Basic Accounting Procedure is the process of recording, classifying, summarizing, and interpreting financial transactions to produce financial statements that provide insight into the financial health of an organization. The Basic Accounting Procedure refers to the systematic steps followed to manage the accounting records, ensuring that every transaction is accurately captured and reported. By following this … Read more
The Double Entry System of Accounting is a fundamental principle that underpins the accounting framework of modern businesses and organizations. It forms the core of financial accounting, ensuring accuracy, accountability, and transparency in financial reporting. This system is based on the idea that every transaction has two equal and opposite effects on the accounts, which … Read more
In accounting, the nature of accounts is categorized into assets, liabilities, equity, revenue, and expenses. Assets are resources owned by a business that provide future economic benefits, while liabilities represent obligations or debts owed to external parties. Equity reflects the owner’s residual interest after deducting liabilities from assets. Revenue accounts record income from sales or … Read more
The accounting equation is a fundamental principle in accounting that serves as the foundation for the double-entry bookkeeping system. It establishes the relationship between a company’s assets, liabilities, and equity, ensuring that the financial statements are balanced and accurately reflect the financial position of the business. The equation is expressed as: Accounting Equation Assets = … Read more
Accounting is a methodical approach to documenting, summarizing, and communicating financial transactions, aimed at delivering valuable insights for informed decision-making. This discipline encompasses the monitoring of assets, liabilities, revenues, and expenses, while ensuring precision and adherence to financial regulations. Fundamental concepts include the accounting equation (Assets = Liabilities + Equity), the practice of double-entry bookkeeping, … Read more
Financial Accounting is the branch of accounting that focuses on the recording, summarizing, and reporting of a company’s financial transactions. It involves the preparation of financial statements such as the income statement, balance sheet, and cash flow statement, which provide an overview of the company’s financial performance and position. The primary purpose of financial accounting … Read more