STUDY TO ENLIGHTEN YOURSELF
DIFFERENCE BETWEEN TRANSACTION AND EVENT Before understanding the difference between transaction and event, one must clearly understand the two concepts. TRANSACTION Transaction refers to any exchange of goods and services on cash or credit basis by the business with the outside parties i.e. other business or customer. Transaction is an economic activity. It has an…
TRANSACTIONS Transactions refer to any exchange of goods and services on cash or credit basis by the business with the outside parties i.e. other business or customer. Transaction is an economic activity. It has an effect on the net worth or financial position of the business. FEATURES OF TRANSACTION The following are the features of…
USERS OF ACCOUNTING Accounting provides the information to the users of the business. Various users are interested to know about the financial position of the business, which they get from the accounting records kept by the business and provided to them by way of publishing final accounts. The users of accounting are as follows: INTERNAL…
MEANING Balance Sheet is also known as Position Statement. It is a summary of all the assets and the liabilities of the business concern prepared at the end of the year. It is a part of final accounts. All the nominal accounts i.e. Trading Account and Profit and Loss Account are closed by transferring to…
PROFIT AND LOSS ACCOUNT Profit and Loss Account is an account prepared by the trading organizations to know about the net profit or net loss of the firm. This account records all the incomes on credit side and expenses on debit side of a particular year. This account is prepared at the end of the…
TRADING ACCOUNT Trading Account is one of the financial statements prepared by the trading firms at the end of the year. These are prepared to find out the gross profit or gross loss accruing to the firm. This account records all the amounts related to the goods purchased and sold. It helps in providing all the material…
Difference between double and single entry system Before understanding the difference between Double & Single entry System, both concepts should be understood: SINGLE ENTRY SYSTEM Single Entry System in accounting is a system in which the proprietors or the firms do not follow specific rules of double entry system to maintain accounts. It is an Incomplete Record…
Read More “DIFFERENCE BETWEEN DOUBLE AND SINGLE ENTRY SYSTEM” »
DOUBLE ENTRY SYSTEM OF ACCOUNTING Double Entry System of Accounting is a system under which each transaction is regarded to have two-fold aspects and both the aspects are recorded to obtain the complete record of dealings. It is based on the rule that debit should be equal to the credit. Luca Friar Pacioli is known…
ACCOUNTING STANDARDS Accounting standards may be defined as written statements, issued from time to time by institutions of accounting professionals, specifying uniform rules or practices for drawing the financial statements. ACCORDING TO KOHLER “Accounting standards are code of conduct imposed on accountants by custom, law or professional body.” Accounting standards mainly deal with four major…
Difference between Accounting Concepts and conventions Before understanding the Difference between Accounting Concepts and Conventions, the both concepts should be known. ACCOUNTING CONCEPTS The Accounting Concepts are the foundation of the accounting. These concepts are the assumptions which are generally accepted and followed while performing the recording of transactions and preparation of final accounts. The…
Read More “DIFFERENCE BETWEEN ACCOUNTING CONCEPTS AND CONVENTIONS” »
