Archive about 'Introduction to Accounting'

Content Page on Introduction to Accounting

Tweet This Content Page helps you to navigate to all articles relating to the basic introduction to Accounting. From each topic, you can return to this Content Page. Click to the respective topic: Content Page Explain the term Accounting and Accountancy Explain the terms Accounting, Accounts and Bookkeeping Explain the difference between Financial Accounting and […]

Explain the terms Accounting and Accountancy

Tweet Earlier article describes the difference between accounting and bookkeeping and accounting and management accounting. Below explain the term Accountancy which normally been used loosely with Accounting Accountancy: the systematic knowledge of accounting that explains the various aspects of accounting. It explains ways how to prepare the books of accounts and why such preparation are […]

What are the objectives of Accounting?

Tweet Major objectives of Accounting: maintain accounting records; calculate the result of operation; ascertain the financial position; communicate the financial information to the relevant users { click here to the Content Page on Introduction to Accounting }

Why do businesses keep accounts?

Tweet In earlier article, we understand the terms: accounting,accounts & bookkeeping, next is what are the major reasons for keeping accounts?Some major reasons for businesses to keep accounts are as follows:- Keeping track of money by showing where it came from and how it has been spent By producing accounting information, these accounting records are […]

Explain the terms: Accounting, Accounts & Bookkeeping

Tweet The following terms are commonly used in the Accountancy profession:Accounting: which is the process of collecting, recording, summarizing and communicating financial information. whereas Accounts are the records in which this information is recorded. and Bookkeeping is the keeping of the most basic records { click here to the Content Page on Introduction to Accounting […]

Difference Between Financial Accounting And Management Accounting

Tweet This article seeks to explain the main difference between financial accounting and management accounting or managerial accounting. DIFFERENCE NO 1: Financial accounting Management accounting Principal objectives Stewardship of business for benefit of shareholders Seek to improve economy, efficiency and effectiveness of operations As we know Financial accounting mainly focus on periodic reporting of accounting […]

Potential Uses Of the Financial Statements By Different Users

Tweet POSSIBLE USES OF┬áTHE FINANCIAL STATEMENTS BY DIFFERENT USERS: Equity Investor group: Assessing their investment Loan Creditor group: Assessing the ability to make repayment of loan Employee group: Assessing security of employment Analyst-adviser group: Assessing their investment Business contact group: For the suppliers: likelihood of future supply and for the customers: reliability of future supply […]

Understand The Difference Between Accounting And Bookkeeping

Tweet ACCOUNTING: Accounting is a four stage process of recording, classifying, summarizing and the interpretation of the financial statements. The four stage process are defined below: Recording- transactions being recorded in the books of the business Classifying- sorting and categorizing into meaningful and orderly types or manners Summarizing- the accounting data are summarized Interpreting- financial […]

Limitations Of The Financial Statements

Tweet WHAT DO YOU THINK ARE THE LIMITATIONS OF FINANCIAL STATEMENTS? Some of the limitations of the financial statements are as follows: As the historical costs and money measurement concepts govern the preparation of the balance sheet and income statements, hence these financial statements are essentially statements reflecting historical facts. It ignore inflationary trend and […]

Who Looks At The Financial Statements?

Tweet WHO ARE THE USERS OF THE FINANCIAL STATEMENTS? Equity Investor group: existing and potential shareholders; holders of convertibles, options or warrants Loan Creditor group: existing and potential holders of debentures and loan stock, provider of short term secured and unsecured loans and finances, including bankers Employee group : existing, potential and past employees Analyst-adviser […]