Transcription of BASIC ACCOUNTING PRINCIPLES
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BASIC ACCOUNTING PRINCIPLES
DIPLOMA IN INSURANCE SERVICESMODULE - 1 NotesBasic ACCOUNTING PRINCIPLES Business Environment 605 BASIC 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. The procedure to recordall these transactions is known as Book-keeping .In other words the book keeping may be defined as an activityconcerned with the recording of financial data relating tobusiness operations in an orderly manner.
Accounting is based on an efficient system of book keeping. Accounting is the analysis & interpretation of book keeping records. It includes not only the maintenance of accounting ... uniform and comparable. 3. Accrual: Accounting attempts to recognize non-cash events and circumstances as they occur. Accrual is
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