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BASIC ACCOUNTING PRINCIPLES

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DIPLOMA IN INSURANCE SERVICESMODULE - 1NotesBasic ACCOUNTING PRINCIPLES Business Environment 605BASIC ACCOUNTING INTRODUCTIONWe have studied economic activities which have been convertedinto business activities. In business activity a lot of give &take exist which is known as transaction. Transaction involvestransfer of money or money s worth. Thus exchange of money,goods & services between the parties is known to have resultedin a transaction. It is necessary to record all these transactionsvery systematically & scientifically so that the financialrelationship of a business with other persons may be properlyunderstood, profit & loss and financial position of the businessmay be worked out at a particular date.

Basic Accounting Principles Business Environment 64 the results disclosed in the financial statements will be uniform and comparable. 3. Accrual: Accounting attempts to recognize non-cash events and circumstances as they occur. Accrual is concerned with expected future cash receipts and payments. It is the accounting process of recognizing

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