Class 11 Accountancy
Chapter 1 – Introduction to Accounting (Notes)
■ Meaning of Accounting:
Accounting is the process of identifying, recording, classifying, summarizing, and communicating financ
■ Objectives of Accounting:
• Record all transactions properly.
• Find out profit or loss.
• Show financial position (Assets & Liabilities).
• Provide information to users.
• Help management in decision-making.
■ Features of Accounting:
• Records only financial transactions.
• Uses money as measurement unit.
• Based on bills & receipts (evidence).
• Shows results through P&L and Balance Sheet.
■ Bookkeeping vs Accounting:
Bookkeeping → Only recording (narrow scope).
Accounting → Recording + summarizing + interpreting (wider scope).
■ Users of Accounting Information:
Internal: Owners, Management, Employees.
External: Investors, Creditors, Government, Public.
■ Advantages:
• Know profit/loss easily.
• Shows assets & liabilities clearly.
• Helpful in disputes & decisions.
■■ Limitations:
• Records only money matters.
• Ignores quality factors (skills, goodwill).
• Based on old cost (not current).
Chapter 1 – Introduction to Accounting (Notes)
■ Meaning of Accounting:
Accounting is the process of identifying, recording, classifying, summarizing, and communicating financ
■ Objectives of Accounting:
• Record all transactions properly.
• Find out profit or loss.
• Show financial position (Assets & Liabilities).
• Provide information to users.
• Help management in decision-making.
■ Features of Accounting:
• Records only financial transactions.
• Uses money as measurement unit.
• Based on bills & receipts (evidence).
• Shows results through P&L and Balance Sheet.
■ Bookkeeping vs Accounting:
Bookkeeping → Only recording (narrow scope).
Accounting → Recording + summarizing + interpreting (wider scope).
■ Users of Accounting Information:
Internal: Owners, Management, Employees.
External: Investors, Creditors, Government, Public.
■ Advantages:
• Know profit/loss easily.
• Shows assets & liabilities clearly.
• Helpful in disputes & decisions.
■■ Limitations:
• Records only money matters.
• Ignores quality factors (skills, goodwill).
• Based on old cost (not current).
