Accounting involves recording, classifying, and summarizing business transactions and communicating the results to interested parties. There are five main types of accounts - assets, liabilities, equity, revenue, and expenses. Accounting serves several functions, including keeping a systematic record of transactions, protecting business property, informing managers and other users, and ensuring compliance with legal requirements. It has both advantages such as providing evidence and assessing taxes, and limitations such as only recording monetary values and not accounting for inflation.

1. Introduction to Accounting

2. Account
• It is a unit of information that represents
business records.
• There are five types of accounts: Asset,
Liability, Equity, Revenue and Expense.

3. Accounting
• It is concerned with the use of which the
records are put, their analysis and
interpretation.
• It is the process of recording business
activities that make changes to accounts.
• Sales of products, Revenue from services
earned, Buying products and/or services and
so on.

4. Attributes of Accounting
• It is the art of recording business transactions.
• It is the art of classifying business
transactions.
• The transactions or events of a business must
be recorded in monetary terms.
• It is the art of summarizing financial
transactions.
• The results should be communicated to users.

5. Functions
• Systematic record of business transactions.
• Protecting the property of business.
• Communicating results to users.
• Compliance with legal requirements.

6. Users of Accounting Information
• Owners
• Creditors (Suppliers)
• Investors
• Employees
• Government
• Public
• Research Scholars / Agencies
• Managers

7. Definitions
1. Recording, classifying, summarising business
transactions and interpreting the results thereof.

8. 2. It is an information system whose purpose is to identify ,
collect, measure and communicate information about
economic units to those with an interest in the units
financial affairs. To permit judgment and decisions by
users of the information.

9. • Systematic record of business transactions.
• Protecting the property of the business.
• Communicating results to the interested parties.
• Compliance with legal requirements.
Functions of Accounting

10. • Evidence in court.
• Settlement of taxation liability.
• Comparative study.
• Sale of business.
• Assistance to various parties.
Advantages of Accounting

11. • Records only monetary transactions.
• Effect of price level changes not considered.
• Historical in nature.
• Personal bias of Accountant affects the
accounting statements.
Limitations of Accounting
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