Professional Documents
Culture Documents
ACCOUNTS
MANAGEMENT
ACCOUNTING
1. Is man made
2. Has evolved over a period of time
3. Is a systematic exercise
4. Is the language of business
5. Follow flexible approach
6. Communicates financial information for decision making
Accounting is based on following assumptions :
For accounting process ‘Balance Sheet’ and ‘Profit and Loss Account’ are two
important financial document.
Following steps are followed for preparing these documents
1. Initiation of transaction.
2. Keeping records of transaction in a chronological order.
3. Making adjustment entries.
4. Recording transactions in T-accounts or ledger.
5. Preparing initial trial balance.
6. Preparing profit and loss account and closing of T-accounts.
7. Preparing the balance sheet.
REVENUE RECOGNITION