Acountng Tems

NOTES

an a t
the
4hasachis in au ficuent manhen and mterpretig the
fUNeTTONS Of ACcOUNTING
jAnbtyngBuoiness transachieno ’trom Vouchers.

Transachom ef monetaymeAsUYe LnIa Jooenals.

natuefotedl into
"CasifyrngTraunsachirsej Same
" Sumakizing balane all accounts at one pace Trial Babe
"ComunicatingFinancial Statements ¢ alance shect t usene.

Book- keeqirg and Aeconting.

Basis efdishittion Book- Keeping Accounting
Suope Concermed wita recordng of et It incluoles clatiting, summar
only,

monetay transachien. 131g aaysmg and so

Coninuncaken the reoults to
wers.

Stage Primary Stage Scondany stage.

objechve To maintain systemahc recors of To calculate net piofit
business. net loss in te business
Nakure Aoutine and clerical. Aualyticae
Shaft inolwed Dene by Tuier level staft Dene lby Senior luel Itatt.
SUBF1¬LOS OF AccoUNTINO

Fiancial Cost Hanagemt Tax

Fibuines
nanciad posiwithh entheof Toial coSt
Per wit cost of Hanagenentin
Ta purpoSes.
Tucone Tax
hep oj balance good aund services the opertimj businaf!
GsT... etc.
Shee. poio duoed tendered
by business.
 QUALITATIVE CH ARACTERISTIcS OF
AcCOUNTING NfORMATION
Accpuntin infamation Shauld be prepaned and phesented in such a
way that uo ab le to depit a dea iew o business enterpsise.
1. eelialaitd
2implies that infosnation hst lae factual and veifiable. And
free from errors.
2. Relevance :
Accounting inyemation must be relevaut to tue ebjectives od enter
-psuse. To be relevnt, intarmaion must help tu users
accounting igoxmahien in mking deeisiens.
3. undersBandalsility
Hcotuh ng in fasmaion shoud loe preeented in such a manner
Huat
Tnved tosl are nderctood easily by their sers Buch ao
s empto yees,ete.

Comporabiuty
It is a vey oeyu qualityt accounting
Frinenciae ttectements shdube contain Vpieieoymaemdata
So that it ean kae compar eol wrte current So that
wrent performance cau lhe co mp ared with past parfom
-unc2.
AccoUNTING TeRMS
1. Buiness Transactien :
Abusines transactiem s an eonomio actiity et busines Haat
clangot financial posihon.
a. Account:
a a recond o all busines tranoachiono elating d a
pattculan person or tem. It is a T-shaped pho fotma.

to the anount fmvested by-the oumen in a husiness. The

ornount invested could be in te josm oy CashJooca, etc-j
4.Phauinge:
er gooda atthdraun by teoner for pesenal use mode
drawing
o total rewenue oveM total erpense ef a lbsines.
Revenue -xpenses.
Puoit =

The exces expenses SVer related nevene us known asle.

Rerenue.
1e% =Gpense -
4. Grain
mentany tpusings bone 4it mes ulting Prom exenh or
transactioms that are inciolental
nciclental to loiness ike patit em
Saleoyfiredaset.
8. Stock.
olate.
t ineudes gooclo nselol en a paricuar
9. frehanes:
amant s
to amont
It aejers to godo lougk y busines fos roaleor
ein produckiem. t can lae of cash orcredit.
10, Punchase retn ?
hen purshaned goado ne setned to Supphr, it ia called
prchase netn,
, Bles

means transfur o goods andl serces foh moneyin narnal

Counse tousiness.

12. Sales Retun

nth Customer rekwns Hu oo to the lousine,
caled sales Return.
13. Debos!
It vefehs to those perseno wse laumes has been sote
goods en credit or payment has mot leen recieed yet.
14. Creditoo
It rejew to thoe persens hose husiness has loght
qoodo on ceredit er payment has not been made yet.
IS. Vauher ?
voucher ço a wutten docunent w'cu is ereatedin
Spport a parhieular trandacen. It may ae in the
fosm a cash memó, invoice or reiept. vouclher it
a
necesany componant o aueb'ing.
16. hcome:
I+ is the difterence between sevenue and expenae.
14. Expese?
tis He amount wed in erder to produce and sel gooob
4 seiee.
18. biscount T
It is te velbate given by te seller to the
ís

Cash discont s allowed to customers in erdler to

alwya ecorded
encouage prompt payments. It is alway
in e boks aceounts.
Trade Qiscount is a d'scont allowed by sles to
Heir cus omend ata fired percentage en the lst
psice goodo, and t is not vecoreledl in tuL books
e4 accout.
19.Bod Delots ::
It rejers toto on amot tat del fat hao not paid eve
d um ber of
emndee and has oirdentien od ajter
te the future;oually due t insdrency. paying
fo. Asset:
es are tthepoperies o
bemgle tessces oened by buuiae
Cagh, machinery, bils reuievabe, et.,.
sels are too types and te are rther
claniied into'.
Non- CuMent Assek ore those oUss ets wieu holo for
lemger period in lbusines and che mot eenveted irto money
or carh witi'n a yean. Example t
bulding,lando, ete.:
" Cunnont Assete ane ttuose ases sich hold
fer shoter
0bsiod in tthe Beuoinss ano ahe converted ito
caoth sitin the time sfan a year. meney or
Non -crhent As sets ore furtther
clasitied nto ?
a) Tangible anek e tose anets ich have
phyeiaal
uistene. GxampleHachinery urniteety
b) utangible nele are those asek ticu do wot haue
aplhuysical eristence and cannot lae touched. fyample
hood wil.
&l. Liabiltes ?
Labiites beiness. t
denotes the amunt uthih a atumess swes to ooh.
Credi tors,Capital, (oans, ete:
Qukstandi'ng fponses.
t is of two types
 " Nem-cwnent iabliieo
reyens bthose wtioh fall due for paynnt in a
It
nlaiely lomger ponisd. tamglei-long termloom.
Cwhent Calalithes
It reters to tuose whic ane to oe gad in tte nea
fuhie. aompleiCreditors, buks toning ponaes
ett.,.

