Accounting

Acc has a number of divisions, the main two being financial acc and management acc.Help us to understand the logical basis of acc and see how the financial affairs can be summarised and analysed. What is accounting?Acc defined as the recording, summarising and interpretation of financial information. The key aspects of acc are: IDENTIFYING the key financial components of an organisation, such as, capital, revenue, expenses and cash flow. MEASURING the monetary value of the key financial components in a way which represents true and fair view of the organisation. COMMUNICATING the financial information in way that are useful to the users of that information.Financial acc: day-to-day recording of an organisation's financial transactions and the summarising of those transactions to safisfy the information and needs of the user group. Management acc:  is concerned with the provisions and use of accounting information to managers within organisations, to provide them with the basis to make informed business decisions.CLOSING OFF: Balancing accounts at the end of a financial period. DEPRECIATION: the loss in value of a non-current asset over timePREPAYMENT: Expense paid in one financial period where the benefits are not receivedUNPRESENTED CHEQUES: a cheque sent to a creditor by the business but not yet banked by that creditor. HISTORICAL CONCEPT: values of assets are based on their original acquisition cost, unadjusted for subsequent changes in price or value.ACCRUALS CONCEPT: revenue and cost are recognised as they are earned and incurred and they are matched with one another and dealt with in the profit and loss account of the period to which are relate, irrespective of when cash is received of paid.PRUDENCE CONCEPT: revenue and profit are not anticipated but are included in the profit and loss account only if there is reasonable certainty that they will be received. All expenses and loss must be made, whether the amount is known with certainty or is only a best...