Cost Accounting & Financial Accounting
Cost Accounting & Financial Accounting Presented By Manesh Kumar Ahuja
Financial Accounting Financial Accounting is de ned as, Art and science of classifying, analyzing and recording business transactions in a systematic manner in order to prepare a summary at the end of the year to nd out the results of the concerned accounting yearDefinition how define The definition given above is self explanatory, however for understanding clearly, the following terms are explained below. A Business transactions :- A transaction means an activity, a business transaction means any activity which creates some kind of legal relationship. For example, purchase and sale of goods, appointing an employee and paying his salary, payment of various expenses, purchase of assets etc.
B Classication of transactions :- Before recording any transaction, it is essential that it is to be classied. A transaction can be classied as cash transaction and credit transaction. Similarly transactions of receiving income and payment of expenditure can be segregated. Even in case of expenditure, transactions involving revenue expenditure and capital expenditure can be segregated. C Recording of transactions :- The essence of nancial accounting is recording of transaction. In accounting language, recording of the transaction is known as entry. There are well de ned rules for recording various transactions in books of accounts. As per the rules of nancial accounting, each and every transaction is recorded at two places and hence it is called as Double Entry system of accounting.Thank you