{"id":1643,"date":"2019-06-30T16:10:31","date_gmt":"2019-06-30T16:10:31","guid":{"rendered":"https:\/\/commerceiets.com\/?p=1643"},"modified":"2019-06-30T16:10:31","modified_gmt":"2019-06-30T16:10:31","slug":"nature-of-accounting","status":"publish","type":"post","link":"https:\/\/commerceiets.com\/nature-of-accounting\/","title":{"rendered":"NATURE OF ACCOUNTING"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_63 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/commerceiets.com\/nature-of-accounting\/#NATURE_OF_ACCOUNTING\" title=\"NATURE OF ACCOUNTING \">NATURE OF ACCOUNTING <\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/commerceiets.com\/nature-of-accounting\/#QUALITATIVE_ATTRIBUTES_OF_ACCOUNTING\" title=\"QUALITATIVE\nATTRIBUTES OF ACCOUNTING\">QUALITATIVE\nATTRIBUTES OF ACCOUNTING<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/commerceiets.com\/nature-of-accounting\/#RELIABILITY\" title=\"RELIABILITY\">RELIABILITY<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/commerceiets.com\/nature-of-accounting\/#_RELEVANCE\" title=\"&nbsp;RELEVANCE\">&nbsp;RELEVANCE<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/commerceiets.com\/nature-of-accounting\/#UNDERSTANDABILITY\" title=\"UNDERSTANDABILITY\">UNDERSTANDABILITY<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/commerceiets.com\/nature-of-accounting\/#COMPARABILITY\" title=\"COMPARABILITY\">COMPARABILITY<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/commerceiets.com\/nature-of-accounting\/#FAITHFUL_REPRESENTATION\" title=\"FAITHFUL\nREPRESENTATION\">FAITHFUL\nREPRESENTATION<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/commerceiets.com\/nature-of-accounting\/#QUANTITATIVE_ATTRIBUTES_OF_ACCOUNTING\" title=\"QUANTITATIVE\nATTRIBUTES OF ACCOUNTING\">QUANTITATIVE\nATTRIBUTES OF ACCOUNTING<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/commerceiets.com\/nature-of-accounting\/#ACCOUNTING_IS_AN_ART_AS_WELL_AS_SCIENCE\" title=\"ACCOUNTING IS AN ART AS WELL AS SCIENCE\">ACCOUNTING IS AN ART AS WELL AS SCIENCE<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/commerceiets.com\/nature-of-accounting\/#RECORDING_OF_FINANCIAL_TRANSACTIONS_ONLY\" title=\"RECORDING OF FINANCIAL TRANSACTIONS ONLY\">RECORDING OF FINANCIAL TRANSACTIONS ONLY<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/commerceiets.com\/nature-of-accounting\/#RECORDING_IN_TERMS_OF_MONEY\" title=\"RECORDING IN TERMS OF MONEY\">RECORDING IN TERMS OF MONEY<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/commerceiets.com\/nature-of-accounting\/#CLASSIFYING_THE_TRANSACTIONS\" title=\"CLASSIFYING THE TRANSACTIONS\">CLASSIFYING THE TRANSACTIONS<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/commerceiets.com\/nature-of-accounting\/#SUMMARISING_THE_TRANSACTIONS\" title=\"SUMMARISING THE TRANSACTIONS\">SUMMARISING THE TRANSACTIONS<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/commerceiets.com\/nature-of-accounting\/#ANALYSING\" title=\"ANALYSING\">ANALYSING<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/commerceiets.com\/nature-of-accounting\/#INTERPRETATION_OF_RESULTS\" title=\"INTERPRETATION OF RESULTS\">INTERPRETATION OF RESULTS<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/commerceiets.com\/nature-of-accounting\/#COMMUNICATING_THE_RESULTS\" title=\"COMMUNICATING THE RESULTS\">COMMUNICATING THE RESULTS<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"NATURE_OF_ACCOUNTING\"><\/span>NATURE OF ACCOUNTING <span class=\"ez-toc-section-end\"><\/span><\/h1>\n\n\n\n<p class=\"has-medium-font-size\"><a href=\"https:\/\/commerceiets.com\/accounting\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Accounting (opens in a new tab)\">Accounting<\/a> is art of recording, classifying, summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of financial character and interpreting the results thereof.  The Nature of Accounting can be defined in two ways:<\/p>\n\n\n\n<ul><li>Quantitative Attributes of Accounting<\/li><li>Qualitative Attributes of Accounting&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"QUALITATIVE_ATTRIBUTES_OF_ACCOUNTING\"><\/span>QUALITATIVE\nATTRIBUTES OF ACCOUNTING<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"has-medium-font-size\">The fundamental\nnature of financial statements is to provide true and fair view of the state of\naffairs and profit or loss for the period. Qualitative attributes simplifies\nand expands on the financial figures to ensure easy understanding and\ncomparability of results. The Qualitative Attributes that describe the Nature\nof Accounting are as follows:<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"RELIABILITY\"><\/span>RELIABILITY<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Reliability implies\nthat the information must be factual and verifiable. The accounting information\nhas said to have verifiability if such information can be verified from source\ndocuments such as cash memos, purchase invoices, sales invoices,\ncorrespondence, agreement, property deeds and other similar documents. <\/p>\n\n\n\n<p class=\"has-medium-font-size\">In order to be relied\nupon, the financial information requires the following attributes:<\/p>\n\n\n\n<ul><li>Neutrality<\/li><li>Substance over form i.e. accounting\nshould be based on financial reality and not merely on legal form.