Basic Accounting for XI/XII class students

 Basic Accounting for XI/XII class students

Hello Friends today we are going to discuss about the basic accounts for the commerce students and for the persons keen to learn about the accounting subject.

What is Accounting ?

Accounting is a systematic recording, reporting and analysis of financial transactions of a business. It is a language of business; which is used to convey financial information about the business enterprises to various stakeholders.

What is Accounting period?

Accounting period refers to the length of time covered by a financial statements. the length of time can be a quarter covering three months, a calander year or as a fiscal year covering 12 months.

What is Accounting Principles ?

Accounting Principles are broad rules adopted by the accounting professional as guidelines for use in recording and reporting of affaires and activities of a business to interested parties. These are further classified as: - 

-Accounting Concept: - Used while recording transactions,

-Accounting Conventions: - used while reporting and presentation of financial statements.

Accounting Conceptes and conventions: - 

Accounting Concepts: -

-Dual Accounting concept

-Seperate Entity Concept

-Cost concept

-Money Measurement Concept

-Matching Concept

-Revenue Recognition Concept,

-Going Concern Concept

-Period Concept

Accounting Conventions: -

-Convention of full disclosure

-Convention of full Consistency

-Convention of full Conservatism

-Convention of full Materiality

Accrual Concept of Accounting: -

The Accrual concept of accounting takes into account recognition of revenue and costs as they are become due. the principle of conservatism ensures that the books reflects true numbers and are not inflated.

Cash Concept: - 

-Also known as cash basis accounting , cash receipts and disbursement methods of accounting.

-In cash Accounting, Revenue and expenses are recognised  as when they are received or paid.