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 following is the complete cycle of Accounting a) The opening balances of accounts from the balance sheet & day to day business transaction of the accounting year are first recorded in a book known as journal. b) Periodically these transactions are transferred to concerned accounts known as ledger accounts.
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