<\/li><li>Prudence<\/li><li>Completeness<\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"_RELEVANCE\"><\/span>&nbsp;RELEVANCE<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Accounting information depicted by financial statements must be relevant to the objectives of enterprise. Unnecessary and irrelevant information should not be included in financial statements. The <strong>INTERNATIONAL ACCOUNTING STANDADRDS BOARD (IASB) <\/strong>says that information is relevant \u201cWhen it influences the economic decisions of users by helping them evaluate past, present or future events or confirming or correcting their past evaluations.\u201d<\/p>\n\n\n\n<p class=\"has-medium-font-size\">The relevance of\ninformation is affected by its nature and materiality. If an item or event is\nmaterial, it is probably relevant to the users of financial statements.<\/p>\n\n\n\n<p class=\"has-medium-font-size\">For Example: The\ninformation regarding the rate of dividend paid by a company in previous years\nis relevant information for the investors since it provides a basis for\nforecasting future dividends.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"UNDERSTANDABILITY\"><\/span>UNDERSTANDABILITY<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Accounting\ninformation should be presented in such a simple and logical manner that they\nare understood easily by their users such as investors, lenders, employees etc.\nA person who does not have any knowledge of accounting terminology should also\nbe able to understand them without much difficulty.<\/p>\n\n\n\n<p class=\"has-medium-font-size\">This can be done by\ngiving relevant explanatory notes to explain the information given in financial\nstatements. General topics which can be included in the explanatory notes are\nMethod of depreciation, method of valuation of inventory, description of\ncontingent liabilities, explanation of reserves, disclosure of events occurring\nafter balance sheet date etc, These explanatory notes make the financial\nstatements more useful and understandable.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"COMPARABILITY\"><\/span>COMPARABILITY<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Comparability is very\nuseful quality of the accounting. The financial statements should contain the\nfigures of previous year along with the figures of current year so that the\ncurrent performance can be compared with the past performance. Similarly, the\nfinancial statements should be prepared in such a way that the profitability\nand financial position of the concern may be compared with the other concerns\nof the similar type.<\/p>\n\n\n\n<p class=\"has-medium-font-size\">Comparison reveals\nthe strong and weak points of the business entity. Comparison is possible when\nthe different firms in the same industry adopt the same accounting principles\nfrom year to year.<\/p>\n\n\n\n<p class=\"has-medium-font-size\">For Example: If\ndiminishing balance method of charging depreciation is selected, it should not\nbe changed from year to year. Similarly, the method of valuation of stock\nshould also be consistently the same from year to year.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FAITHFUL_REPRESENTATION\"><\/span>FAITHFUL\nREPRESENTATION<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Accounting aims at\npreparing those financial statements that depict the true and fair view of\nprofitability, liquidity and solvency position of an enterprise. Application of\nappropriate Accounting Standards normally results in financial statements\nportraying true and fair view of information of an enterprise.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"QUANTITATIVE_ATTRIBUTES_OF_ACCOUNTING\"><\/span>QUANTITATIVE\nATTRIBUTES OF ACCOUNTING<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"has-medium-font-size\">The Quantitative\nattributes explaining Nature of Accounting are as follows:<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"ACCOUNTING_IS_AN_ART_AS_WELL_AS_SCIENCE\"><\/span>ACCOUNTING IS AN ART AS WELL AS SCIENCE<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Accounting\nis an Art of recording, classifying, summarizing, analyzing and interpreting\nthe accounting records with a view to ascertain the net profit\/ loss and\nfinancial position of the business.<\/p>\n\n\n\n<p class=\"has-medium-font-size\">Accounting\nas a Science is an organized body of knowledge that contains some underlying\nprinciples and rules that are followed while maintaining accounts. However,\nAccounting is not a pure science as it does not establish cause and effect\nrelationship.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"RECORDING_OF_FINANCIAL_TRANSACTIONS_ONLY\"><\/span>RECORDING OF FINANCIAL TRANSACTIONS ONLY<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Accounting\nrecords only those transactions and events that are expressed in monetary terms\nor in quantitative form. For instance, the transactions like sale of goods for \u20b95,000\nwill be recorded in the books of accounts.<\/p>\n\n\n\n<p class=\"has-medium-font-size\">However, there are so many events which\nare very important for business but cannot be recorded in the books of accounts\nbecause such events cannot be expressed in quantitative or monetary form. For\nexample: Loyalty of Employees, Resignation by an able and experienced manager,\nStrike by employees, Quarrel between employee and employer etc. but these\nevents have a large impact and direct bearing on the business of the firm.