6000. So goods sold are called "Sales".
10. CASH SALES:
If goods are sold to customers at a specific price and price of the goods is received from them at the time of sale of goods, such sales are known as "Cash sales". For example, we sold goods to a customer, Mr. A for Rs. 2000 on 10th January, 2005 and received the cash from him on the same date, it will be a case of cash sales.
11. CREDIT SALES;
If goods are sold to a customer and he does not pay the price of goods at the same time but agrees to make payment on some future date, the sales are called "credit sales" or "Sales on account." For example, we sold goods to Mr. X for Rs. 3000 on 15th January, 2005 and he agreed to make payment on 3Ist January, 2005, it will be a case of credit sales or sales on account.
12. SALES RETURNS OR RETURNS INWARDS:
If a customer to whom goods have been sold finds that the goods are defective, unsatisfactory, below standard or not according to specification, he may return these goods to the seller. To the seller, such return of goods is known as "Sales returns" or "Returns Inwards" or "Returns from customers.
13. TRADE DISCOUNT:
At the time of selling goods, the manufacturer or wholesaler allows retailers such a discount (concession). It is allowed at a certain percentage of the listed or catalog price. For example, the list price of the goods is Rs. 30000, and the wholesaler allows a trade discount of 10% on the listed price to the retailer. It means the net price of the goods is 27000 (30000-3000). The trade discount enables the retailer: to sell goods at die listed price; and the customer can be sure about the fair {nice of the goods. It may be noted that both the buyer and seller will record Rs. 27000 (not Rs. 30,000) in their books of account. In other words trade discount is not recorded in books of account Thus, discount allowed by manufacturer or wholesaler at the time of selling goods to retailer as a deduction from the listed price or catalog price, is called Trade Discount.
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Thursday, July 15, 2010
FORMS OF BUSINESS ORGANIZATION
FORMS OF BUSINESS ORGANIZATION
Single or sole proprietorship:
The simplest form of business organization "to organize and operate" is a single or sole proprietorship. This is the most common form of ownership and is found in business such as small retail aborts, service stations etc. The owner is the only one in control and makes all management decisions.
Partnership:
In a partnership, ownership is divided between two or more persons who agree to share their] property and skills to start and operate a business: Like the single proprietorship, 9 partnership business is]
simple to organise.
i
(c) Joint Stock Company:
A joint stock company is* formed under the Companies Ordinance, 1984 and has the legal right tol act as a person. It may be owned by many people. A company has its own name, in which it can buy, own,] and sell property; make contracts; borrow money; and take court action. The persons who have made] investment in the company are known as shareholders.
2. GOODS OR MARCHANDISE
In accounting the word "Goods" has a special meaning. It refers to something which has beer purchased by a trader for resale purposes or anything which has been manufactured for selling purposes.] For example, if a trader purchases furniture for use in the business, it will not be regarded as "goods", but il it is purchased for resale, it will be regarded as "goods". The same article may be "gooaV-for one trader but may not be so to another trader. For -example, turnitiue is not' "goods" for a book seller; but it will regarded as "goods" to a furniture -dealer.
Thus, ctah will be "goods" to a cloth dealer
Watches will be "goods" to a Watch dealer
Books will be "goods" to a Book - Seller
Stationery will be "goods" to a Stationery dealer. But watches, books or stationery will not be considered as "goods" to a cloth dealer.
3. PURCHASES:
In accounting language the word "Purchases" has a special meaning. When saleable goods 'bought in a business, it is said that "purchases" have been made. For example, to a cloth dealer, whenevc cloth Is purchased, il will not be necessary to mention that cloth has been purchased ( simply it wilt be saic mat purchases have been matte. On the other hand, if stationery is purchased, then it will be essential mention mat stationery has been purchased.
4. CASH PURCHASES:
If goods are purchased from a supplier and payment is made to him at the same time, sucl
purchases are known as "Cash Purchases". For example, Mr. X purchased goods from a seller, Mr. Y, to
Rs. 5000 on 1st January, 2005, and payment is made to the seller (Mr. Y) at the same date (1.1.2005), it wil(
be a case of cash purchases. ,
5. CREDIT PURCHASES OR "PURCHASES ON ACCOUNT:
When goods are purchased from a seller and payment is not made to him at the same time, rathe the payment is arranged to be made at some future date, such purchases are known as "credit purchases" "Purchases on account". For example, Mr. A purchased goods from Mr. B for Rs. 5000 on 1st January^ 2005 and Mr. A agreed to make the payment of goods on 15th January, 2005 (payment has not been on 1.1.2005), it wilt be a case of credit purchases. On 15th January Mr. A will pay Rs. 5000 to Mr. B.
