Accounts

Branches of Accounting: Accounting has universal application for recording transactions and events and presenting suitable information to aid decision-making regarding any type of economic activity ranging from a family function to…

Classification of Errors or Types of Errors: Every concern is interested in ascertaining its true profit and financial position at the close of the trading year. But inspite of the best efforts of the book-keeper and the accountant certain…

Functions of Accounting: There are certain users of accounts. Earlier it was viewed that accounting is meant for the proprietor or owner of the business, but changing social relationships diluted the earlier thinking. It is now believed…

Journal: A journal is often referred to as Book of Prime Entry or the book of original entry. In this book transactions are recorded in their chronological order. The process of recording transaction in a journal is called as…

Definition of Accounting: Accounting is used by business entities for keeping records of their monetary or financial transactions. A businessman who has invested money in his business would like to know whether his business is making a…

Limitations of Accounting, What are the Limitations of Accounting: Accounting is not fully exact: Accounting is influenced by the personal judgment in respect of various terms.People are bound to have different ideas and the estimates…

Accounting Cycle: When complete sequence of accounting procedure is done which happens frequently and repeated in same directions during an accounting period, the same is called an accounting cycle. Accounting cycle starts from…

Fundamentals of Accounting: Every individual performs some kind of economic activity. A salaried person gets salary and spends to buy provisions and clothing, for children’s education, construction of house, etc. A sports club formed by a…

Systems of Accounting, Basis of accounting (Cash Basis & Accrual Basis). Difference between Accrual Basis of Accounting and Cash Basis of Accounting. Cash Basis of accounting: Cash Basis of Accounting is a method of…

The loss suffered by a company on the sale of fixed assets, The loss suffered by the business in the ordinary course of business is called revenue loss. Capital and Revenue Losses: Revenue losses are the losses which arise during the…

Suspense Account: When a trial balance does not agree, efforts are made to locate errors and rectify them. However, if reason for disagreement of trail balance cannot be found, a new account called suspense account is opened in order to…

Trial Balance methods: A trial balance is a schedule or list of debit and credit balances extracted from various accounts in the ledger including cash and bank balances from cash book. Since every transaction has a dual effect i.e. every…