essay's
FINANCIAL ACCOUNTING AND ANALYSIS
Accounting :
“The art of recording, classification, summarizing, analyzing, and interpretation of business transactions”
Objectives:
To know the profit or loss
To know the financial position
Limitations:
Record only monitory transactions
Record only historical information
No real information
Accounting terms:
Business transaction: Any exchange of money or money worth as goods &services between two parties is called a business transaction.
Capital: This is an amount introduced by owner or partner, share holder in the business or company.
Expends: An expenditure whose benefit is enjoy immediately, such as salary, rent etc.
Loss: Expenditure without any benefits
Drawings: Amount or goods with draw by the owner of a business for personal use.
Income: Any amount realized by the sale of goods or assets or services.
Profit: The excess of income over expenditure.
Debtor: The debtor is a person who owes money to the business.
Creditor: The person who lend to the business .
Assets: Any physical thing or right owned that has money value is a asset.
Net worth: Assets - outside liability or capital + retained earnings of a business.
Accounting concept
1. Business entity concept
2. Money measurement concept
3. Going concern concept
4. Dual concept
5. Cost concept
6. Accounting period concept
7. Real concept
8. Materiality concept
Business entity concept: Business unit is separate from the person whose supplied capital t o each properties.
Money measurement concept: Records only monetary transactions.
Going concern concept: Business has a reasonable expectation of continuing business at profit for indefinite period of time.
Dual concept :Receiving and giving aspects
Cost concept: This concept doesn’t means the assets will always be shown at cost but it means the past become bases for all future accounting for the past.
Accounting concept: Life of business can be divided into two
Accounting :
“The art of recording, classification, summarizing, analyzing, and interpretation of business transactions”
Objectives:
To know the profit or loss
To know the financial position
Limitations:
Record only monitory transactions
Record only historical information
No real information
Accounting terms:
Business transaction: Any exchange of money or money worth as goods &services between two parties is called a business transaction.
Capital: This is an amount introduced by owner or partner, share holder in the business or company.
Expends: An expenditure whose benefit is enjoy immediately, such as salary, rent etc.
Loss: Expenditure without any benefits
Drawings: Amount or goods with draw by the owner of a business for personal use.
Income: Any amount realized by the sale of goods or assets or services.
Profit: The excess of income over expenditure.
Debtor: The debtor is a person who owes money to the business.
Creditor: The person who lend to the business .
Assets: Any physical thing or right owned that has money value is a asset.
Net worth: Assets - outside liability or capital + retained earnings of a business.
Accounting concept
1. Business entity concept
2. Money measurement concept
3. Going concern concept
4. Dual concept
5. Cost concept
6. Accounting period concept
7. Real concept
8. Materiality concept
Business entity concept: Business unit is separate from the person whose supplied capital t o each properties.
Money measurement concept: Records only monetary transactions.
Going concern concept: Business has a reasonable expectation of continuing business at profit for indefinite period of time.
Dual concept :Receiving and giving aspects
Cost concept: This concept doesn’t means the assets will always be shown at cost but it means the past become bases for all future accounting for the past.
Accounting concept: Life of business can be divided into two