Entreprise et comptabilité - en anglais

INTRODUCTION TO ACCOUNTING

Contents

1.0 Aims and Objectives

1.1 Introduction

1.2 Book- Keeping

1.2.1 Meaning

1.2.2 Definition

1.2.3 Objectives

1.3 Accounting

1.3.1 Meaning

1.3.2 Definition

1.3.3 Objectives

1.3.4 Importance

1.3.5 Functions

1.3.6 Advantages

1.3.7 Limitations

1.4 Methods of Accounting

1.4.1 Single Entry

1.4.2 Double Entry

1.4.3 Steps involved in double entry system

1.4.4 Advantages of double entry system

1.5 Meaning of Debit and Credit

1.6 Types of Accounts and its rules

1.6.1 Personal Accounts

1.6.2 Real Accounts

1.6.3 Nominal Accounts

1.7 Distinction between Book Keeping and Accounting

1.8 Branches of Accounting

1.8.1 Financial Accounting

1.8.2 Cost Accounting

1.8.3 Management Accounting

1.9 Let us Sum Up

1.10 Lesson-End Activities

1.11 Check your Progress

1.12 Points for Discussion

1.13 References

1.0 AIMS AND OBJECTIVES

i) To know the Meaning ,Definition and objective of Book- Keeping

ii) To study the objectives, functions, importance and limitations of

Accounting

iii) To understand the methods of Accounting, kinds of Accounts and

Accounting rules.

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iv) To study the difference between Book- keeping and Accounting

v) To study the various branches of Accounting

1.1 INTRODUCTION

In all activities (whether business activities or non-business activities) and in

all organizations (whether business organizations like a manufacturing entity or

trading entity or non-business organizations like schools, colleges, hospitals, libraries,

clubs, temples, political parties) which require money and other economic resources,

accounting is required to account for these resources. In other words, wherever money

is involved, accounting is required to account for it. Accounting is often called the

language of business. The basic function of any language is to serve as a means of

communication. Accounting also serves this function.

1.2. MEANING AND DEFINITION OF BOOK- KEEPING

1.2.1 Meaning

Book- keeping includes recording of journal, posting in ledgers and balancing

of accounts. All the records before the preparation of trail balance is the whole subject

matter of book- keeping. Thus, book- keeping many be defined as the science and art

of recording transactions in money or money’s worth so accurately and systematically,

in a certain set of books, regularly that the true state of businessman’s affairs can be

correctly ascertained. Here it is important to note that only those transactions related

to business are recorded which can be expressed in terms of money.

1.2.2 Definition

“Book- keeping is the art of recording business transactions in a systematic

manner”. A.H.Rosenkamph.

“Book- keeping is the science and art of correctly recording in books of

account all those business transactions that result in the transfer of money or money’s

worth”. R.N.Carter

1.2.3 Objectives of Book- keeping

i) Book- keeping provides a permanent record of each transactions.

ii) Soundness of a firm can be assessed from the records of assets and abilities

on a particular date.

iii) Entries related to incomes and expenditures of a concern facilitate to know

the profit and loss for a given period.

iv) It enables to prepare a list of customers and suppliers to ascertain the amount

to be received or paid.

v) It is a method gives opportunities to review the business policies in the light

of the past records.

vi) Amendment of business laws, provision of licenses, assessment of taxes etc.,

are based on records.

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1.3 ACCOUNTING

1.3.1 Meaning of Accounting

Accounting, as an information system is the process of identifying, measuring

and communicating the economic information of an organization to its users who need

the information for decision making.

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