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"RECORDING_IN_TERMS_OF_MONEY\"><\/span>RECORDING IN TERMS OF MONEY<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">The accounting records only those\ntransactions which can be expressed in terms of money only. It implies that a\nbusiness man will not record the purchase of 5 chairs and 5 tables, he will\nrecord the purchase of 5 chairs costing \u20b92,500 and 5\ntables costing \u20b95,000.<\/p>\n\n\n\n<p class=\"has-medium-font-size\">Also the recording is done in the book\nof the journal which is the primary book of recording the transactions in the\nchronological order.<\/p>\n\n\n\n<p class=\"has-medium-font-size\">In small business houses, the recording\nof transactions is generally done in the book of Journal whereas in big\nbusiness houses the recording of transactions is done in the subsidiary books\nsuch as:<\/p>\n\n\n\n<ul><li>Cash Book<\/li><li>Purchase Book<\/li><li>Sales Book<\/li><li>Purchase Return Book<\/li><li>Sale Return Book<\/li><li>Bills Receivable Book<\/li><li>Bills Payable Book<\/li><li>Journal Proper<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\">The number of subsidiary books to be\nmaintained depends upon the nature and size and needs or requirements of the\nbusiness.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"CLASSIFYING_THE_TRANSACTIONS\"><\/span>CLASSIFYING THE TRANSACTIONS<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">One of the <a href=\"https:\/\/commerceiets.com\/features-of-accounting\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Features of Accounting (opens in a new tab)\">Features of Accounting<\/a> is that it classifies all the transactions recorded in the book of the Journal. Classification refers to grouping the transactions of same nature at one place, in a separate account. Classification of transactions is done in the books of \u2018Ledger\u2019. All the accounts related to creditors, debtors, capital, assets, liabilities, incomes and expenses are separately opened in the Ledger Book. Example: Wages Account, Ram Account, Advertisement Account, Cash Account, Bank Overdraft Account etc.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"SUMMARISING_THE_TRANSACTIONS\"><\/span>SUMMARISING THE TRANSACTIONS<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Summarizing is the art of presenting\nthe classified data in a manner which is understandable and useful to\nmanagement and other users of such data. It involves:<\/p>\n\n\n\n<ul><li>Balancing of Ledger Accounts<\/li><li>Preparation of Trial Balance<\/li><li>Preparation of Trading and Profit &amp;\nLoss A\/c<\/li><li>Preparation of Balance Sheet<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\">Trial Balance is a summary of all the\nledger accounts and is maintained to check the arithmetical accuracy of\naccounts. Trading Account is prepared to find out the Gross Profit or Gross\nLoss while Profit &amp; Loss Account helps in knowing Net Profit or Net Loss.\nBalance Sheet prepared at the end of accounting year helps in knowing the\nfinancial position of the concern. It shows the Profitability, Solvency as well\nas Liquidity position of the business.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"ANALYSING\"><\/span>ANALYSING<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Analyzing is concerned with the\nestablishment of relationship between the various items or groups of items\ntaken from Income Statement or Balance Sheet or both. Purpose of analysis is to\nidentify he financial strengths and weaknesses of the enterprise. It provides\nthe base for analysis.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"INTERPRETATION_OF_RESULTS\"><\/span>INTERPRETATION OF RESULTS<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Another feature of accounting is\ninterpretation of results. Interpretation of results is concerned with\nexplaining the meaning and significance of the relationship so established by\nthe analysis. Interpretation of results requires high degree of knowledge and\nskills. The accountant should answer:<\/p>\n\n\n\n<ul><li>What has happened?<\/li><li>Why is happened?<\/li><li>What is likely to happen under\nspecified conditions?&nbsp; <\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"COMMUNICATING_THE_RESULTS\"><\/span>COMMUNICATING THE RESULTS<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Accounting is so featured that it will provide the analyzed and interpreted results to its users such as Management, Employees, Creditors, Research Scholars, Debtors, Financial Institutions, Competitors, Bankers, Income Tax Authorities etc. The results are communicated by preparing final accounts, ratios, graphs, diagrams, charts, fund flow statement, cash flow statement etc. <\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/accounting\/\"><strong>Accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/non-profit-organisation\/\"><strong>Non profit organisation<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/depreciation\/\"><strong>Depreciation<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/liquidity-ratios-types\/\"><strong>Liquidity