Tally 9.0 ERP

INTRODUCTION TO ACCOUNTING

Accounting:-

                        Accounting is the language of business. It is the art of recording classifying   and   summarizing   in   a   significant   manner   and   in   terms   of   money,   transactions   and events which are in part at least of a Financial Character and interpreting the result thereof. In simple terms accounting means

a)         Recording

b)         Classifying

c)         Summarizing all the transactions which take place in the day to day business.

    This is done for a particular period of 12 months called a  “Financial Year”.  It generally starts on 1st April and ends on 31st March.

         All   the   information   of   this   period   taken   for   Interpreting   Financial   events   is   helpful   for decision making.

         A person running a business needs to know his :-

         1)         Assets.

         2)         Liabilities.

         3)         Profit or Loss.

         4)         Accordingly the future planning.

         

                     In short accounting means recording the transactions. So what is transaction?

        

          Transaction   is   an   event,   which   definitely   affects   the   financial   position   of   the   business. 

      

               Hence, to become a transaction the event must fulfill the condition of making some change in the expenditure, income owning and Owing  The event taking place must make effect on profit or loss of the business. Merely placing of an order or just an inquiry is not a transaction.