The document defines accounting as the process of recording, classifying, summarizing, and interpreting financial transactions and events in terms of money. It involves recording transactions, classifying them, summarizing, interpreting results, and communicating findings. Accounting provides information to assess a business's financial position and allow for rational decision making.

2. According to American Institute of certified
public Accountants, “Accounting is the art of
recording, classifying and summarising in a
significant manner in terms of money
transaction and events which are in part
atleast, of a financial character and
interpreting the results thereof.”

3.  Recording the transactions
 Classifying the transactions
 Summarising the transactions
 Interpreting the transactions
 Communication of results

4.  Capital
 Drawings
 Goods
 Purchases
 Purchase Returns
 Cash Purchases
 Credit Purchases
 Sales
 Credit Sales

5.  Debtor
 Trade Debtor
 Loan Debtor
 Debt
 Good Debt
 Bad Debt
 Doubtful Debt
 Assets
 Tangible Assets
 Intangible Assets
 Fixed Assets

6.  Current Assets or Floating Assets
 Monetary Assets or Liquid Assets
 Non-Monetary Assets
 Fictitious Assets
 Wasting Assets
 Investments
 Goodwill
 Depreciation
 Liabilities
 Fixed or Long-term liabilities

7.  Current or Short-term Liabilities
 Liquidity to Owners
 Creditors for Expenses
 Accounting period
 Stock
 Opening Stock
 Closing Stock
 Expense
 Expenditure
 Revenue Receipt

8.  Capital Receipts
 Profits
 Loss

9.  Systematic Recording of Transaction
 Ascertainment of results of above recorded
transactions
 Ascertainment of the financial position of the
business
 Providing information to the users for
rational decision-making
 To know the solvency position

10.  Measurement
 Forecasting
 Decision-making
 Comparison & Evaluation
 Control
 Government Regulation and Taxation

13. Basis of
Accounting
Cash Basis
Merchantile/
Accrual
basis

14. Financial
Accounting
• Profit & Loss
account
• Balance Sheet
Cost Accounting
• Design costing
system
• Cost control
• Cost
forecasting
• Standard
costing
• Budgetary
control
Management
Accounting
• Ratio Analysis
• Fund Flow
Statement
• Cash Flow
Statement
• Comparative
Statement
• Trend Analysis
• Common Size
Statement

15. Recording of transactions in
journal or subsidiary books
Posting into ledgers
Preparation of trial
balance
Preparation of Final
accounts

16.  Relevant factors cannot be measured in
terms of money
 Information relates to past date
 Ignores changes in money factors
 Accounting principles conflict with each
other
 Certain accounting estimates depend on the
personal judgement of the accountant
 Human resources not shown in the balance
sheet
 Probability of manipulations

17.  Transaction
 Debit
 Credit
 Purchase return
 Sales return
 Invoice
 Debit Note
 Credit Note
 Stock
 Work-in-progress

18.  Bills Receivable
 Bills Payable
 Outstanding expenses
 Accrued Incomes
 Prepaid expenses
 Income received in advance
 Journal
 Journal entry
 Rules for journal entry
 Subsidiary books
 Journal proper
 Account b/d, b/f, c/d, c/f

19.  Ledger accounts
 Income Statement
 Balance Sheet
 Accounting Equation
Assets = Liabilities + Total Shareholder’s
Equity