Accounting Basics

KEY TERMS used in Accounting

|Sl No |Terminology |Meaning |

|1 |Accounting |The process of identifying measuring and communicating economic information to permit|

| | |informed judgements and decisions by the users of information. |

|2 |Financial accounting |The art of recording, classifying and summarising in a significant manner and in |

| | |terms of money transactions and events which are at least in part of a financial |

| | |character and interpreting the results. |

|3 |Management accounting |The presenting of accounting information in such a way as to assist management in the|

| | |creation of the policy and In the day to day operation of the undertaking. |

|4 |Accounting principles |Rules of action or conduct adopted by the accountants universally while recording |

| | |accounting transactions. |

|5 |Accounting concepts |Basic assumptions or conditions upon which the science of accounting is based. |

|6 |Accounting conventions |Customs and traditions which guide the accountants while preparing the accounting |

| | |statements. |

|7 |Cash system of accounting |A system in which accounting entries are made only when cash is received or paid. |

|8 |Mercantile system of accounting |A system in which...