Basics of accounting

[Baijnath]

Hello, I am from a engineering background and decide to go for MBA in Finance specialization. Where all the topics are very much difficult in sense. I am very worried about the topic Accounting. I follow 3 or 4 books to gain some of the basic information which will help me in first year to understand the topic. But can understand nothing, I think I select the wrong book for the reference. So if there anyone having any kind of information or note about the basics of Accounting, please provide me. I will be very thankful to you.

[Jackson2]

Accountancy is defined as process of communicating about the financial information about a business entity or the shareholder or the finance mangers. The information is generally in the language of financial statements, which is used to explain the money terms of the economic resources, under the management of organization. It is from the branch of mathematical science, this is use for getting the track of success and failure in business process. The principal of accountancy are applied to the business entities in three ways, they named as accounting, book keeping and auditing. Accounting is introduced by the American Institute of Certified Public Accountants (AICPA), by simply defining that it is the art of recording, classifying, and summarizing in some significant manner, in order to money and transaction.

[johnson22]

There are some general rules those are present in accounting concept, the general rules which are used in the accounting are respectively principles and guidelines. Where the detailed, complicated and some legalistic accounting rules are present. As for example the Financial Accounting Standards Board (FASB) is using the fundamental rules of accountancy, which are consists of principal and guidelines of that. Look to the phrase "generally accepted accounting principles" or which is also known as "GAAP", here there basic principles of accounting are there which are termed as guideline also. And these are a) some basic accounting principles and guidelines, b) detailed rules and standards issued by FASB and the procedures which is introduced by Accounting Principles Board (APB) and the last rule is generally accepted industry practices.

[Snake08]

The Book keeping is the process of tracking or recording the financial transactions of a small or big organization. This includes payments which are made by the individual or the company along with the sales, purchase and the other investments. This is basically performed by the book-keeper. As per mu opinion this is quite confused with the accounting techniques. An accountant is generally performs the accountancy. The book keeper who is create the book keeping of the company and the by using this accountancy is work for keep track on the financial changes. Some of the common methods which is used to maintaining the book keeping are like Single-entry bookkeeping system and the other one is Double-entry bookkeeping system. This are seen as the real process for book-keeping and the other processes those are involves while making the record.

[Nutty]

There is another basic feature of the accountancy which is known as “daybook” , which is the most chronological and descriptive manner. It uses to record the day to day financial transactions of an organization. This is very much useful for small companies, where all big companies are not following this one. This is also called as “book of original entry”. After the completion of one month the status of full month is record from this daily book. This book is used to track all field of management in daily wise, the fields are like the Sales, credits, Purchases etc. so according to these a daybook is categorized as “Sales daybook”, which is used to monitor the daily sales invoices. Then “Sales credits daybook”, which is for record all sales credit note of a firm. “Purchases daybook”, this is for record the purchase invoices. “Purchases credits daybook”, for storing all purchases credit notes. And the last one is “Cash daybook” which is also known as “cash book”, where the information about all money received along with this money paid out is recorded.