Principles of Accounting

Double Entry System

Double Entry System

| August 28, 2014 | 0 Comments

Every business transaction causes at least two changes in the financial position of a business concern at the same time-hence, both the changes must be recorded in the books of account. Otherwise, the books of accounts will remain incomplete and the result ascertained therefore will be inaccurate. For example, we buy machinery for Rs. 70, […]

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The Accounting Equation

The Accounting Equation

| August 27, 2014 | 0 Comments

The three basic elements of accounting are assets, liabilities and owners’ equity (capital). The assets represent the things of value that a business owns. The liabilities are the claims of the creditors against those assets. The owners equity (capital) is the claim of the owner against those assets. Whatever us not claimed by the creditors […]

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What Is An Event And Transaction?

What Is An Event And Transaction?

| August 26, 2014 | 0 Comments

In ordinary language “Event” means anything that happens. Human life is full of events. So many events take place in the family and social life of a person. Classification of Events: The event may be classified in to two parts: (a) Monetary Events: Events which are related with money, i.e. which change the financial position of a […]

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Accounting Conventions

Accounting Conventions

| May 13, 2014 | 0 Comments

Now here on this important topic we learn that what is meant by Accounting Conventions? And what are the main kinds of Accounting Conventions? Accounting Conventions: Those customs or traditions which guide the accountant while communicating the accounting information are includes in the terms conventions. Types Of Conventions: Conservatism Convention Full Disclosure Convention Consistency Convention […]

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Realisation Concept

Realisation Concept

| May 12, 2014 | 0 Comments

Here we can learn that what is meant by Realisation Concept? And what is the importance of Realisation Concept in a business and Accounting? When good are sold or services are rendered revenue should be recognized at that time according to this concept.   The following example will help to understand this point clearly. Mr. […]

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