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Voucher A document that serves as evidence for a business transaction is called a Voucher. Sometimes, mistakenly seen as just a bill or receipt; it can have many other forms. It is not the appearance of it that matters it just needs to act as evidence of a transaction. When a transaction is entered, the […]

Accounting Equation It wouldn’t be wrong to say that this equation is the basis of all accounting. The Accounting Equation is based on the dual aspect concept of accounting, which says that every transaction has two aspects, debit and credit, and for every debit, there is equal and opposite credit. This equation is also called the […]

Overview and Meaning Real, Personal, and Nominal Accounts List of Examples – 3 Types of Accounts PDF Download Quiz Revision Video Practice Conclusion   Overview and Meaning In accounting, an account is a specific header created for grouping similar transactions. It is maintained in a T-shaped tabular format with multiple columns containing matching transactions that […]

Overview and Meaning Three Golden Rules Examples How to use Modern Approach Quiz Revision Video Practice PDF Download Conclusion   Overview and Meaning In the general sense of the English language, something described as “Golden” means prime quality. In the context of accounting, the golden rules are the main rules used to record financial transactions […]

Accounts Receivable – Definition The customer accounts (debtors) who owe money to a business for purchasing goods on credit are called accounts receivable. When the money is received within the same accounting period it becomes part of the company’s operating revenue, however, if not received in the same year it becomes “trade debtors” which is […]

Accounts Payable – Meaning Accounts payable are obligations of a business that originate because of purchases made on credit (e.g. for raw material, finished goods etc.), the money is yet to be paid for these transactions. Accounts payable account can be created by anyone who buys goods or services on credit and promises to pay […]

Accounting Cycle or Accounting Trail The accounting cycle is a chronological order in which an accounting process flows. It is a step by step process followed to achieve the ultimate goals of accounting. Firstly, the information is recorded in a book or accounting software (in the modern scenario) called a Journal. Then it is adjusted and […]

Double Entry Accounting According to the dual aspect principle of accounting, business is a separate independent entity. Double-entry accounting system includes receiving benefits from some sources and giving it to some others. Benefits received and benefits provided should always match and balance out. Every transaction has two aspects debit and credit; two equal amounts. Every business […]

  What is the Principle of Income Recognition? What is the Dual Aspect Principle? What is the Principle of Expenses? What is the Modifying Principle? What is the Matching Principle? What is the Materiality Principle? What is the Historical Cost Principle? What is the Full Disclosure Principle? What is the Principle of Consistency? What is the […]

Bad Debts In a business scenario, amounts which are overdue to a business owner by the debtor(s) and declared irrecoverable are called bad debts. Few reasons for debtors to not pay their debts on time may be; filing for bankruptcy, experiencing hardship due to losses, etc.  This can either be the complete amount owed or a […]

  What is Business Separate Entity Concept? What is the Going Concern Concept? What is Money Measurement Concept? What is Periodicity Concept? What is the Accrual Concept? Accounting Concepts and Assumptions Accounting concepts are basic assumptions on the basis of which financial statements of a business are prepared. Accounting assumptions are broad concepts that develop […]

Accounting Process The word “Accounting” brings along with itself thousands of years of history and can be traced back to ancient times. There are proofs which suggest that accounting might be more than 7000 years old. Now, let’s just quickly get back to modern times and try to understand what really accounting and the accounting […]