ratios<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/nature-of-accounting\/\"><strong>Nature of Accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/receipt-and-payment-account-pdf\/\"><strong>Receipts and Payments Account<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/depreciation-accounting\/\"><strong>Depreciation Accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/acid-test-ratio-formula\/\"><strong>Acid Test Ratio<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/benefits-of-accounting\/\"><strong>Benefits of Accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/scope-of-accounting\/\"><strong>Scope of accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/hire-purchase-accounting-notes-pdf\/\"><strong>Hire Purchase Accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/cash-ratio\/\"><strong>Cash Ratio<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/difference-between-cost-accounting-and-financial-accounting\/\"><strong>Difference between cost accounting and financial accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-financial-accounting-management-accounting-and-cost-accounting\/\"><strong>Financial accounting, cost accounting and management accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-hire-purchase-and-instalment\/\"><strong>Difference between hire purchase and instalment system<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/financial-ratio-analysis\/\"><strong>Financial ratio analysis<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/difference-between-transaction-and-event\/\"><strong>Difference between transaction and event<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/transactions\/\"><strong>Transactions<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/users-of-accounting\/\"><strong>Users of Accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/current-ratio-formula\/\"><strong>Ratio analysis<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/limitations-of-accounting-2\/\"><strong>Limitation of Accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/capital-expenditure\/\"><strong>Capital Expenditure<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/instalment-system\/\"><strong>Instalment System<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-consignment-and-sale\/\"><strong>Difference between consignment and sale<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/book-keeping\/\"><strong>Book Keeping<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/revenue-expenditure\/\"><strong>Revenue Expenditure<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/reserves-accounting\/\"><strong>Reserves Accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-normal-and-abnormal-loss\/\"><strong>Abnormal loss vs normal loss in consignment<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/accountancy\/\"><strong>Accountancy<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-capital-expenditure-and-revenue-expenditure\/\"><strong>Difference between capital and revenue expenditure<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/reserves-accounting\/\"><strong>Provisions&nbsp;<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/treatment-of-loss-on-consignment\/\"><strong>Treatment of loss on consignment<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/accounting-is-an-art-or-science\/\"><strong>Accounting as science or an art<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/accounting-equation\/\"><strong>Accounting Equation<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/single-entry-system-in-accounting\/\"><strong>Single entry system<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/accounting-treatment-of-consignment\/\"><strong>Accounting treatment of consignment<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/accounting-is-an-art-or-science\/\"><strong>Book Keeping vs accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/deferred-revenue-expenditure\/\"><strong>Deferred Revenue Expenditure<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/statement-of-affairs-and-balance-sheet-difference\/\"><strong>Difference between statement of affairs and balance sheet<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-joint-venture-and-consignment\/\"><strong>Joint venture vs consignment<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/accounting-is-an-art-or-science\/\"><strong>Book keeping vs accountancy<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/capital-receipt\/\"><strong>Capital receipt<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/ifrs\/\"><strong>IFRS<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/departmental-accounting\/\"><strong>Departmental Accounting<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/accounting-is-an-art-or-science\/\"><strong>Accounting vs accountancy<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/revenue-receipt\/\"><strong>Revenue receipt<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/balance-sheet\/\"><strong>Balance Sheet<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/methods-of-departmental-accounting\/\"><strong>Methods of departmental accounting<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/basis-of-accounting\/\"><strong>Basis of Accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-capital-and-revenue-receipt\/\"><strong>Difference between capital and revenue receipt<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/profit-and-loss-account\/\"><strong>Profit and loss Account<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/allocation-of-expenses-in-departmental-accounting\/\"><strong>Allocation of expenses in departmental accounting<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/branches-of-accounting\/\"><strong>Branches of accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-accounting-concepts-and-conventions\/\"><strong>Difference between accounting concepts and conventions<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/trading-account\/\"><strong>Trading Account<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/inter-departmental-transfers\/\"><strong>Inter-departmental transfers<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/cash-and-mercantile-system-of-accounting\/\"><strong>Cash and mercantile system of accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/accounting-standards\/\"><strong>Accounting Standards<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/voyage-account\/\"><strong>Voyage Account<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/different-types-of-branches\/\"><strong>Different types of branches<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/accounting-principles\/\"><strong>Accounting Principles<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/objectives-of-accounting\/\"><strong>Objectives of Accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/accounting-for-incomplete-voyage\/\"><strong>Accounting for Incomplete Voyage<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-departmental-and-branch-accounting\/\"><strong>Departmental vs Branch accounting<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/golden-rules-of-accounting\/\"><strong>Golden ru\nles of accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/process-of-accounting\/\"><strong>Process of Accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/joint-venture\/\"><strong>Joint venture<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/methods-of-branch-accounting\/\"><strong>Methods of branch accounting<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/double-entry-system-of-accounting\/\"><strong>Double entry system of book keeping<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/scope-of-accounting\/\"><strong>Scope of Accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-joint-venture-and-partnership\/\"><strong>Joint Venture Vs Partnership<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/incorporation-of-branch-trial-balance\/\"><strong>Incorporation of branch trial balance<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/difference-between-double-single-entry-system\/\"><strong>Double entry vs Single entry system<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-accounting-concepts-and-conventions\/\"><strong>Accounting Concepts vs Accounting conventions<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/methods-of-recording-transactions-in-joint-venture\/\"><strong>Methods of recording transactions in Joint Venture<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/garner-vs-murray-rule\/\"><strong>Garner VS Murray Rule<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/history-of-accounting-pdf\/\"><strong>History of Accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-provisions-and-reserves\/\"><strong>Difference between provisions and reserves<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/consignment\/\"><strong>Consignment<\/strong><\/a><\/td><td><\/td><\/tr><tr><td><\/td><td><\/td><td><\/td><td><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link\" href=\"https:\/\/www.linkedin.com\/in\/kajal-mahajan-7549b2197\/\" target=\"_blank\" rel=\"noreferrer noopener\">CONNECT ON LINKEDIN<\/a><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>NATURE OF ACCOUNTING Accounting is art of recording, classifying, summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of financial character and interpreting the results thereof. The Nature of Accounting can be defined in two ways: Quantitative Attributes of Accounting Qualitative Attributes of Accounting&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; QUALITATIVE&#8230;<\/p>\n<p class=\"more-link-wrap\"><a href=\"https:\/\/commerceiets.com\/nature-of-accounting\/\" class=\"more-link\">Read More<span class=\"screen-reader-text\"> &ldquo;NATURE OF ACCOUNTING&rdquo;<\/span> &raquo;<\/a><\/p>\n","protected":false},"author":2,"featured_media":1644,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,11],"tags":[53,57],"_links":{"self":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/1643"}],"collection":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/comments?post=1643"}],"version-history":[{"count":0,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/1643\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media\/1644"}],"wp:attachment":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media?parent=1643"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/categories?post=1643"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/tags?post=1643"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}