Accounting Homework Help
Accounting is called the language of business, and the one who speaks it eloquently are known as accountants. It is an art of collecting, recording, summarizing and presenting the numerical data. A large company can have several accounting departments, for instance, account receivable, accounts payable, etc. An accountant is not only concerned with the money but also about other aspects of the business, such as, is resources (inventory and raw material) have been correctly allocated and efficiently utilized? Accounts are majorly divided into five categories i.e. assets, liabilities, income, expenditure and net assets. There are following four basic concepts that should be kept in mind while preparing accounts:-
- Accrual concepts: – Accounts shall be made on an accrual basis and not on cash basis.
- Consistency concept: – One method adopted shall be consistently followed until and unless there is a valid reason to change the same.
- Going concern concept: – Accounts are prepared with the assumption that business will go on for the foreseeable future.
- The idea of prudence:- Anticipate no profit and provide for all losses.
The objectives of maintaining the accounts are to make full and systematic record of all business transaction, to calculate profit and loss of the firm and to portray the financial position of the company.
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