Basic Accounting Assignment
1- Explain the collecting, recording, classifying, summarizing, analyzing and reporting process of accounting.
- Collecting:- Data obtained from various sources with the help of appropriate measures is called collection of data.
- Recording:- Arranging the data into its chronological form is called recording of data.
- Classifying:- Division of data according to nature of events is called classification of data. - Ledger is used for classifying transactions - Posting is the process of transferring transactions from journal to ledger.
- Summarizing:- This involves presenting the classified data in a manner which is understandable and useful to the management and other interested parties. Follow statements are prepared:- - Income statement - Balance Sheet - Cash flow statement
- Analyzing:- The comparison of data in a business is called analyzing of data. For example, analyzing of present data with past data, or actual data with projected data.
- Reporting:- Forwarding the results to financial users like chairman, directors, managers etc. is called reporting of data.
2- Discuss in detail the nature of accounts i.e. assets, expenses, liabilities, revenues and capital by giving examples.
- Assets:- The resources of a business are called assets. They are of two types:- - Fixed Assets: Land, Building, Equipment, Vehicle etc. - Current Assets: Cash, cash at bank, A/c receivable, debtors, prepaid expenses.
- Expenses:- The amount spent in a business with a view to gain profit in the future is called expense. Examples are rent expenses, salaries expenses, advertisement expenses etc.
- Liabilities:- The financial responsibilities of the business for which it is liable are called liabilities. They are divided into two types:- - Fixed Liabilities (Bank Loan, Bonds Payable, Mortgage Payable.) - Current Liabilities (Notes Payable, Unearned
- Collecting:- Data obtained from various sources with the help of appropriate measures is called collection of data.
- Recording:- Arranging the data into its chronological form is called recording of data.
- Classifying:- Division of data according to nature of events is called classification of data. - Ledger is used for classifying transactions - Posting is the process of transferring transactions from journal to ledger.
- Summarizing:- This involves presenting the classified data in a manner which is understandable and useful to the management and other interested parties. Follow statements are prepared:- - Income statement - Balance Sheet - Cash flow statement
- Analyzing:- The comparison of data in a business is called analyzing of data. For example, analyzing of present data with past data, or actual data with projected data.
- Reporting:- Forwarding the results to financial users like chairman, directors, managers etc. is called reporting of data.
2- Discuss in detail the nature of accounts i.e. assets, expenses, liabilities, revenues and capital by giving examples.
- Assets:- The resources of a business are called assets. They are of two types:- - Fixed Assets: Land, Building, Equipment, Vehicle etc. - Current Assets: Cash, cash at bank, A/c receivable, debtors, prepaid expenses.
- Expenses:- The amount spent in a business with a view to gain profit in the future is called expense. Examples are rent expenses, salaries expenses, advertisement expenses etc.
- Liabilities:- The financial responsibilities of the business for which it is liable are called liabilities. They are divided into two types:- - Fixed Liabilities (Bank Loan, Bonds Payable, Mortgage Payable.) - Current Liabilities (Notes Payable, Unearned