chapter 1st of accountancy of class 11th explain
Answers
Answer:
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Explanation:
Accounting: Accounting is the art of recording, classifying, summarizing in a significant manner, transactions and events which are of financial character, and interpreting the results thereof.
Based on the above definition, ACCOUNTING PROCESS can be explained:
The Accounting process starts with the identification of the Financial transactions (events or transactions which can be measured in terms of money), then recording them in the form of Journal Entries (eg. Cash Book, Sales Journal, Purchase Journal, Purchase Return Journal, Sales Return Journal etc), then the transactions are classified and posted them into ledger, then the transactions are summarized in the Trial Balance, Profit/Loss Account and Balance Sheet. After that we Analyse & Interpret them and finally the information is being used by the various parties interested in the enterprise.