What is accounting??? Accounting is an Art of Recording, classifying, summarizing, interpreting and reporting the business transactions in a specific manner.

Recording: anything that we do for company or business should be records by computerizes or manual is called recording in accounting. Classifying: type wise grouping of business transactions. Summarizing: it summarizes the whole data that record and classified. Interpreting: After getting the all data or fact and figures we clearly get the result Reporting: is called financial statements that we see the whole result mean loss and profit. Q:1 What is accounting??? Accounting is an Art of Recording, classifying, summarizing, interpreting and reporting the business transactions in a specific manner. Or its also called Language of business. Q:2 Who must require Company or Business reports??? Company or Business sent their reports mostly to shareholders or investors, landers, Government for tax purpose. Introduction of Accounting Q:1 What is Transaction??? Transaction is an event that can be count in monetary terms (money) is called transaction. Event that cant be counted in monetary terms is not a transaction. Q:2 What are uses of Accounting??? 1.It used to record business transaction in a specific manner.

2. Its used to calculate profit or loss of a company of business. 3. To Facilitate management control. 4. To gauge (measure) worth of the company. 5. To assess (find out ) taxable income of the company. Q:3 What are the functions of Accounting??? 1. 2. 3. 4. 5. Recording of Transaction Classifying of Transaction into types Summarized Interpreting and ultimate usage of transactions Reporting

System/ Basis of Accountings 1. Cash Basis 2. Accrual Basis

1. Cash Basis: Payment in shape of Cash, credit card, online, any type of money transfer from one to another includes or exclude is called Cash Basis Accounting. 2. Accrual Basis: Accrual means gather ( (it means that you have purchased a equipment thats cost is 20 laces and you have paid only 5 laces and 15 laces or remaining it means that now that payment you should have to paid its on you. In this case cash is not increasing and decreasing then its not a transaction it will not be recorded. Double Entry Basis (General Concept) 1. Sources 2. Resources

Sources: it means that assets of the company that make some revenue for Business Resources: where from these sources come? From Capital or Liabilities. Whenever an asset sold it makes an entry into Sources and resources.

Some Terms in Accounting Manager: Company or Business Runner Investor/Share holder: Investment of the person in that company or business Landers: Person/people that give loan for running company or business

Government: Claim tax from profit of company or business. Monetary Terms: Shape of Money, Cash, Cheque etc. Assets: Assets. Capital: Liabilities: Material or Equipment thats purpose for sold and make some revenue is called Funds provided by business owner or investment of owner is called Capital. Funds provided by non-owner it means loan or shareholders.

Accounting Equation: it means Sources (Assets) = Resources (Capital and Liabilities). Whenever an asset sold it will entry into Sources and Resources thats called Double Entry system and Accounting Equation. Total Equities: means Capital + Liabilities or Resources.