Professional Documents
Culture Documents
1. Define accounting.
Accounting is defined as an art of recording, classifying and summarizing
transactions and events in a significant manner and in terms of money. It is
called language of business because the financial performance and the
financial position of any company need to be conveyed to the stakeholders of
any business concern. This can be done by systematically preparing the
financial statements and presenting to the interested parties.
2.Write an accounting equation. What does it signify?
An accounting equation is a statement of equality between the resources
and the sources which finance the resources and is expressed as follows:
Sources of Funds = Uses of Funds
Or
Equities = Assets
Owners equity + Outsiders liability = Assets
5.Write three principle of accounting.
The Going Concern Concept: The entity will continue to operate in the future.
The Cost Principle: Assets and services acquired should be recorded at their
actual cost.
Measurement Concept: The monetary unit is the principle means for
measuring assets and equities.
.
10. What is meant by Balance Sheet?
Balance Sheet:
A Balance Sheet, also commonly referred as statement of financial
position, is a statement of assets and liabilities of business enterprises at
a particular date. The Balance Sheet summarizes and reveals the financial
position of an enterprise on a particular date, by showing what It own and
what it owes. Because the balance sheet is a snapshot of an instant in time,
it is a status report rather than flow report.
Book
Keeping
1. Is a part of accounting
Describe
The basic characteristics of the accounting model we use today sketch their
roots back over 500 years. Luca Pacioli, a Renaissance era monk, obtained a
method or a technique for tracking the success or failure of the trading
ventures. The foundation of that system continues to provide the modern
business world fine, and is the entrenched cornerstone of even the most
detailed computerized systems. The nucleus of that system is the concept that
a business completely can be described as a collection of resources and the
corresponding claims against those resources. The claims can be separated
into the claims of the creditors and the owners (i.e., liability and owners'
fairness). This results in rise to the fundamental accounting equation:
Assets = Liabilities + Owners' Equity
Assets
Assets are the economic resources of the unit, and comprise such items as
cash, accounts receivable (amounts owed to the firm by its customers),
inventories, equipment, buildings, land, and even intangible assets like patents
and other lawful rights and claims. Assets are presumed to entail possible
future economic benefits to the owner.
Liabilities
Owners' equity is the owner's "concern" in the business. It is now and then
called net assets, because it is equivalent to assets minus liabilities for a
related business.
a. Bound Ledger
Ledger
b. Loose Leaf