Difine accounting and discuss the concepts and conventions of accounting
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Accounting is the process of recording, classifying, analysing, summarising and intrepretation of Financial information of a business concern.
Accounting concepts:
1 . Separate Entity concept - it can be shortly explained as the following.
Here the owner of the company or the investor of the company will be treated as a liability because it is an assumption that company and owner is separate.
2. Matching concept - both debit as we as credit balance has to tally. and finally balance sheet has to be tallied by both Assets and Liability.
3. Going Concern Concept - It ia assumed that business has perpetual existence and it is never ending process.
4. Money measurement concept - Each and every transaction and entry is subject related to Money.
5. Dual concept - related to debit and credit side.
Accounting concepts:
1 . Separate Entity concept - it can be shortly explained as the following.
Here the owner of the company or the investor of the company will be treated as a liability because it is an assumption that company and owner is separate.
2. Matching concept - both debit as we as credit balance has to tally. and finally balance sheet has to be tallied by both Assets and Liability.
3. Going Concern Concept - It ia assumed that business has perpetual existence and it is never ending process.
4. Money measurement concept - Each and every transaction and entry is subject related to Money.
5. Dual concept - related to debit and credit side.
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