ACCOUNTS BASICSACCOUNTS BASICS

BY-ANNAPURNA GUPTA

ACCOUNTINGACCOUNTING

It is an art of recording, classifying, It is an art of recording, classifying, summarizing and analyzing in a significant summarizing and analyzing in a significant manner in terms of money.manner in terms of money.

We can classified the term accounting in We can classified the term accounting in two parts-two parts-

Management AccountingManagement Accounting

Financial AccountingFinancial Accounting

Managerial AccountingIn management there is a spesific need of accounting.The use of accounting in management is given below-•In business planning •In taking financial decisions•In budgeting•In cost pricing of product

Financial Accounting

It is a pure form of accounting. This kind of accounting mostly used in banks, retails, common users also used this accounting.

Users of accounting-•Proprietors

•Managers

•Creditors

•Employers

•Investors

•Citizens

•Government

TYPES OF ACCOUNTSTYPES OF ACCOUNTS

Personal accountsPersonal accounts

Debit-receiverDebit-receiver

Credit-the giverCredit-the giver

Real accountsReal accounts

Debit-what comes inDebit-what comes in

Credit-what goes outCredit-what goes out

Nominal accountsNominal accounts

Debit-all expenses and lossesDebit-all expenses and losses

Credit-all income and gainsCredit-all income and gains

An assets is anything a person or a company actually owns and that have some kind of future value.

There is two types of assets-

• Current assets

• Fixed assets-

We can classified fixed assets in two parts-

1.Tangible assets

2.Intangible assets

Liabilities-

Anything which we have to pay in coming future is known as liabilities.Types of liabilities-Current liabilitiesLong term liabilities

ACCOUNTING EQUATIONACCOUNTING EQUATION

It signifies that the assets of the business It signifies that the assets of the business are always equal to the liabilities.are always equal to the liabilities.

ASSETS = LIABILITIES+CAPITAL

JOURNALJOURNAL

We can say journal asWe can say journal as

“ “a book of original entry.”a book of original entry.”

In journal transactions are recorded first of In journal transactions are recorded first of all as when they take place. In journal all as when they take place. In journal entries take place in chronological order.entries take place in chronological order.