Introduction to Accountancy

Introduction

In all activities and in all organisations which require money and other
economic resources accounting is required to account for these
resources.

In other words ,wherever money resource is involved accounting is

required to account for it.
 Meaning and Definition

Bookkeeping
Bookkeeping is a process of recording business transaction in the books of
accounts in very systematic manner.
According to J. R. Batliboi, “bookkeeping is an art of recording business
dealings in a set of books”

Accountancy
Accountancy refers to a systematic knowledge of accounting. It explains
‘why to do’ and ‘how to do’ of various aspects of accounting. It tells us why
and how to prepare the books of accounts and how to summarise the
accounting information and communicate it to the interested parties.
According to Kohler, “Accountancy refers to the entire body of theory and
process of accounting”.
Accounting

Accounting is often called as a language of a business. The basic

function of any language is to serve as a means of communication
accounting is also serve this function by communicating information to
the users.

According to American Accounting Association, 1966, “Accounting is

the process of identifying, measuring, and communicating economic
information to permit informed judgements and decisions by uses of
information.”
 Objectives of Accounting

1. To keep systematic records

2. To protect business properties

3. To ascertain the operational profit or loss

4. To ascertain the financial position of the business

5. To facilitate rational decision making

6. To communicate the results

7. To meet legal requirements

 Rules of Debit and Credit
Personal Accounts
Debit the Receiver
Credit the Giver

Real Accounts
Debit what comes in
Credit what goes out

Nominal Accounts
Debit all expenses and losses
Credit all incomes and gains