What is Accounting ?
At the end of every financial year business man want to know their profit or loss earn during the year .what capital is invested in the business and what are the assets and liabilities of the business.In order to attain such important information it is very important to keep complete and systematic record of each and every transaction entered into the business.
Importance of Accounting is increasing day by day therefore recording and keeping record is mandatory for firms.It gives answers to so many questions such as Is such cost reasonable or not?
can it be reduced ?
Accounting is the art of recording, classifying and summarizing in a significant manner in terms of money, transactions and events which are , in part at least, of a financial character and interpreting the results there of”
According to ” American Institute of Certified Public Accounts ”
Accounting is science of recording and classifying business transaction and events primarily of a financial characters and the arts of making significant summaries analysis and interpretation of those transactions and events and communication the results to person who make decisions or forms judgement.
Characteristic of Accounting
1) Accounting is an art as well as science
2) Recording of financial transaction only
3) Recording in terms of money
What are Fundamental Principal of Accounting ?
- Cost principal
- Matching Principal
- Full disclosure principal
- Materiality principal
- Going concern principal
- Economic entity principal
also see : accounting Cycle
This post first appeared on Coaching Tally Accounts & Finance ,taxation,bankin, please read the originial post: here