Accounting is defined as the process of identifying, measuring, summarizing, recording, classifying and presenting the financial transactions in an appropriate manner.
The aim of consistency principle is to preserve the comparability of financial statements. It requires that rules, practices, concepts and principlesused in...
Accounting cycle is a step by step process of collecting, summarizing, recording andpresenting financial information. The Accounting process can be divided...
It is the gross inflow of economic resources (whether cash, receivables, or other assets) arising from normal business activities of an entity whether it is the sale of goods or
Accounting is a combination of three processes: Process of identifying and recording the business transactions; Classification and summarization of recorded transactions; and Reporting that information in a specific manner in
The main objectives of accounting are: • Maintenanceof accounting records for users;• Communication of financial information to users in a summarized and meaningful shape;• Measurement of results of operational activities;
There are internal and external users of financial information of a business and their needs to that information differ based on their respective roles. The table below summarizes the information
Accounting is divided mainly into three categories which include: Financial Accounting Financial Accounting is the recording of business transactions in the books of account so that the operating results of
Cash Basis: Under the cash basis of accounting, financial transactions are recorded as and when cash is received or paid. No entry is passed when a payment or receipt becomes
Matching principle is linked with the accrual basis of accounting and refers to the booking of associated revenues and costs in the same accounting period so that accurate profit could
Going Concern Assumption refers to the basic assumption by the management at the time of preparing the financial statements that the business is expected to sustain for a long period
Financial statements are generally made under the historical cost convention which requires that all the items will be recorded at the purchase cost and will not be adjusted to their
The Consistency principle aims to preserve the comparability of financial statements. It requires that accounting practices and rules used in accounting are followed consistently from one period to the other.
The concept of Substance over Form concept implies that the capture and recording of financial transactions should be based on the economic substance to the entity rather than being solely