&2. Expenditune ?
It invdues Spendin caoh or incusing a liability fo
purpoe a acquiring asels, goodsçr senies,
Hu
It is
" Revenue Gepnditure neyers to amy espendi h°e, thu fal
lbenetit o which is
peiod . Eample
ecived duing cne aceountng
adaries, rent eto
tae Gpndture setes to erpenolture , the bere
Capi veciered dniy more than one
-fit ey ushih is
yeari Erample ? Hochinery, ete.,.
Deftemed Revenue Eyparcditte eyers to en penditure
whch
usichae revenue in natwre but beneyit
fs ikey to be derired over the yeor,"eranple
Advetisemnt, ete.,:
 Hece neples
NoTES

. Accounting finciples an Grenealy Acceptedl Accountny incipka (tnaa)

ae Skandand set sules and sequlchona that ae necessary to
prepore statements that disclase the proftabitiy ndl solveney ot
aausinexs o vais pauies in a standard
FeA TURES OF ACCOUNTNG PRINOIPLER
1. Accounting Principleo ahe man-made.
2. Acounting principles ane genally accepted.
3. Aecounting pkinciples aue Hurible inatre.
TYPES OF ACCOUNTINCh PRINCIPLes
4. Going Concern Concept :
As per Huis concept it is assumed that e busines atl continue
to enist foh a long piool in te futue and the transachens
che ecoded in t books o buoines en the aAumptien
tuat t is a continuing ontoyphite.
2. GonsiBency Concept :
t stateo that accouting piniples and methocto shod
Memi'n coNA is tent from ene yea to awother. It helps
tham to compone te prlit and lon different peaiods
and drauw meaniud conclutiens.
3. Accural Concept
Rs per tis cencept evene is ueconded oen sales
made aud His fmmateual uthether cash are
erneieweed
ad same applies to expnses also, t povicee nobe net
ppropiate inyomaten aloout bus iness ehtkerpuise
cOrmpaned to cash basis.
4. Qusines Sutty Concegt ? ore treated as
As per this Concept, lbusines Oqanisatiena
Seerole entitics and Gusnes ana pereTs cue cepte enhte
s. Dualopect Conoept : double entysatem o book keepin
It is the loasis Rs the acont
secoded in
Hhat means al buoimess trensachs
hane two aspecs delsit oud eredit: The valuea ben
ít equal to benegit given.
6. Honey Heasurement Comcept i tuose transactiers ae
conventin eny
s per acco wntiny in nometary terb
recOrded tich cau lae expreted
t.* Cost Concept er is toical Cost Concept :
,anaset is oxdinaiy secobdledat the
Aper tis cen cept or incwsed to aquine it.
pice actallypaid
Concept :
8.Accounting Peniodpeío tine, at tte end
dis t inkerv
An accounting stetements
stetemens aee Prepaied to ouscera
ich Linancial
tef'nancial acounting
e performance oof lousines. The
tu fineneial to be a puiod o la nont
considereo
iod fs nornally Hanch 31.)
(inaniad year Aoril 15t_
9. Hatching Coneept:
He
the ues esened duiny n accounting pud
Haching
wita t cort asociated wrta tue peiool to aocertedn tu
thet peiod
lbusiness concam duning
accurate heout e lousi ness con Cern
ts called mateli'ng'cmept
Io. Revenue AagRecognon otoh lealigahim Coneept:
ts per tis concept, Revenue slould loe accaunted fon only
cohen it is actually sealised 8a t has laecome certain Hual
enue sill Ge aealined.
11.0jechity Coegt: trans achina
This phincple oy accountiy specite that t
Should be recorded in ai dojective manen anol slould be
nbiased i atuse.
AccoUNTLNOn
It may be
cONVENTIONS
prache ohidetned as acustom ot generally
is adopteol either aceephee
Cemmen censent comong accDuntanlby'general agreemant oa
4. Con vn thon ot full
-Diselosure :
Accouning glatement shoutol discl ose tully anol completel
al the si_nitcout ingormatien, baaed on
be taken ay vaieu' uoich, deccienca
inteusteol poshies.
a. Gnvention ej Hatonialiy ?
reqinea tue disclocure ote siguifiant inyomahien)
exclusien od oich wwslel
utel inuence the olecisi.Unimport
ant injornkion camlbe mevgecd ith sther tene.
3. Comvenigm e Censervatism Clyuclonce) :
The enene et is pincple is canticipate no proit
and paoide or all poni ble loMMes. This means that all
psuspective lones ne taken into consioderatien.