6. PURCHASES RETURNS OR RETURNS OUTWARDS:
Goods once purchased may subsequently be sent back to the seller for certain reasons, i.e. gc are defective, not according to specification, damaged or below standard. Such return of goods to the sell.
IMPORTANT ACCOUNTING TERMS AND CONCEPTS
IMPORTANT ACCOUNTING TERMS AND CONCEPTS
Profit making organisations are known as businesses. There are three main types of businesses; those selling services (such as dry cleaners, Motor workshops. Beauty salons, airlines etc.); those selling foods (such as food sellers, automobile dealers etc.); those manufacturing goods (such as automobile manufacturers, fans industries, sugar mills etc.).
A business entity is an economic unit, which enters into business transactions that must be recorded, summarised and repotted. The entity (organisation) is regarded as separate from its owner oc owners; the entity owns its own property and has its own debts. The purpose of accounting is to provide weful information about an organisation (an entity) to peofle who need such information but not about the personal affairs of me owner or owners. So it should be remembered that accounting is done for business activities (what is happening in the business organisation) and it is not concerned with the personal or private matters of the owner. For example, the owner purchases furniture for business use(this is a business activity and it should be recorded in books of accounts. But if he purchases furniture for his domestic use, it wilt not be considered as a business activity and will not be recorded in books of accounts. In the same •ay, the owner may have a personal bank account, a car, a house, and other property, but since these things are not a pan of the business, they are not included in the record of the business unit So, each organisation lor which accounting is done is an independent entity, separate from its owners, managers, customers, creditors, and all other persons and entities with which it deals.
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Wednesday, July 14, 2010
Objects of Accouting
Financial information is necessary, in order to run a business in an efficient manner. Reliable
information will be available only through keeping proper books of accounts.
Proper accounting is essential, if money is to be borrowed for the purpose of business. The tender will only agree to lend money when he is satisfied as to the solvency of the borrower. Information available from books of accounts is the means of measuring such solvency.
[3. Cash in hand can be verified and any defalcation can be detected, if proper books of accounts are maintained.
4. Payment of sales tax and income tax is only possible if books of accounts are maintained.
In case of any dispute, books of accounts can be produced hi the court of law as a documentary evidence.
Government fixes up fair prices, formulates industrial policy, prepares.economic plans, decides import-export quotas and does many other functions on the basis of accounting information available from books of accounts.
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Bracnches of Accounting
BRANCHES OF ACCOUNTING
In order to meet the .ever increasing demands made on accounting by different interested party* (such as owners, management, creditors, taxation authorities etc.) the various branches of accounting come into existence:
1.
FINANCIAL ACCOUNTING:
The main purpose of financial accounting is to ascertain the true result (profit or loss) of business operations during a particular period of time and to state the financial position of the business on particular point of time. Financial accounting produces general purpose reports for use by the great of people who are interested in the organization bu.1 who are not actively engaged in its day operation.
2. COST ACCOUNTING:
The main object of cost accounting is to determine the cost of goods manufactured or produced P the business. It also helps the management of the business in controlling the costs by indicating avoidable losses and wastes.
3. MANAGERIAL ACCOUNTING:
The object of this accounting is to communicate the relevant information periodically to management of the business to enable it to take suitable decisions.
It should be remembered that in this book, we arc concerned only with financial accounting Financial accounting is the oldest and the other branches have developed from it. The objects of financial accounting can only be achieved by recording business transactions in a systematic manner according set of principles.
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In order to meet the .ever increasing demands made on accounting by different interested party* (such as owners, management, creditors, taxation authorities etc.) the various branches of accounting come into existence:
1.
FINANCIAL ACCOUNTING:
The main purpose of financial accounting is to ascertain the true result (profit or loss) of business operations during a particular period of time and to state the financial position of the business on particular point of time. Financial accounting produces general purpose reports for use by the great of people who are interested in the organization bu.1 who are not actively engaged in its day operation.
2. COST ACCOUNTING:
The main object of cost accounting is to determine the cost of goods manufactured or produced P the business. It also helps the management of the business in controlling the costs by indicating avoidable losses and wastes.
3. MANAGERIAL ACCOUNTING:
The object of this accounting is to communicate the relevant information periodically to management of the business to enable it to take suitable decisions.
