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Entity Concept,Accounting concepts.

(a) Entity concept: Entity concept states that business enterprise is a separate identity apart from its owner. Accountants should treat a business as distinct from its owner. Business transactions are recorded in the business books of accounts and owner’s transactions in his personal books of accounts. The practice of distinguishing the a airs of the business from the personal a airs of the owners originated only in the early days of the double-entry book-keeping. This concept helps in keeping business a airs free from the in uence of the personal a airs of the owner. This basic concept is applied to all the organizations whether sole proprietorship or partnership or corporate entities. Entity concept means that the enterprise is liable to the owner for capital investment made by the owner. Since the owner invested capital, which is also called risk capital, he has claim on the pro t of the enterprise. A portion of pro t which is apportioned to the owner and is immediately p...
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Accounting Principal.

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    ACCOUNTING PRINCIPLES:- “Accounting principles are a body of doctrines commonly associated with the theory and procedures of accounting serving as an explanation of current practices and as a guide for selection of conventions or procedures where alternatives exist.” Accounting principles must satisfy the following conditions: 1. They should be based on real assumptions; 2. They must be simple, understandable and explanatory; 3. They must be followed consistently; 4. They should be able to re ect future predictions; 5. They should be informational for the users.
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Accounting Concepts.

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Accounting Concepts:- INTRODUCTION Let us imagine a situation where you are a proprietor and you take copies of your books of account to ve  di erent accountants. You ask them to prepare the nancial statements on the basis of the above records  and to calculate the pro ts of the business for the year. After few days, they are ready with the nancial  statements and all the ve accountants have calculated ve di erent amounts of pro ts and that too with  very wide variations among them. Guess in such a situation what impact would it leave on you about  accounting profession. To avoid this, a generally accepted set of rules have been developed. This generally  accepted set of rules provides unity of understanding and unity of approach in the practice of accounting  and also in better preparation and presentation of the nancial statements.  Accounting is a language of the business. Financial statements prepared by the accou...
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Evolution of Accounting as a social science.

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-Evolution of Accounting as a social science:-      In its oldest form, accounting aided the stewards to discharge their stewardship function. The wealthy men employed stewards to manage their property; the stewards in turn rendered an account periodically of their stewardship. This ‘Stewardship Accounting’ was the root of nancial accounting system. The presently followed system of double-entry book-keeping has been developed only in the 15th Century. However, historians found records of debit and credit dating back to the 12th Century. Although double-entry system was followed, ‘stewardship accounting’ served the purpose of businessmen and wealthy persons at that time. In most of the countries, stewardship accounting was prevalent till the emergence of large-scale enterprises in the form of public limited companies. In the second phase, the idea of nancial accounting emerged with the concept of joint stock company and divorce of ownership from the manag...
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Location: Kolkata, West Bengal, India
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Objective of Accounting.

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Objective of Accounting :-  The objectives of accounting can be given as follows: 1. Systematic recording of transactions – Basic objective of accounting is to systematically record the  aspects of business transactions i.e. book-keeping. These recorded transactions are later on  classi ed and summarized logically for the preparation of nancial statements and for their analysis and  interpretation. 2 . Ascertainment of results of above recorded transactions – Accountant prepares pro t and loss  account to know the results of business operations for a particular period of time. If revenue exceed  expenses then it is said that business is running pro tably but if expenses exceed revenue then it  can be said that business is running under loss. The pro t and loss account helps the management  and di erent stakeholders in taking rational decisions. For example, if business is not proved to be  remunerative or pro table, the caus...
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Location: Kolkata, West Bengal, India
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Private Policy.

                          Private Policy This privacy policy sets out how “Theaccountingblog” uses and protects any information that you give “[business name]” when you use this website. “[. Theaccountingblog” is committed to ensuring that your privacy is protected. Should we ask you to provide certain information by which you can be identified when using this website, then you can be assured that it will only be used in accordance with this privacy statement. “[ Theaccountingblog” may change this policy from time to time by updating this page. You should check this page from time to time to ensure that you are happy with any changes.  What we collect We may collect the following information: What ABHISHEK KUMAR Dumbanaaks.2013@gmail.com  we do with the information we gather We require this information to understand your needs and provide you with a better service, and in particular fo...
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What is the meaning of Accounting?

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 -- What is the meaning of Accounting?  The Committee on Terminology set up by the American Institute of Certi ed Public Accountants formulated the following de nition of accounting in 1961: “Accounting is the art of recording, classifying, and summarising in a signi cant manner and in terms of money, transactions and events which are, in part at least, of a nancial character, and interpreting the result thereof.”
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Location: Kolkata, West Bengal, India
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