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Introduction to Accounts
Last Updated On: 07-Nov-2021Posted On: 07-Nov-2021
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Accounting
Accounting is an art of recording, classifying and summarizing the monetary transactions in an efficient manner and interpreting the results.
Functions of Accounting
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Identifying: Identifying the business transactions from various sources is the first step of accounting.it involves observing all business activities and identifying those which are considered as financial transactions.
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Recording: Only those transactions are recorded in books of accounts which can be measured in terms of money. It involves recording them in a journal and keeping a systematic record of all of them.
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Classifying: After recording the transactions they are classified. Classification refers to the grouping of all the transactions of same nature at one place.
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Summarising: It is the process of putting the balances of all accounts at one place i.e. Trial balance.
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Communicating: Accounting also includes the communication of financial data like financial statements to the users who analyse them as per individual requirements.
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