SIMPLE AND EASY TO UNDERSTAND ACCOUNTANCY CHAPTER 1 NOTES BY ARJUN
INTRODUCTION TO ACCOUNTING
Every Person Who is Doing Business Wants To Know How Much Profit Or Loss He Has Made During The
Year.
That's Why Accounting is Created.
Definition of Accounting
Accounting is an art of Recording , summarizing and measuring economic data.
Meaning Of Accounting
Accounting is the process of identifying, measuring, collecting, recording, classifying, summarising financial
information to the user.
FUNCTIONS OF ACCOUNTNG
The main functions of accounting:
1. Measurement
2. Forecasting
1. Measurement: The main function of accounting is to keep systematic record of transactions, post them
in the ledger and ultimately prepare the final accounts.
2. Forecasting: With the help of the various tools of accounting, future performance and financial position
of the business enterprises can be forecasted.
1) Record Keeping
The basic role of any accounting section of an organization is to keep a systematic record of all the
financial transactions.
2) Analysis of the financial status of affairs
The accounting also has an objective of ascertaining the status of financial affairs of the
organization. This will include debts, liabilities, property, and assets.
SYSTEM OF RECORDING
(a) Single entry system : This system ignores the two fold aspect of each transaction as
done in double entry system. In this only cash and personal accounts are maintained.
(b) Double entry system : This is that system of book–keeping under which every business
INTRODUCTION TO ACCOUNTING
Every Person Who is Doing Business Wants To Know How Much Profit Or Loss He Has Made During The
Year.
That's Why Accounting is Created.
Definition of Accounting
Accounting is an art of Recording , summarizing and measuring economic data.
Meaning Of Accounting
Accounting is the process of identifying, measuring, collecting, recording, classifying, summarising financial
information to the user.
FUNCTIONS OF ACCOUNTNG
The main functions of accounting:
1. Measurement
2. Forecasting
1. Measurement: The main function of accounting is to keep systematic record of transactions, post them
in the ledger and ultimately prepare the final accounts.
2. Forecasting: With the help of the various tools of accounting, future performance and financial position
of the business enterprises can be forecasted.
1) Record Keeping
The basic role of any accounting section of an organization is to keep a systematic record of all the
financial transactions.
2) Analysis of the financial status of affairs
The accounting also has an objective of ascertaining the status of financial affairs of the
organization. This will include debts, liabilities, property, and assets.
SYSTEM OF RECORDING
(a) Single entry system : This system ignores the two fold aspect of each transaction as
done in double entry system. In this only cash and personal accounts are maintained.
(b) Double entry system : This is that system of book–keeping under which every business
