Chapter-1

Basic of Acconting
Meaning of Accounting
Recording
Classifying
Summarizing.

Book-keeping of Accounting
Book keeping is the art of recording business transactions in a systematic
manner.
Advantages of book-keeping
Reliable Record.
Calculation of Profit (or) Loss
Calculation of Dues
Control over Borrowings
Ascertainment of the growth of business
Ascertainment of the financial position
Identifying the Dos and Donts
Fixing the Selling price
Taxation.

Method of Accounting
Single Entry System
Double Entry System.

Meaning of Single Entry System

Single entry system is an incomplete system of recording

financial transaction.

Meaning of Double Entry System

Double entry system is a complete system of recording and
recording financial transactions.
Types of Accounting
Accounting

Personal

Impersonal

Real

Nominal

Rules for the Classified Accounts

1) Personal Accounts:
By (or) Debit - The Receiver
To (or) Credit - The Giver
2) Impersonal, Real (or) Capital Accounts:
By (or) Debit - What Come In?
To (or) Credit - What Goes Out?
3) Nominal Account / Fictitious Account:
By (or) Debit - All Expenses and Losses
To (or) Credit - All Incomes and Gains

Personal Accounting
It deals with the accounting recording to personal and takes the
following forms
Example: Kumar a/c, Indian Bank a/c, T.V.S. ltd. a/c.
One aspect may be Receiver
Another one may be Giver