Accounts Basics......
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ACCOUNTS BASICSACCOUNTS BASICS
BY-ANNAPURNA GUPTA
ACCOUNTINGACCOUNTING
It is an art of recording, classifying, It is an art of recording, classifying, summarizing and analyzing in a significant summarizing and analyzing in a significant manner in terms of money.manner in terms of money.
We can classified the term accounting in We can classified the term accounting in two parts-two parts-
Management AccountingManagement Accounting
Financial AccountingFinancial Accounting
Managerial AccountingIn management there is a spesific need of accounting.The use of accounting in management is given below-•In business planning •In taking financial decisions•In budgeting•In cost pricing of product
Financial Accounting
It is a pure form of accounting. This kind of accounting mostly used in banks, retails, common users also used this accounting.
Users of accounting-•Proprietors
•Managers
•Creditors
•Employers
•Investors
•Citizens
•Government
TYPES OF ACCOUNTSTYPES OF ACCOUNTS
Personal accountsPersonal accounts
Debit-receiverDebit-receiver
Credit-the giverCredit-the giver
Real accountsReal accounts
Debit-what comes inDebit-what comes in
Credit-what goes outCredit-what goes out
Nominal accountsNominal accounts
Debit-all expenses and lossesDebit-all expenses and losses
Credit-all income and gainsCredit-all income and gains
An assets is anything a person or a company actually owns and that have some kind of future value.
There is two types of assets-
• Current assets
• Fixed assets-
We can classified fixed assets in two parts-
1.Tangible assets
2.Intangible assets
Liabilities-
Anything which we have to pay in coming future is known as liabilities.Types of liabilities-Current liabilitiesLong term liabilities
ACCOUNTING EQUATIONACCOUNTING EQUATION
It signifies that the assets of the business It signifies that the assets of the business are always equal to the liabilities.are always equal to the liabilities.
ASSETS = LIABILITIES+CAPITAL
JOURNALJOURNAL
We can say journal asWe can say journal as
“ “a book of original entry.”a book of original entry.”
In journal transactions are recorded first of In journal transactions are recorded first of all as when they take place. In journal all as when they take place. In journal entries take place in chronological order.entries take place in chronological order.