Simplified Accounting Concepts

Hello Guys, Today we discuss about Accounting Equation- Concept, Meaning and Formulas.  Accounting Equation  is the basis for Double Entry System of Book Keeping. Total assets of the business firm are provided by the lenders and the owners. Therefore, at any point of time, the total assets of a business are equal to its total liabilities. Liabilities or loans to the outsiders are known as "liabilities" but liability to the owners, in accounting is referred to as "capital". Accounting Equation We Learn- Meaning of Accounting Equation Transactions affecting two items Transactions affecting more than two items Meaning of Accounting Equation Accounting Equation also known as Balance Sheet Equation, which is a mathematical expression which shows the assets and liabilities of the firm are equal, here liabilities include owner's equity and claims from outsiders. It means total claims (claim of outsiders and claim of proprietors) will always equal to the total assets of...

Hey Guys, so today we will study the most important and interesting topic of  Accounts. Golden Rules of Accounting- Rules of Debit and Credit which is the base of accounts and the language of accounts. Under double entry system of Book keeping each transactions has two aspects. One is called debit and another is credit where, debit records incoming or receiving aspect and credit records outgoing or giving aspect. Table Of Contents Meaning of an Account Account is a summarised record of transactions at one place related to the particular head. Account is prepared for sort and store the transactions. Each individual account is stored in the general ledger and used to prepare the financial statements at the end of the accounting period. An Account shows specific assets, liability, revenues, assets, equity.  An Account is divided into two parts which is known as Debit and Credit, Debit and Credit are two opposing terms.  Dr . is used for Debit and ...

Today we discuss about the  Basis of Accounting  - Cash and Accrual Basis of Accounting   .   Accounting is concerned with recording of the financial transactions(which can be measured in terms of money), this deals with the timing of revenue recognition which means when should the revenue be recognized in the books of accounts. There are two approaches of recording the revenues in the books of accounting- Cash basis of accounting and Accrual basis of accounting. Let us discuss and find out the information about Basis of Accounting. Table Of Contents Meaning of Cash Basis of Accounting Under Cash Basis of Accounting the transactions are recorded when cash is received or paid. This system is much more simplified accounting system, cash basis of accounting only recognizes income and expenses, when cash is actually collected and paid. Cash basis of accounting is an accounting system that recognizes and records income and expenses as they are p...