Notes and Chapter Summary
Accountancy
Chapter 2 – Theory Base of Accounting
Business Transactions
An exchange of goods or services for cash or on credit by the business with outsiders is called a
transaction.
In the words of L. C. Copper, “ A person’s dealings in money or money’s worth are termed as
transactions.”
Entity:- Business entity means a specific identifiable business enterprise like Tata, Reliance,
Amul, Sony etc.
Transactions: - Exchange of goods and services for consideration.
Assets:- These are properties or economic resources of an enterprises which can be expressed in
monetary terms it can be divided in two parts
(a) Non Current Assets : Fixed assets : Tangible & Intangible ( more than 1 year period)
Tangible Assets Intangible Assets
Land and Building Goodwill
Plant and Machinery Patents
Furniture Trademarks
Office Equipments Copyright
Computer software
(b) Current assets (less than 1 year period)
Examples of Current Assets are :
• Debtors
• Bills Receivable
• Cash in hand
• Cash at bank
• Cheques in hand
• Drafts in hand
• Stock
• Prepaid Expenses
Accountancy
Chapter 2 – Theory Base of Accounting
Business Transactions
An exchange of goods or services for cash or on credit by the business with outsiders is called a
transaction.
In the words of L. C. Copper, “ A person’s dealings in money or money’s worth are termed as
transactions.”
Entity:- Business entity means a specific identifiable business enterprise like Tata, Reliance,
Amul, Sony etc.
Transactions: - Exchange of goods and services for consideration.
Assets:- These are properties or economic resources of an enterprises which can be expressed in
monetary terms it can be divided in two parts
(a) Non Current Assets : Fixed assets : Tangible & Intangible ( more than 1 year period)
Tangible Assets Intangible Assets
Land and Building Goodwill
Plant and Machinery Patents
Furniture Trademarks
Office Equipments Copyright
Computer software
(b) Current assets (less than 1 year period)
Examples of Current Assets are :
• Debtors
• Bills Receivable
• Cash in hand
• Cash at bank
• Cheques in hand
• Drafts in hand
• Stock
• Prepaid Expenses
