Before why we need accounts knowledge we need to understand the deep meaning of accounting i.e What is accounting/accountancy. The term ‘accountancy‘ is explained by many authors in their own language but they all trying to understand the meaning of accountancy in a single manner i.e the recording of all the business transaction and maintains a systematic record of the daily transactions. In other words, Accounts may be explained -An account is simply a record of all changes to a specific asset, liability, or equity item Or we can say that A report or description of an event or experience, a record or statement of financial expenditure and receipts relating to a particular period or purpose. Now let’s go to know why we need to attain the knowledge of accounts.

 

Need for Accounting knowledge:-
  1. Real-time Decision making
  2. Record keeping, Book Keeping
  3. Prevention for fraud & Discovery for fraud
  4. Getting of funds & loans
  5. Reputation and Credit Building
  6. To ascertain the exact profit & loss for the respective year.
  7. To ascertain the financial position of any firm, company or organisation.
  8. How to follow accounting standards (a set of rules and regulations or policies)
  9. Seeks investor’s attention.
  10. Monitoring Cash flow.
  11. Helps in statutory compliance (goods&service return, income tax returns, etc)
  12. To create the budget and future projections for business.
  13. As a carrier point of view {, You’ll be always in-demand, you will never be bored, you are an expert in the particular field, you will have an opportunity to explore yourself }
  14. Reporting profits.
Basics Of Accounting:-
  • Financial Accounting Basics
  • Financial Accounting
  • Accounting Equation
  • Expanded Accounting Equation
  • Account Format
  • Chart of Accounts
  • Asset Accounts
  • Liability Accounts
  • Equity Accounts
  • Contra Account
  • Revenue Accounts
  • Expense Account
  • General Ledger
  • Debits and Credits
  • Double Entry Accounting
  • Business Events
  • General Journal
  • Trial Balance
  • Accounting Principles
  • Accounting Cycle
  • Financial Statements
  • Financial Ratios
  • Assets
Types Of accounts:-

There are 5 types of accounts or we can say that accounts can be classified into 5 types, they are as follows:-

  1. Assets:- Includes all the property of any firm or Org.
  2. Liability:- means all the borrowing which owes from outsiders.
  3. Capital:- It means the amount invested by the owner of the business at the time of the beginning.
  4. Incomes:- The sources from any Org. earns money or generate their revenues. For e.g. rent received, interest received, dividend received, etc.
  5. Expenses:-The amount spent by any Org. for operating the business, includes daily to daily expenses also. For e.g. salary, bad debts ,depreciation,rent & taxes,etc.

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