Introduction to Accounting (1).pptx - Introduction to...

Introduction to
Accounting
Author: Davinder Kaur Sohi

Introduction to Accounting
Accounting may be defined as the process of recording, classifying, summarizing, analyzing and interpreting
the financial transactions and communicating the results thereof to the person interested in such information.
Components of Accounting:
 Recording
 Classifying
 Summarizing
 Dealing with Financial Transactions
 Analyzing and Interpreting
 Communicating
09/22/2020 Author: Davinder Kaur Sohi 2
Accounting Defined

Introduction to Accounting
•
To keep systematic record- Accounting is done to keep systematic record of financial transactions. In the absence of
accounting there have been terrific burden on human memory which is most cases would have been impossible to bear.
• To protect business properties- Accounting provides protection to business properties from unjustified and
unwarranted use.
•
To ascertain the operational profit or loss- Accounting helps in ascertaining the net profit earned or loss suffered on
account of carrying the business. This is done by keeping a proper record of revenues and expenses of a particular period.
• To ascertain the financial position of business- Balance sheet is a statement of assets and liabilities of the business on a