Guide

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LESSON 1 INTRODUCTION TO ACCOUNTING
Contents 1.0 Aims and Objectives 1.1 Introduction 1.2 Book- Keeping 1.2.1 Meaning 1.2.2 Definition 1.2.3 Objectives 1.3 Accounting 1.3.1 Meaning 1.3.2 Definition 1.3.3 Objectives 1.3.4 Importance 1.3.5 Functions 1.3.6 Advantages 1.3.7 Limitations 1.4 Methods ofAccounting 1.4.1 Single Entry 1.4.2 Double Entry 1.4.3 Steps involved in double entry system 1.4.4 Advantages of double entry system 1.5 Meaning of Debit and Credit 1.6 Types of Accounts and its rules 1.6.1 Personal Accounts 1.6.2 Real Accounts 1.6.3 Nominal Accounts 1.7 Distinction between Book Keeping and Accounting 1.8 Branches of Accounting 1.8.1 Financial Accounting 1.8.2 Cost Accounting 1.8.3Management Accounting 1.9 Let us Sum Up 1.10 Lesson-End Activities 1.11 Check your Progress 1.12 Points for Discussion 1.13 References

1.0 AIMS AND OBJECTIVES
i) ii) To know the Meaning ,Definition and objective of Book- Keeping To study the objectives, functions, importance and limitations of Accounting

iii) To understand the methods of Accounting, kinds of Accounts and Accounting rules.This watermark does not appear in the registered version - http://www.clicktoconvert.com

1 iv) To study the difference between Book- keeping and Accounting v) To study the various branches of Accounting

1.1 INTRODUCTION
In all activities (whether business activities or non-business activities) and in all organizations (whether business organizations like a manufacturing entity or tradingentity or non-business organizations like schools, colleges, hospitals, libraries, clubs, temples, political parties) which require money and other economic resources, accounting is required to account for these resources. In other words, wherever money is involved, accounting is required to account for it. Accounting is often called the language of business. The basic function of any language is toserve as a means of communication. Accounting also serves this function.

1.2. MEANING AND DEFINITION OF BOOK- KEEPING
1.2.1 Meaning Book- keeping includes recording of journal, posting in ledgers and balancing of accounts. All the records before the preparation of trail balance is the whole subject matter of book- keeping. Thus, book- keeping many be defined as the science and art of recordingtransactions in money or money’s worth so accurately and systematically, in a certain set of books, regularly that the true state of businessman’s affairs can be correctly ascertained. Here it is important to note that only those transactions related to business are recorded which can be expressed in terms of money. 1.2.2 Definition “Book- keeping is the art of recording business transactions in asystematic manner”. A.H.Rosenkamph. “Book- keeping is the science and art of correctly recording in books of account all those business transactions that result in the transfer of money or money’s worth”. R.N.Carter 1.2.3 Objectives of Book- keeping i) ii) iii) iv) v) vi) Book- keeping provides a permanent record of each transactions. Soundness of a firm can be assessed from the records of assetsand abilities on a particular date. Entries related to incomes and expenditures of a concern facilitate to know the profit and loss for a given period. It enables to prepare a list of customers and suppliers to ascertain the amount to be received or paid. It is a method gives opportunities to review the business policies in the light of the past records. Amendment of business laws, provision oflicenses, assessment of taxes etc., are based on records.

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1.3 ACCOUNTING 1.3.1 Meaning of Accounting Accounting, as an information system is the process of identifying, measuring and communicating the economic information of an organization to its users who need the information for decision making....