Objectives of Accounting

  Objectives of Accounting Objectives of Accounting As an information system, the basic objective of accounting is to provide useful information to the interested group of users, both external and internal. The necessary information, particularly in case of external users, is provided in the form of financial statements, viz., profit and loss account and balance … Read more

Qualitative Characteristics of Accounting Information

 Qualitative Characteristics of Accounting Information Qualitative Characteristics Qualitative characteristics are the attributes of accounting information which tend to enhance its understandability and usefulness. In order to assess whether accounting information is decision useful, it must possess the characteristics of reliability, relevance, understandability and comparability. Reliability Reliability means the users must be able to depend on … Read more

Accounting as a Source of Information

  Accounting as a Source of Information Accounting as a Source of Information As discussed earlier, accounting is a definite processes of interlinked activities, that begins with the identification of transactions and ends with the preparation of financial statements. Every step in the process of accounting generates information. Generation of information is not an end … Read more

Why do the Users Want Accounting Information?

  Why do the Users Want Accounting Information? Why do the Users Want Accounting Information? • The owners/shareholders use them to see if they are getting a satisfactory return on their investment, and to assess the financial health of their company/business. • The directors/managers use them for making both internal and external comparisons in their … Read more

History and Development of Accounting

 History and Development of Accounting History and Development of Accounting Accounting enjoys a remarkable heritage. The history of accounting is as old as civilisation. The seeds of accounting were most likely first sown in Babylonia and Egypt around 4000 B.C. who recorded transactions of payment of wages and taxes on clay tablets. Historical evidences reveal … Read more

Introduction and Meaning of Accounting

Introduction and Meaning of Accounting  Introduction to Accounting  Over the centuries, accounting has remained confined to the financial record-keeping functions of the accountant. But, today’s rapidly changing business environment has forced the accountants to reassess their roles and functions both within the organisation and the society. The role of an accountant has now shifted from … Read more

Economic Events In Accounting

 Economic Events Economic Events In Accounting  Business organisations involves economic events. An economic event is known as a happening of consequence to a business organisation which consists of transactions and which are measurable in monetary terms. For example, purchase of machinery, installing and keeping it ready for manufacturing is an event which comprises number of … Read more

Identification, Measurement, Recording and Communication In Accounting

 Identification, Measurement, Recording and Communication Identification, Measurement, Recording and Communication In Accounting  Identification : It means determining what transactions to record, i.e., to identity events which are to be recorded. It involves observing activities and selecting those events that are of considered financial character and relate to the organisation. The business transactions and other economic … Read more

Interested Users of Information In Accounting

 Interested Users of Information In Accounting  Interested Users of Information In Accounting  Accounting is a means by which necessary financial information about business enterprise is communicated and is also called the language of business. Many users need financial information in order to make important decisions. These users can be divided into two broad categories: internal … Read more