Friday, January 27, 2012

Accounting - The Concept

 Index of concepts
  1. Aa to Az
  2. Ba to Bz
  3. Ca to Cz
  4. Da to Dz  
  5. Ea to Ez
  6. Fa to Fz
  7. Ga to Gz
  8. Ha to Hz
  9. Ia to Iz

 Concept Definition and Explanation



Accounting is the language of business.

Business firms are established to make profits. Profit is the return to the owners of business. Accounting determines the amount of profit made by a business firm in a period.


Accounting records and statements have many other uses. Accounting is defined as providing information to facilitate decision making by managers and investors.


Accounting is based on documentary evidence of a transaction involving money and  assets between a business firm and other parties. These documents are called as vouchers in accounting jargon.

Based on vouchers, accoutants first enter the trasaction in a journal. From the entries in the journal, they make posting in the ledger in separate accounts maitained for various assets, liabilities, revenues and expenses, and various parties representing customers and suppliers.


From the account balances in the ledgers, various accounting statements are prepared.


Profit and loss account, balance sheet and cash flow statement are important statements to be prepared by companies and circulated to their shareholders.

Accounting is a branch of knowledge that records transactions in a structured way and provides summary information useful for decision making. 
The accounting system of a business concern can provide information on payments it has to collect from customers, payments it has to make to suppliers, and profit made by the firm in a period etc.
Accounting in further classified into
Financial Accouting
Cost Accouting
Management Accounting








Related Knols




Research Papers


Management Knowledge Revision Knols

Knols that facilitate revision of various subjects of MBA curriculum to keep management professionals' knowledge fresh

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