It should be remembered that in this book, we arc concerned only with financial accounting Financial accounting is the oldest and the other branches have developed from it. The objects of financial accounting can only be achieved by recording business transactions in a systematic manner according set of principles.
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ACCOUNTING VERSUS ACCOUNTANCY
ACCOUNTING VERSUS ACCOUNTANCY
The two words "Accounting" and "Accountancy" are often used to mean the same thing. But it not correct Accountancy is the main subject(Accounting is one of its branches. The word "Accountancy tar extensive; i-e. the scope of accountancy is far wide .and extensive compared to Accounting. It covers entire body of theory and practice, e.g. Book-keeping, Accounting, costing, auditing, Taxation etc.
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The two words "Accounting" and "Accountancy" are often used to mean the same thing. But it not correct Accountancy is the main subject(Accounting is one of its branches. The word "Accountancy tar extensive; i-e. the scope of accountancy is far wide .and extensive compared to Accounting. It covers entire body of theory and practice, e.g. Book-keeping, Accounting, costing, auditing, Taxation etc.
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BOOK-KEEPING VERSUS ACCOUNTING
A great deal of efforts goes into gathering and processing information about a concern before the facts end up in an accounting report. Much of the work required is clerical in nature and can be performed by office workers, machine and computers. The functions of Book-Keeping is to properly record the financial transactions in the books of account. But the function of Accounting is more extensive ( it has many other functions to do except recording transactions, e.g. classification, summarisation and interpretation'of transactions. Thus we see that Book-Keeping is confined to recording aspect of Accounting (It is a small and the simplest part of Accounting. Both .represent two different phases of the main subject "Accountancy". Book-Keeping is the first stage, while Accounting is the final stage, that is why, it is said
that Accounting starts where Book-Keeping ends. The function of Book-Keeping ends with the recording of transactions in the books of account. But the function of Accounting Is to classify the recorded transactions, summarise them, interpret them and collect and communicate necessary information to the management and olhej interested persons. Management performs its function on the basis of mis information, e,g. laying down rules and regulations, taking so many vitaUdecisions etc. Thus we may say that the function of Book-Keeping is primarily of clerical nature, while that of Accounting is concerned with organisational and administrative matters (it is more important and responsible.
Apparently, the functions of Book-Keeping seem to be less important than Accounting, but its necessity can hardly be denied. lust an article cannot be produced without raw material, similarly accounting function cannot be done without obtaining necessary data from Book-Keeping. Again, if there is any defect in raw material the article produced out of it will also be defective. Similarly, if there be any error or mistake in Book-Keeping, the accounting job will also be wrong and create anomalous situation. . Thus we can conclude that "Book-Keepers perform the routine, repetitive tasks of collecting and processing j financial information. Accountants are responsible for designing the systems within which Book-Keepcrs work; supervising the day-to-day work of book-keepers; recording unusual and complex transactions,! preparing, analysing and interpreting accounting reports; auditing the records; *nd -performing a'variety of] other complex accounting activities.
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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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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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accounting firms
accounting information
accounting assets
inventory accounting
small business accounting
financial statements
investment accounting
fixed asset accounting
accounting profit and loss
ACCOUNTING: A BUSINESS LANGUAGE
ACCOUNTING: A BUSINESS LANGUAGE
Accounting is a language, a system that •communicates information. It is often referred to as d language of the business, although it is just as important in the operation of government agencies, cmtt colleges and other kinds of organisations.
You probably have some idea already of what the term accounting means. It is frequently used i every day conversation to mean "answering for responsibility," Managers of business concerns a answerable to owners, creditors, labour unions and Government agencies etc. Managers of govenune units are answerable to chief executives, boards, taxpayers and others. In fact, accounting was developed \ people, who were seeking better ways to gather and report useful information about organisations.
Some type of orderly system is needed to account for an organisation of any size and complex!! An accounting system is used to collect, process and report needed data about a business, government am or other type of association. Information* is usually .collected, processed and reported in financial ten which simply means that 'money' is the basis of measurement.
Many authors have defined the term "Accounting" in different ways. There is difference of open among the authors as to its precise definition as'the term 'accounting is so broad that it is difficult to give precise definition. However, several possible definitions are given below:
"The act of collecting, processing, reporting, analyzing, interpreting and projecting financi
information".
-"The system of providing quantified information about an organisation to people who need information."
accounting
BRS
Final Accounts
bank statement
Currency
money
ACCA Notes
PHD Notes
ACCA Books
payroll accounting
accounting firm
accounting software
accounting service
investment accounting
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