Question

Explain modern accounting and traditional accounting and differentiate between them

Answer 1

Answer:

Modern Accounting:- 1. It is a systematic process of identifying, recording, measuring, classifying, verifying, summarizing, interpreting and communicating financial information. It reveals profit or loss for a given period, and the value and nature of a firm's assets, liabilities and owners' equity.

Points for differentiate:-

1. resources available to a firm,
2. resources available to a firm,the means employed to finance those resources, and
3. resources available to a firm,the means employed to finance those resources, andthe results achieved through their use.

Traditional Accounting:- It actually comes in and goes out of your business, traditional accounting records income and expenses when you invoice your customers or receive a bill.

Points for differentiate:-

1. business assets you’ve bought (for example, stock or equipment)
2. business assets you’ve bought (for example, stock or equipment)value of stock and work in progress at the end of your accounting period
3. business assets you’ve bought (for example, stock or equipment)value of stock and work in progress at the end of your accounting perioddetails of payments to employees (for example, wages, expenses or benefits)