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.
interest, rent (unpaid), wages and salaries, taxes. Thus, we make record of all expenses and incomes relating to the accounting period whether actual cash has been disbursed or received or not. In order to keep a complete record of the entire transactions of any business it is necessary to keep the following accounts:
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